Hico Capital, a U.S. subsidiary of South Korean trading company SK Networks, invested $4 million in Sabanto Ag, a Chicago-based company that offers farming as a service.
Crunchbase reports Sabanto raised $17 million total in Series A funding as of July 1. Hico Capital and Sabanto held a virtual signing ceremony using virtual reality platform Meta to facilitate the $4 million investment. SK Networks says the investments will fund commercialization and continued development of Sabanto's technology.
Sabanto uses a fleet of Kubota M5 tractors, which are in the 80-110 horsepower range, to autonomously plant crops. Company founder Craig Rupp says Sabanto's machinery costs are down to 7 cents per horsepower hour, compared to 25 cents per horsepower hour for machinery costs in a traditional planting operation. Farming as a service is an up-and-coming trend in agriculture, and Ohio State University's Scott Shearer identified Sabanto as a company to watch during his outlook on autonomy presentation at the 2022 Precision Farming Dealer Summit.
Hico Capital says it decided to invest in Sabanto because of the considerable growth potential of the agtech industry and Sabanto's differentiated technologies. Sabanto's autonomy technology is compatible with conventional tractors already in operation. Hico Capital says Sabanto is on track for a commercial launch of its product to farmers in the third quarter of 2022, and the company has been pilot testing with the U.S. Air Force since last year, with the final phase of testing to be completed in the third quarter of 2022.
Hico Capital also projects 20% growth of the global autonomous tractor market per year with Sabanto "expected to benefit from the industry tailwind, driven by the increasing demand for automation."
"Sabanto's automation tech offerings will not only boost the operational efficiency of tractors but also contribute to the sustainability in agriculture," says Samuel Kim, managing director at Hico Capital. "This investment will allow us to support startups with innovative technology and potentially forge partnership with SK Networks' businesses in the future."