Halifax’s Milk Moovement, which makes supply chain management software for the dairy industry, has raised a US$20 million or C$26 million round of Series A funding as it looks to expand its product development team.
The round, led by San Francisco-based specialist venture capital firm VMG Catalyst, is one of the largest funding raises so far this year in Atlantic Canada, topped only by deals from Mara Renewables and Meta Materials Inc., both Dartmouth companies.
Chief executive Robert Forsythe said in an interview that Milk Moovement’s latest investors are all American, reflecting his company’s focus on expansion in the world’s top dairy-producing country by revenue.
The bulk of the US$20 million will go towards hiring engineering and sales staff, growing what is currently a roughly 55-person team to up to 75 in the coming months.
“We've realized that our customers and our clients really expect us to be experts in what we're doing,” he said. “For them, it’s not just building software and leaving them on their own. We're really partners in their daily operations.
“We're kind of restructuring how we build out our engineering and hiring experts in different areas. So you'll have an expert in transportation … and an expert in payments, and then they'll lead that side.”
The company’s backers are largely interested in the food and agrech space. VMG Catalyst is a new division of VMG Partners created to focus specifically on companies involved in the supply chain for consumer food and drink products. Richard Cargill, a seed investor, is a member of the Cargill agribusiness dynasty. And concurrent to the Series A round, New York Stock Exchange-traded disinfectant specialist Ecolab bought a minority stake, although a press release from Milk Moovement did not specify the size of that deal.
The raise follows up a strong 2021 for Milk Moovement, in which it secured a $1.5 million grant from federal agency Sustainable Development Technology Canada and raised US$3.2 million of equity funding.
The company’s employees are spread across Canada, particularly Nova Scotia and Newfoundland and Labrador, and the United States, including at a sales office in Minnesota that Forsythe’s team opened for better access to their largest market.
Their main customers are dairy co-operatives, sometimes called dairy boards in Canada, but Forsythe said the company is also expanding into the dairy processing space, which will include companies that sell their products at retail.
He added that the distributed staffing offers the company better options for recruitment, with different regions offering employees with differing expertise. Atlantic Canada, for example, has proven a good source of software developers and salespeople.
Milk Moovement’s technology is now used by more than 2,500 dairy farms, accounting for about 15 percent of the United States market. Forsythe added that his team has limited direct competition because more of the other software players in the space use older, less sophisticated systems.
“In North America, we're just competing against legacy systems,” said Forsythe. “It's software providers that started 20 or 30 years ago and just don't have the modern technology that the industry is looking for.
“We really see ourselves as the only one globally that can actually provide a cloud-based, web-based, frictionless platform to the industry."