This is the second in a Moguldom original series that shines the light on the founders featured on MogulWatch, our comprehensive list of startups that have received venture capitalist funding. At MogulWatch, you can find out how much money the moguls have received from whom, and news and data about their company.
Kellee James didn’t have a background in agriculture and she didn’t grow up in an agricultural family. She worked in financial services and became the founder and CEO of Mercaris, a market data and trading platform for organic, non-GMO and certified agricultural commodities.
Before taking on agtech full time, the former Obama White House and Aspen Institute Catto Environmental fellow worked for the Chicago Climate Exchange, the first electronic trading platform and registry for environmental derivatives.
Appointed in 2009 as a White House Fellow by President Barack Obama, James was recognized by Crain’s Chicago Business Magazine as a “40 under 40” rising leader.
Mercaris was founded to address the lack of basic market data available to participants in the organic and non-GMO supply chain. Its products and services allow subscribers to access an expanded pool of buyers and sellers, apply data to business planning and strategic decision-making, reduce transaction costs, and decrease financial risk.
Mercaris raised more than $3 million in funding over two rounds. The latest series was in September 2016. The firm is finishing up raising a new round of funding as it eyes new agriculture markets.
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“We’re in the process of going outside of the grain industry for the first time and are starting to cover the organic dairy market,” James told Moguldom.
With a bachelor’s degree in Spanish from the University of Kentucky and an MBA and MA in international development from American University, James worked with commodity banks in Latin America before founding Mercaris. Her background in commodities and futures has served her startup well.
“We try to make sure we’re not just talking amongst ourselves. We get out and talk to our customers, would-be customers and our critics. Constructive criticism can provide you with your next best idea.” — Kellee James, founder and CEO of Mercaris
James talked to Moguldom about creativity, team-building and the future.
Moguldom: Why did you start Mercaris?
Kellee James: I started Mercaris as one more iteration of a career spent working where finance and market mechanisms, cross paths with environmental, social performance goals and outcomes. The mission of Mercaris is that we provide market information and market data service and an online trading platform for agricultural commodities that are organic, or non-GMO, or have some other sustainable type certification attached to them. These markets carry high transaction costs. It is hard for a sector to grow if it is laboring under those types of expenses. Mercaris was a way to address that through a market-based mechanism. And that’s kind of what I’ve done with my career for the past 10-15 years preceding Mercaris. Mercaris was just the next logical step on that path.
Moguldom: What do you feel are some notable wins since you started the company?
Kellee James: Taking the company from concept to something that’s real, with real products, real customers, and real revenue. Overall that has been a professional and personal achievement. There are lots of good ideas out there, but how many of them turn into something tangible? We’re proud we’ve been able to do that. Of course, there’s a lot of territory to cover, but overall, for the past four years, we have been providing good quality market analysis data in trading. On the trading platform side, we went from concept to over 430,000 bushels of organic grain traded on our platform last year. I don’t know where we’ll end up at the end of this year, but we’ll far exceed last year’s total. On the data side, we went from just an idea to several hundred customers. They have access to prices on organic grains, market analysis on things like acreage, demand, livestock feed numbers, all the types of things you would need and would take for granted in other sectors of the economy. Now our customers have access to basic information on supply and demand and the analysis on top of it.
Moguldom: What are your thoughts on building a good team?
Kellee James: That’s one of the more challenging, and interesting parts of startup life. We started with just my co-founder, Chris Duesing who is the CTO, to today 10 people. It’s a learning curve. For me, I must hire for a particular skill set. You must know commodity markets and trading. I know some can hire on the cliché of “hire for fit,” but for us, we need a specific skill set. We need someone to know how to run regressions and yet have the willingness and desire to work in a startup environment. I also focus on someone who is a good communicator, especially with our team being remote and in three different locations. Building a team that’s remote is an extra layer of complexity. It’s been a learning curve for me, but we’ve got a great team right now, and I think team building is a continual improvement process.
Moguldom: What does success look like for your company?
Kellee James: At a very basic level, success is your profitability. Startup land is kind of famous, or infamous, for companies that get a lot of investor cash and they don’t have a real business model or revenue to justify the hype. I want to build a company that makes money. That’s a very basic metric to go by. More broadly, we’re trying to create something brand new for to the organic and non-GMO agriculture sector, and we hope our works creates more growth for this industry.
Moguldom: How do you keep the creativity flowing to create the best products and services for your clients?
Kellee James: It’s funny, I never really thought of myself as a creative person. However, whenever you’re building something brand new, you tap into your creativity by challenging each other to push yourselves and think of new things. We also regularly say “no” to things, even though the idea is to keep reiterating and keep innovating. Even if 80% of what we suggest doesn’t become a reality, it’s still a useful exercise to go through. Additionally, we try to make sure we’re not just talking amongst ourselves. We get out and talk to our customers, would-be customers and our critics. Constructive criticism can provide you with your next best idea.
Moguldom: What do the next five years look like for your company?
Kellee James: We’re just finishing up raising a new round of funding now. We have some big, ambitious growth targets moving into new agriculture markets. We’re in the process of going outside of the grain industry for the first time and are starting to cover the organic dairy market. Because we are funded by investor capital, there are only two ways to get them their money back. The IPO, which is not our intention, or you’re an acquisition. We recognize in the long-term that’s a path for us.
Moguldom: What will people say about your leadership in the organization years from now?
Kellee James: I think some of the companies I admire are the ones that spin off such creative business leaders who build new companies. What I hope I’m creating is an environment where people are experts and leaders and one day when they’re no longer with Mercaris, they’re out there doing great things. They’re prepared to drive industries and my leadership and their time at Mercaris was an excellent foundation to go and do some other amazing things.