When Brandon Welch and Phil Taylor started the Boulder nonprofit Mad Agriculture in 2018, they aimed to fix three major hurdles keeping farmers from transitioning their land to regenerative agriculture: a lack of access to information, markets and money.
This year, the nonprofit spun out a business, Mad Capital, that aims to tackle the last one. Mad Capital offers flexible, long-term financing options for farmers to focus on regeneration and organic farming. The company announced on Dec. 14 that it raised $4 million in venture capital to help further its goal of financing 10 million acres of farmland by 2032.
The seed round was led by Trailhead Capital, a Boulder-based investment firm that focuses on regenerative food and agriculture companies. Also participating were Bonaventure Capital, Homecoming Capital, Impact Assets, One Small Planet, Pelican Ag, Lacebark Investments and 17 others.
"Regenerative agriculture aspires to work with nature, rather than against it," Phil Taylor, a co-founder of Mad Capital, said in a statement. "Mad Capital is a bold reimagination of financing in nature's image, empowering farmers to create farm ecosystems that are good for the Earth and good for humanity."
Regenerative agriculture refers to the process of rebuilding the organic matter in soil that is stripped by conventional farming methods. Speaking on The Modern Acre podcast earlier this month, Welch, Mad Capital's CEO, said that regenerative agriculture had the potential to "grow healthy food at scale, sequester CO2, improve water quality, grow healthier, more nutrient-dense food and bring new life to rural communities."
Many farmers struggle to convert their land to regenerative, organic farming because traditional banks are unwilling to supply them with the financing to get through the transition period, when farmers are producing smaller yields, Mad Capital said. It takes a standard three-year period for farms to regenerate and produce a consistent crop yield.
Mad Capital offers farmers operating, equipment and infrastructure loans, as well as mortgages, flexible lines of credit and transitional loans. In some cases, farmers have the option to pay only the principal on a loan until their land is certified organic and is yielding crops, Welch said on the podcast.
"[We're] helping farmers transition more of their land at a faster pace by providing them with more flexible, longer-term loans than what they could find elsewhere," Welch said.
Under the umbrella of Mad Agriculture in 2020, Welch and Taylor launched their inaugural fund of $10 million. Through that fund, Mad invested in 24 farmers in 13 states and is financing 44,000 acres of farmland, nearly 7,000 of which is transitioning to regenerative agriculture.
"We are elated with the progress we've made, and most importantly, with the farmers we serve and the land being healed," Mad Capital wrote on its website. "This impact might sound like a lot, but' it's only a drop in the bucket for the sea of change that needs to happen in agriculture."
Mad Capital is "overwhelmed with work" and demand for its lending products, the company said. It's planning to close its second round soon and begin deploying it to farmers in January, Welch said on the podcast.
Mad Agriculture operates additional teams to address the other challenges facing farmers who are seeking to regenerate their farmland: the lack of access to information and markets. Mad Markets connects farmers to buyers, and other Mad employees help farmers plan for the regeneration process and educate the public about regenerative, organic farming.
