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FarmTogether

Food & Agriculture
FarmTogether connects owners of farmland with private market investors, offering unique access to a low-volatility asset class.
Scorecard
B
Quality of Offerings
C
Fees
B
Quantity of Offerings
C
Brand
C
Liquidity & Cash Flow
B
Risk & Diversification
Accessibility
D
Alts for All Score
3 - Fair

FarmTogether is a farmland investment site, offering partial shares in farmland across America through its high-tech investment infrastructure. The site has been backed by Franklin Templeton’s incubator as well as SeedInvest.

While investors typically think of bonds or gold when it comes to “safe” investments that can be used to hedge against a market correction and/or diversify exposure, farmland is often a safer option given its favorable risk/return profile. The asset class has incredibly low volatility – people always need food – yet crowdfunding sites in the space consistently advertise annual returns in the 8-10% range. Below, a graphic from FarmTogether helps illustrate the value of farmland in a portfolio, limiting variance (standard deviation) and improving one’s risk/return profile (Sharpe ratio).

Source: FarmTogether

FarmTogether’s thesis is that the farmland market in the U.S. is worth more than $2T, yet the overwhelming majority of that value is inaccessible to investors who can’t buy a private company or farm of their own. The site uses the same model as competitor Harvest Returns, pooling investments in a legal entity (typically an LLC), in which an investor becomes a part-owner of the farmland purchased through the pooled entity. It also has separately managed accounts (SMAs) for those willing to invest more than $500,000.

The primary dynamic which may be challenging to some investors is FarmTogether’s minimum investment figures, which start at $10,000, but typically climb up to $25,000. This is significantly higher than the minimums for all other farmland investment sites. The site also lacks the international offerings and debt options provided by Harvest Returns, which uses the same partial ownership model, has a minimum of $5,000, and occasionally has options for nonaccredited investors. Finally, the site doesn’t note its ownership form. Both Acretrader and FarmFundr take full control over farms and handle operational management, which gives investors complete control of a farm without the worries of maintaining it.

Despite its shortcomings on accessibility, FarmTogether has a competitive deal pipeline and relies on tech-driven sourcing and diligence. Its interface is also clean and more navigable than other sites. As such, for those willing to spend hundreds of thousands of dollars on farmland, this site has great tech and enough offerings to enable diversification, with the SMA option providing an added bonus. For others, lower-cost options have the same value in maximizing one’s risk/return profile and may also let one access emerging markets.

Pros

  • The site has strong inbound deal sourcing, with large offering sizes and 2-3 offerings open at any given time.
  • The site has done well in making its processes tech-driven, applying tech to both sourcing and diligence.
  • FarmTogether’s SMA option for those willing to invest >$500k is unique and makes it additive for high-net-worth investors. The site does not publicly disclose whether this option is associated with lower fees.

Cons

  • FarmTogether’s high minimum investment and accreditation requirement limit access and, even then, offer returns similar to those of Acretrader and FarmFundr
  • Unlike other options, FarmTogether offers no access to international opportunities.
  • The site is lacking in terms of transparency, with limited information on fees and its property management model. Both are readily available for most other players in the farmland space.