Agric insights startup Gro Intelligence replaces Founder with new CEO as it struggles to pay employees

The New York and Nairobi-based startup specialised in agricultural data, Gro Intelligence has replaced its Founder, Sara Menker with a new CEO, James Cariello This is according to a report from AGfundernews over the weekend. Also, the startup has told its employees it is unable to meet its remuneration requirements, per the report.

Founded in 2012 by former agricultural commodities trader, Sara Menker, Gro Intelligence is an AI-powered insights company which provides decision-making tools and analytics to a range of clients from food and agro companies to governments, insurers, investment banks, consulting firms and universities.

In January 2021, the startup bagged $85 million in a series B round from backers which included Intel Capital and Africa Internet Ventures. In April of the same year, Gro Intelligence was named as one of TIME’s 100 most influential companies. According to the company, it is dedicated to illuminating the world of agriculture through data-driven insights, fostering a deeper understanding of the global food system.

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However, Gro Intelligence reportedly laid off 10 per cent of its staff at the end of January. Reports indicate that the company had been attempting to raise additional capital through a convertible bond (a bond that can be converted into shares at a later date) as a bridge until it gets more consistent and stable revenues.

But now, its founder and CEO, Sara Menker, who controlled two board seats, is no longer CEO but will have “ongoing responsibilities” at the firm she founded in 2012. CTO James Cariello has now been named as the new CEO.

More on the development 

The Agfundernews report said Menker had her company’s Slack account deactivated a few days ago. According to the company’s long-time employee who spoke to the publication: 

“At an all teams meeting James stated unequivocally that they were unable to pay us. We were told that Sara was no longer CEO but as Founder would have ongoing responsibilities. These were not enumerated but I gathered from subsequent conversations that these related to business development and fundraising. We were told that [COO] Sewit [Ahdorem] was no longer with the firm in any capacity.”

The employee added that the call lasted about 10 minutes, with a promise for more complete transparency.

According to the source who spoke to AGfunder, one of the issues with Gro Intelligence is a fundamental mismatch between the product and the market. Gro Intelligence, which generates the bulk of its revenues from its key customer, Unilever, had picked up some business with other packaged food companies and a number of quantitative and fundamental commodities investors.

“It had positioned itself as a food security platform to a small Asian country and a country in the Middle East exporting oil, without success. It had also attempted to engage the US government under a variety of guises but was only picking up bits and pieces of business here and there.”

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Although Gro Intelligence had lost a crop input company as a client, the source said its current problems were not the result of a sudden loss of clients. The source blamed a combination of the challenging funding environment and the earlier-mentioned fundamental mismatch between the product and the market.

“They were chasing deals for projects that resembled bespoke consultancy work as opposed to something that would generate replicable revenue streams. They also had a number of mis-hires and until very recently, they didn’t have a CFO, so I don’t know that they were able to produce reasonable financials on a quarterly basis for investors.”

Cause of Gro Intelligence issues

Sources who spoke to AGfunder said Gro Intelligence tries to be everything to everyone and needs to find its niche. Per the source:

“Gro has a great product and a good group of intelligent people behind it, but I’m not sure they know how to sell it… I think it’s a solid business and something that the market needs, but it also needs the right people to operate it. Like most startups, it tries to be everything to everyone and needs to find its niche.”

Adding that:

“They started off as a data aggregator of agricultural data and have now incorporated a ton of climate data.  The problem is that they are not sure who or what to sell, they have the answer but they do not know which question to ask.”

Gro Intelligence hasn’t responded to these issues.