It’s been a busy year for AcreTrader Inc., the farmland investing company in Fayetteville. It has tripled the amount of money placed into farms since September and recently added timberland to its portfolio.
“It just makes lots of sense” to offer timberland, founder and CEO Carter Malloy told Arkansas Business last week. “We’re farming for trees rather than crops.”
Launched in 2019, AcreTrader now has placed more than $300 million in more than 100 farms in 16 states and Australia. In September 2021, it had more than $100 million invested in farms.
“So it’s grown very quickly,” said Malloy, who had the novel idea to allow investors to buy a fraction of a farm instead of the entire property.
Timberland, he said, “can generate pretty consistent performance over long periods, even during inflationary times or volatile markets,” he said. AcreTrader has three timber farms in Alabama and one in Arkansas.
Malloy said the timber property will remain a minority segment of AcreTrader’s business and will be overseen by Mark Foley, the director of timber acquisitions, who joined the company earlier this year. Foley has more than two decades of experience in timber investing, with past roles including chief investment officer for Domain Timber Advisors LLC of Atlanta and forestry portfolio analyst at Jeremy Grantham’s GMO of Boston, a global investment management firm, a news release said.
AcreTrader’s subsidiary, AcrePro, announced earlier this month that it has enlarged its real estate brokerage operations to Indiana and Michigan, expanding its footprint to 17 states.
Malloy said the subsidiary is growing “very quickly” and now has about 30 employees. “It seems as though we’re adding agents just about every week at this point,” he said. “We’re really excited about it, and the ability to help folks buy and sell land.”
Across the country, $50 billion to $100 billion worth of farmland is bought and sold each year. AcrePro works mostly with farmers who want to buy land.
AcreTrader also has a product launch in the works that will feature mapping and geospatial analytics software.
AcreTrader’s expansion was fueled by a $60 million Series B funding round this year that included an investment from the venture capital firm Drive Capital of Columbus, Ohio.
“It’s been impressive to witness what their team has been able to accomplish thus far and we believe technical prowess combined with a deep network of farmers positions AcreTrader to be the leader in this rapidly-growing marketplace,” TJ Dembinski, partner at Drive Capital, said in a March news release.
Malloy said the company’s growth stems from its product. Malloy came up with the idea for AcreTrader while working for investment firms, his career for more than a decade. Malloy, who was born in Stuttgart and raised in Little Rock, was investing personally in agriculture. “I had some good experiences and had some friends who wanted to invest in farmland,” he told Arkansas Business last year. “But there was no real way to go about it.”
If an investor wanted to buy farmland, she would have to put up a lot of money and then handle farm management. “For most people, buying a million-dollar farm and managing it is a nonstarter.” But, he thought, if investment money could be pooled, then an investor could buy only a fraction of a farm instead of the entire property.
And so Malloy started AcreTrader, which now has a staff of 130 employees, about half of whom are software engineers.
Malloy added that the company has the right employees, which is another reason for the company’s growth. “They’re bright. They lean in and push forward,” he said.
Finding the employees, however, “is a big challenge for us,” he said. AcreTrader has two full-time recruiters on staff, who interview “an absolutely crazy number of people every week trying to find those few that really fit well.”
Malloy said more “large initiatives” are expected to be announced at the end of the year or early next year.
“We’re really excited to … help farmers grow, help investors grow their portfolios,” Malloy said. “That’s really the goal of our business.”