Late last year, autonomous electric tractor startup Monarch Tractor found itself in a rocky spot, struggling to balance growth with an uncertain funding environment. Now, with $133 million in new funding, CEO Praveen Penmetsa told TechCrunch the startup is in better shape.
The $133 million Series C funding round was co-led by agrifood technology impact company Astanor and HH-CTBC Partnership LP, an affiliated fund of Foxconn. The new round values the startup at more than $500 million. Monarch has previously raised $220 million.
Monarch has integrated technology into its electric tractors that gives customers a variety of autonomous driving features. Penmetsa said the company currently has about 400 tractors in use by customers, and the new funding round will enable Monarch to “produce more tractors, support our customers on the sales and service side as well, and continue to expand into more states.”
The expansion has come with some changes: The company recently laid off several employees, according to information obtained by TechCrunch. Penmetsa said the cuts represent “less than 15%” of Monarch's 250-300 employees and are part of a necessary round of personnel changes for a fledgling company, particularly to help grow its aftersales and service side.
Penmetsa said part of Monarch's business hasn't kept up with the number of tractors it's putting out there: Monarch's production grew in 2023, along with its geographic reach, as the company moved away from its original market of California vineyards and orchards and began doing business with dairies, airports and other customers across the country.
“Initially we didn't have adequate coverage in these areas,” he acknowledged.
Those struggles, combined with delays in the fundraising process due in part to a significant slowdown in the pace of investment in agricultural technology generally, according to Pitchbook data, made the second half of 2023 “a very challenging period for Monarch,” Penmetsa said.
But Penmetsa believes things are looking up: Earlier this year, Monarch restructured its service and support team.
“Our customers tell us that their service and support over the last six months has been better than ever. [prior] “In six months,” Penmetsa said. The increased support has seen 15 percent of Monarch's customers return to the startup to buy more tractors, a figure Penmetsa said is higher than the company's original expectations.
“Don't get me wrong, like any CEO, I'd love to see a higher number, but I think continuing to raise this capital will really help us invest in sales,” he said. “It gives our dealers confidence that we're in this for the long term, that we're here to stand by our product, and that they should be part of the movement to get these tractors out to farmers.”