Monarch Tractor found itself in a tricky spot late last year, as the autonomous electric tractor startup juggled growth and an uncertain fundraising environment. Now, with $133 million in new funding, CEO Praveen Penmetsa tells TechCrunch that the startup is moving on to greener pastures.
The $133 million Series C funding round was co-led by agri-food impact tech firm Astanor and HH-CTBC Partnership LP, a fund affiliated with Foxconn. The new round values the startup at over $500 million. Monarch raised $220 million to date.
Monarch Monarch has integrated the technology into electric tractors that offer customers a variety of automated driving features. The company currently has about 400 tractors in the field being used by its customers, according to Penmetsa, who said the new round of funding will help Monarch begin “producing more tractors, supporting our customers through our sales and service operations, and then continuing to expand into more states.”
That expansion comes with some changes. The company recently laid off employees, TechCrunch has learned. Penmetsa said the job cuts represent “less than” 15% of Monarch’s 250 to 300 employees and are part of a necessary shakeup as the young company looks to sustain its growth, particularly on the aftermarket and service side.
Penmetsa said part of Monarch’s business wasn’t quite keeping up with the number of tractors it was putting out into the world. Monarch’s production grew in 2023 alongside its geographic footprint, as the startup moved away from its initial market of vineyards and fruit farms in California and began working with dairy farms, airports and other customers across the country.
“Initially, we didn’t have enough coverage in these areas,” he admitted.
These difficulties, combined with delays in the fundraising process – partly due to a much lower overall investment cadence in agtech in general, according to PitchBook data — made the second half of 2023 “a pretty tough time for Monarch,” Penmetsa said.
But Penmetsa believes the situation has improved. Earlier this year, Monarch rebuilt its service and support teams.
“Our customers tell us that your service and support is better than it was six months ago,” Penmetsa said. That increased support has led to 15 percent of Monarch’s customers returning to the startup to purchase more tractors, a number that Penmetsa said exceeded the company’s initial expectations.
“Don’t get me wrong, it’s a number that I would have liked to see higher, as any CEO would, and I think as we continue to raise this capital, it’s really going to help us invest in sales,” he said. “This capital raise is going to allow us to really give our dealers confidence, show them that we’re in it for the long haul and that, you know, we’re here to stand behind our products, and they should also get on board to get these tractors to farmers.”
