Why We Invested in AcreTrader
We are excited to have led AcreTrader’s $12mm Series A financing and to be partnering with the company’s Founder / CEO Carter Malloy and his impressive team. AcreTrader is a platform that broadens access to farmland investments, and we strongly believe that farmland investing by individual investors will dramatically accelerate in the coming years as investors seek diversification in alternative assets.
At Jump Capital, we’ve invested in several leading investment platforms for traditional assets, including Personal Capital, M1 Finance, and Tradingview. In today’s market environment of healthy equity valuations, historically low interest rates, and growing inflation fears, we also recognize that investors are increasingly seeking alternative assets with unique characteristics suited for these unique times. Crypto is one of these assets, and we have invested in many of the leading crypto companies around the world. We believe farmland is primed to become the next asset class widely adopted by investors.
Farmland – The Next Big Alternative Asset
Farmland is a distinctively attractive investment for several reasons including its low volatility, consistently strong returns (11% per year since 1990), and significant cash yields from farm rental income. Farmland is also considered a classic inflation hedge, which is compelling in a time of seemingly unlimited money printing by governments across the globe. Additionally, farmland is a large, fragmented market that will be experiencing an ownership transformation in the coming years. Of the over $3 trillion of farmland value in the US, 70% is expected to change hands in the next 20 years. Historically, accessing this compelling asset class via direct investments and private funds has been reserved to only institutions with industry expertise and the wealthiest of individuals, including Bill Gates who was recently highlighted as America’s largest private farmland owner. Other indirect methods for farmland investing have typically suffered from either poor management and an inability to self-direct investments (farmland REITs) or have been poor proxies for actual farmland performance (general agriculture funds).
AcreTrader – A Unique Solution and Uniquely Qualified Team
To invest in this incredible market opportunity, we needed to find a uniquely qualified team—enter AcreTrader, which is democratizing and simplifying farmland investing. AcreTrader provides transparent farmland investment options for investors and speed of execution for land sellers. AcreTrader has built unique relationships with farmers for access to prospective farm transactions and performs rigorous due diligence to select the most attractive investment opportunities. Each selected farm is then placed into an LLC to enable direct investments. Ownership is fractionalized which enables investors on its platform to buy shares that equate to as little as 1/10 of an acre, making it accessible to a broader investor audience. Investors can seek out investments in a wide range of geographies and crops enabling them to build a personalized farmland portfolio. AcreTrader has taken a highly capital intensive, complex, and nuanced process and greatly simplified it for both the land seller and even more so for investors.
While fractionalizing assets is not a new concept, doing so for an opaque asset class such as farmland is. The AcreTrader team has deep roots in the farmland industry and exemplifies the founder/market fit we seek to invest in at Jump. It’s common to find industry-driven start-ups with founder/market fit in the middle of the country and finding a uniquely capable team addressing this market opportunity brought us specifically to Arkansas. Carter Malloy, Garrott McClintock, Elise Alexander, and the rest of the AcreTrader team have been working in this space for years, have experience buying / selling farmland, and have deep relationships with the farming communities they partner with. This level of expertise can only be gained through years of first-hand experience, and we believe provides a natural moat that uniquely positions the company to solve this complex problem.
We are honored to be partnering with Carter and the AcreTrader team and look forward to helping them accelerate their growth and further extend their leadership in this space. We are confident that farmland is an incredibly attractive investment asset and believe the AcreTrader team is the right one to open-up access to this asset class.