Monarch Tractor found itself in a tricky position late last year as the self-driving electric tractor startup struggled to balance growth with an uncertain fundraising environment. Now with $133 million in new funding, CEO Praveen Penmetsa tells TechCrunch the startup is moving on to greener pastures.
The $133 million Series C funding round was co-led by agri-food technology impact company Astanor and Foxconn’s affiliate fund HH-CTBC Partnership LP. The new round values the startup at over $500 million. Monarch has raised $220 million to date.
Monarch has integrated technology into its electric tractors that provide customers with a range of autonomous driving features. According to Penmetsa, the company currently has about 400 tractors in the field used by customers, and the new funding round will help Monarch “produce more tractors, support customers in terms of sales and service, and expand into more states.”
The expansion comes with some changes. As TechCrunch has learned, the company recently laid off some workers. Penmetsa said the cuts amount to “less than 15 percent” of Monarch’s 250-300-person workforce and are part of a necessary reorganization to support the young company’s growth, particularly in after-sales and service.
Penmesa said some of Monarch’s business has not kept up with the number of tractors it has put out globally. Monarch’s production has grown along with its geographic footprint in 2023, as the startup has moved beyond its initial market of vineyards and fruit farms in California to work with dairies, airports and other customers across the country.
“In the beginning, there wasn’t enough coverage in that area,” he admitted.
Those difficulties, coupled with delays in the fundraising process, partly due to a much weaker investment cycle for agtech overall, according to PitchBook data, make the second half of 2023 “quite a challenging time for Monarch,” Penmetsa said.
But Penmetsa believes that has changed. Earlier this year, Monarch rebuilt its service and support team.
“Our customers say that the service and support over the past six months has been better than the previous six months,” Penmetsa said. With the increased support, 15 percent of Monarch’s customers have returned to the startup to buy more tractors, a number that Penmetsa said exceeded the company’s initial expectations.
“Make no mistake, like any CEO, this is a number we would like to see higher, and I think continuing to do this fundraising will help us invest in sales,” he said. “This fundraising will give our dealers confidence that we are here for the long haul, that we are here to support the product, and that we are here to support the movement to get tractors to farmers.”
