With $5 Million Funding Round, Tractor Zoom Sees Used Equip Sales in Minutes
Tractor Zoom, a Waukee, Iowa-based data company that helps equipment dealers and farmers find and value farm equipment and get pre-approved for financing, announced Oct. 3 the completion of a $5 million dollar funding round. The round was co-led by Builders VC of San Francisco, Calif. and Bienville Capital of New York, N.Y.
"[The funds are] going to allow us to make significant investments in data science," Kyle McMahon, founder and CEO of Tractor Zoom told DTN/Progressive Farmer. "Ultimately, what this means is it's going to allow us to leverage our best-in-class database, create better products that solve more needs for our customers ... (and) help us create a more streamlined process for all stakeholders in the farm equipment buying, selling and managing process."
Tractor Zoom has been a steep run-up in business performance since receiving $3 million in funding in 2020. Since then, it has added more than 1,450 equipment suppliers to its marketing platform and grown its user base by 400%.
In 2020, the equipment listed on Tractor Zoom had an auction value of $1 billion. "This year we will market over $14 billion of farm machinery from auctions and dealerships," McMahon said. "We're marketing over half of the inventory in North America through Tractor Zoom."
Established in 2017, the company connects farmers looking to purchase farm equipment with auctioneers and dealers with available inventory.
While McMahon declined to give much detail about how Tractor Zoom intends to leverage its data science assets from this investment round, he said one goal is to offer farmers the opportunity to find and value a piece of equipment on the same web page, inside the same shopping experience.
"Effectively, we have the most transparent equipment valuation software in the industry. And we're taking that to the next level by employing data science, which will make equipment dealers decision times faster when it comes to buying farm machinery," McMahon said. "We will help farmers make better decisions as they're shopping on Tractor Zoom because of the amount of information we will give them. Ultimately, we'll be able to help a farmer find the equipment that they need, value it and then obtain financing often two minutes."
Tractor Zoom also may be turning some attention to another used equipment market -- used construction equipment. "Now, (with) this round of capital we're going to stay in agriculture. But long term, we will have opportunities to look at adjacent markets, like construction," McMahon said.
How soon? McMahon declined to provide a timeline. When asked if Tractor Zoom would be looking to make that move within a year. He said no.
As the investment comes to Tractor Zoom, the used equipment market has reached an interesting point -- a kind of limbo, McMahon said.
"Ultimately, we're a pretty stagnant market," he added. "It will be very interesting to watch how the combine market plays out in (quarter 4, 2022 and quarter 1, 2023). If 'Mother Deere' pushes more new units to market, there could be a combine glut. So, we might be at the peak in the market ... where the biggest factors that are driving [the market] going forward are continued interest rate hikes and supply. I guess in my opinion, there's more opportunity for equipment prices to stay flat or perhaps drop a little bit than continue to rise at this at this moment in time."
Additional participation in this Series A funding round came from Next Level Ventures and Wintrust Ventures, as well as follow-on from existing investors Innova Memphis, HPA, ISA Ventures, Ag Ventures Alliance and strategic angel investors.
For more information: www.tractorzoom.com
Dan Miller can be reached at firstname.lastname@example.org
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