CALGARY — Embattled agtech company Farmers Edge is cutting some of the in-person services it offers through its data-driven farming platform, The Logic has learned, part of a shift to remote services that some observers view as an attempt to cut costs. 

Farmers Edge offers farmers satellite imagery, data about their soil and crops and other such services to help them optimize yields and reduce costs. While farmers pay for access to the company’s software on an annual, per-acre basis, the company has also historically offered in-person services, where technicians visit clients’ farms to conduct soil tests, maintain equipment like weather stations, and ensure that crops are generally performing well. 

In a July letter to some Farmers Edge clients, a copy of which The Logic obtained, the company said that after conducting “a strategic review of our operations,” it would now only offer those services virtually, with the exception of soil sampling.

The Winnipeg-based company is also laying off workers as part of the remote shift, according to two sources familiar with the issue whom The Logic agreed not to name because they were not authorized to speak publicly on the matter. 

Meanwhile, according to a separate email obtained by The Logic, Farmers Edge is ending its operations in Australia. The country was part of the company’s overseas expansion efforts. As well as the U.S. and Australia, it opened local offices in Ukraine and Brazil. Its Australian operations accounted for almost $1.3 million in revenue in the first quarter of 2023, according to public filings, compared with $2.0 million from Canada and $2.9 million from the U.S. The company employed nine of its total 417 total workers in Australia at the end of 2022, compared to 78 for Brazil and one for Ukraine, according to public documents.

Farmers Edge did not confirm the layoffs, and did not respond to questions about its operations or business outlook. 

Upstream Ag, a Substack newsletter created by former Farmers Edge employee Shane Thomas, first reported on the layoffs and the closure of the company’s Australian operations in late July. 

The changes come as Farmers Edge—once one of Canada’s pre-eminent agtech companies, attracting about $78 million in backing from major venture capital funds like Silicon Valley’s Kleiner Perkins, and a stock-market darling after its March 2021 initial public offering—grapples with negative cash flows and a dwindling number of users on its subscription-based data service. The company’s stock value has plummeted as it struggles to convert unpaying subscribers to paying, falling from more than $19 per share after its IPO to around 20 cents today. 

In an effort to restore investor confidence, the company split last year with its co-founder and longtime CEO Wade Barnes, replacing him with former Amazon Canada exec Vibhore Arora. The company has also gone through three CFOs in less than two years. The efforts haven’t yet yielded concrete results. Farmers Edge cut its net losses to $18.7 million in the first quarter of 2023, down from $22.2 million a year earlier, but continues to burn through cash. It will report second-quarter earnings on Aug. 10.  

In March 2022, Fairfax Financial Holdings, its largest investor, extended a $75-million revolving loan to the company to help keep its balance sheet afloat.

In an interview with The Logic, Barnes—who in July launched Ronin Agronomy, an agtech company focused on carbon offsets—said he had sought to move Farmers Edge toward more of a virtual model to cut expenses when he was CEO.

“It is a strategy that I wanted to get to over time,” Barnes said. “I think around the cost structure, they must be trying to get there faster.”

While Barnes remains a Farmers Edge shareholder, he stressed that he is not directly familiar with the current management team’s turnaround efforts. But to make the remote-service transition successful, he said, the company will have to ensure its virtual offerings are as effective for farmers as in-person visits. 

“Their question will be can they do that or not,” he said. 

Some former Farmers Edge clients say the company’s services fell short of what it promised even when they were offered in person. 

Barclay Uruski, who operates a 2,500-acre farm near Winnipeg, said Farmers Edge was supposed to do in-person check-ins once a year as part of their agreement when he was a client between 2016 and 2021. 

“After the second year, we just didn’t see them,” he said. 

The software itself also didn’t always work as promised, Uruski said. He was subscribed to a satellite imagery program that would send an alert if, for example, one of his crops became infested with grasshoppers. Initially, Uruski said, the program would ping his phone and pinpoint exactly where the problems were, but the service stopped working properly after the first few years. Another program that allowed farmers to input total costs and tabulate investment returns never worked, according to Uruski. 

After about the third year with Farmers Edge, Uruski said that in-person customer service declined even further, and after about five years, he switched to a competitor.