Announcing our investment in Lincoln, NE-based Corral Technologies.
Background
A large part of our domestic and global food supply chain remain inefficient and costly, particularly the massive beef production industry. This inefficiency extends to ranchers with cow-calf operations that make up the backbone of the beef industry and the start of this supply chain. Cow-calf ranchers (i.e. ‘cowboys’) raise beef cattle heifers/cows to produce calves typically birthed in the spring, graze the cow-calf pairs in acres of grass pastures for 6–8 months, and then wean the calves when they grow to be around ~550 pound cattle. They sell these cattle in the fall to stocker operations and feedlots at a variable beef rate (often in the range of $1.75/lb). As one can imagine, plenty of hard, physical labor is involved in keeping up a ranch and rancher profitability has compressed over the years. A weaned calf typically sells for around $1,000, netting between $150-$400 from each weaned calf sold.
One of cattle ranchers’ biggest pain points is that in order to grow big, healthy calves while maintaining the efficacy of their pasture and soil, they need to rotationally graze the herd. This best practice involves herding cows and calves every 4–10 days (or even more frequently) to different pastures or portions of a pasture. This enables the cows and calves to eat a variety of natural foliage as the vast majority of their diet to healthily gain weight while allowing the other pastures to “rest” to avoid overeating an area while limiting erosion by allowing the foliage to regrow and roots and soil to recover. This allows the soil to more effectively sequester carbon without over-polluting an area with animal waste.
This is a headache creating vast complexity for a variety of reasons. Cattle operations can range from a couple head of cattle to 1,000+, and in order to keep them in a safe area from predators or from approaching roads and train tracks, ranchers and their ranchhands (an increasingly difficult-to-hire role) need to put up and maintain a perimeter fence around their land — typically a “section” which is a 640 acre square (1 mile by 1 mile). Within those perimeter fences are cross fences of barbed wire or electrified fences breaking up the area into segmented pasture “cells” for herds to rotationally graze.
Breaking up a section into pastures with physical cross fences is costly. It ranges from $10K-$60K per mile of fence in labor and materials. For example, that’s up to $500K in fencing costs for a 250 head of cattle ranch on 3.2K acres in Nebraska with 9 miles of cross fences. It takes two people a week of each working 70 hours, and in addition it costs $1K+/mile in maintenance and two weeks per year in upkeep. Furthermore, when it’s time to rotate the cattle to a new pasture after 4–10 days, ranchers need to physically go out into the field on their horse or ATV, find every cow, and herd them into the other pasture. This is a lot of work especially when considering that around 80% of cow-calf operations are supplemental income to ranchers. The beef industry is massive, representing 944M cattle worldwide of which 290M are from calf crop production. The U.S. is the 4th largest country by calf crop production with 34M per year.
The backbone of this industry are the ranchers leading cow-calf operations. They have continued to be underserved by technology that actually saves them time, hard work, and improves the quality of their land and cattle. One of their biggest pain points has been effectively rotationally grazing cow-calf pairs especially when it comes to setting up and maintaining cross fences, corralling their cattle and trying to improve their utilization rates and per acre yield.
The Opportunity
Jack Keating, the Founder/CEO of Corral deeply understands and has lived these pain points for 15 years as a ranchhand on his family’s 3rd generation cow-calf operations ranch in Nebraska. As a younger generation rancher, he imagined a better way to herd cattle using technology — and started experimenting with modified dog collars. Combing his deep industry knowledge with endless tinkering and experimentation, Jack created Corral with best-in-class virtual fencing, including features like cell/satellite connectivity, solar power and rugged durability.
We are excited to invest in Jack and Corral due to his strong founder/market fit, ability to sell to his target audience and the reception that Corral has received from them. Corral offers both cost reduction (ever more important in a tight labor market) while increasing revenue and profitability (increasing cows/acre, increasing acreage ranched and increasingly qualifying ranches for carbon incentives). While ranchers are notoriously known as a tough segment to sell tech enabled solutions, we were pleasantly surprised to see them flocking to Corral. This unheard of demand has been demonstrated with extensive purchases across most major ranching states and a surprisingly high willingness to pay — generating a large addressable software subscription market opportunity.
We believe that Corral will revolutionize cow-calf operations and drive massive improvements to the beef industry. Jack and his team have built something truly incredible and we are excited to be along for the (cattle) drive! 🐄🤠
About Corral: The virtual fencing system developed by Corral Technologies boosts the efficiency of cattle ranching operations. With the capability to increase the number of grazing cattle per acre by up to 40%, ranchers experience significant gains in productivity while reducing both material and labor costs. Ranchers harness the power of Corral Technologies’ virtual fencing to remotely move and contain their cattle by establishing virtual pastures anywhere on their operation.
Corral’s virtual fencing system serves as a comprehensive tool for ranchers, allowing them to monitor individual cattle health, manage activity data and record sustainability metrics for each cow. By integrating technology into ranching practices, Corral Technologies empowers cattle ranchers with a solution that not only enhances operational efficiency but also promotes a more sustainable and data-driven approach to livestock management.
Learn more: Corral raises $1.38M to expand virtual fence solution’s US hoofprint; M25, Grit Road beef up deal + more from Silicon Prairie News
About M25: M25 is an early-stage venture firm based in Chicago, investing solely in tech startups headquartered in the Midwest. Since launching in 2015, M25 has become the most active investor in the region, quickly becoming the preferred seed investor for the next generation of Midwest unicorns. Portfolio companies include Kin Insurance, Loop Returns, Astronomer, Summersalt, SteadyMD, Branch, Authenticx and more. For more information, please visit www.m25vc.com.
