GrainChain, a suite of software to bring easy and secure payments to farmers, buyers and grain elevators through blockchain, announced Medici Ventures, the leading blockchain accelerator and subsidiary of Overstock.com, Inc. (OSTK), has purchased a $2.5 million equity in the company.
Medici Ventures has 10 percent ownership in the company, with an option to further its acquisition for an additional 10 percent at a later date.
Established in 2013 by the founders of SiloSys, GrainChain's software products eliminate manual processes of weighing and documenting agricultural yield. The blockchain-based financial settlement system allows grain producers, buyers and sellers to create smart contracts to secure funds throughout the grain transaction process. By using Internet of Things (IoT) devices that accurately measure grain weight and quality, GrainChain eliminates the potential of errors from human error or bad actors. The system furthermore creates documentation to track harvests from farm to table, eliminating the potential of fraud.
"We are making the grain transaction extremely efficient, transparent, safe and secure, and we're giving not only the farmers but also the buyers a safe marketplace to do business in," said GrainChain co-founder and CEO Luis Macias. "At the end of the day, we're just leveling the playing field for the farmer, giving them much more power and control over the selling process."
The bulk of agriculture produced worldwide still comes from small- and medium-sized farming operations, which largely lack the budget to implement high-level technology to help modernize and secure their business transactions. GrainChain provides an affordable means of implementing those tools and safeguards. In addition to giving the farmers and buyers the ability to cut out brokers or middlemen to secure their transaction, GrainChain also allows them the confidence to do business with entities outside their geographic area, thereby expanding their business prospects.
"Agriculture is the backbone of our global civilization, but producers operate on razor-thin margins and are up against a host of factors far beyond their control," said Jonathan Johnson, president of Medici Ventures. "GrainChain helps to support those producers by simplifying and securing the measuring and payment process and bringing unprecedented transparency to the industry."
GrainChain is currently available in the U.S. and Mexico. Medici Ventures' acquisition, which accounts for 10 percent of the company, will allow GrainChain to expand its market share in Central and South America.