Doing a hardware startup in agriculture is difficult AF.
Earlier this year, Taylor Farms acquired Farmwise after having raised a significant amount of capital (close to $ 65 million).
Two weeks ago, US drone startup Guardian Agriculture shut down after failing to secure the necessary funding. Guardian Agriculture was a manufacturer of autonomous electric drones used for applying crop protection products.
Guardian raised over $ 51.7 million. According to the Guardian, the $50 million was too little capital. They said if they had $ 200 million as a ballpark figure, they could have afforded some of the mistakes. It would have allowed them to invest a lot earlier in areas such as hardware and reliability improvements. (according to Guardian Ag.)
While fundraising was challenging, presenting it as the standalone reason for the shutdown is likely an oversimplification. It's more probable that the difficulty in securing funding was a symptom of deeper, more fundamental issues with the company's business model that investors identified during their due diligence.
Guardian also spent a significant amount of time and money lobbying the federal government to ban Chinese-made drones from companies like DJI and XAG, by calling them “Trojan Horses,” raising national security concerns.
If you dig into some of the details, it presents a cautionary tale of why ag robotics is difficult AF. You don’t need to make it more difficult, as it reduces your chances of success. Innovative technology and some market demand are not always enough to overcome the formidable economic and operational challenges faced by your customers.
Be out over your ski-tips
About 2 years ago (June 2023), fresh off a fundraise, Guardian said it already had $ 100 million in customer orders. They planned to begin commercial operations in support of Wilbur-Ellis in California in the summer of 2023.
In the bankruptcy announcement, they said by June 2025, they had only built eight units of the drone, which does not jibe with the $100 million in customer orders from 2 years ago. The price tag on the drones was in the $120K to $300K range. If we assume an average price of $200K per drone, they were considering customer orders for 500 drones, but they built only 8!
Even as late as June 2025, Guardian said it had a backlog of hundreds of millions of dollars' worth of drones. If you have hundreds of millions of dollars of backlog, it should not be difficult to raise more money. The claim that if they had raised $200 million, they could have continued seems less credible.
It is often enticing to be above your ski tips and view your pipeline as actual firm purchase orders. The $100 million figure was a pipeline number from their sales and BD efforts (my guess). It is essential to separate firm purchase orders with deposits from the letter of intent (LOI) or memorandum of understanding (MOU).
It sends a wrong signal to the market, your current and future team, and changes expectations. If you cannot convert your pipeline to firm orders, you will be in much bigger trouble in the future, as happened with Guardian.