Gevo Acquires CultivateAI for its Verity Business Unit

Rhea-AI Summary

Gevo, Inc. (NASDAQ: GEVO) has acquired Cultivate Agricultural Intelligence, (CultivateAI) for $6 million in cash, with potential additional earn-out payments. CultivateAI will be integrated into Gevo's Verity subsidiary to accelerate business development and growth. CultivateAI, a proven business with expected 2024 revenue of $1.7 million and positive cash flow, provides agricultural data through a SaaS platform.

The acquisition aims to combine CultivateAI's digital agriculture data and analytics platform with Verity's carbon accounting and tracking solutions. This integration is expected to provide high-quality, data-driven solutions for carbon abatement in various markets while helping farmers improve operations, sustainability, and profitability.

Gevo anticipates that this acquisition will accelerate Verity's development, increase customer value, and create new revenue streams outside the biofuel segment. The company views this as an opportunity to support its mission of growing an efficient circular economy and delivering shareholder returns through scalable revenue opportunities.

Positive

• Acquisition of CultivateAI for $6 million in cash, with potential for additional earn-out payments
• CultivateAI expected to generate $1.7 million in revenue and positive cash flow in 2024
• Integration of CultivateAI's platform with Verity's solutions to provide enhanced data-driven services
• Expansion into new markets beyond biofuels, creating additional revenue streams
• Acceleration of Verity's business development and growth

Negative

• None.

Insights

Financial Analyst

The acquisition of CultivateAI by Gevo for $6 million in cash, with potential earn-out payments, is a strategic move to enhance its Verity subsidiary. This deal is expected to accelerate Verity's revenue and growth, with CultivateAI projected to generate $1.7 million in revenue for 2024 with positive cash flow.

The integration of CultivateAI's SaaS platform with Verity's carbon accounting solutions creates a comprehensive offering for carbon abatement across various markets. This synergy could lead to increased market share and customer base expansion beyond the biofuel segment.

For investors, this acquisition represents a diversification of revenue streams and potential for scalable growth. The immediate addition of profitable revenue is positive, but the long-term value lies in the enhanced capabilities and expanded market opportunities. However, the full impact on Gevo's financials will depend on successful integration and market adoption of the combined solutions.

Agricultural Technology Expert

The acquisition of CultivateAI by Gevo marks a significant advancement in the integration of digital agriculture with carbon accounting. CultivateAI's cloud-based, mobile platform for real-time analytics in farm operations complements Verity's focus on carbon tracking and valuation.

This merger addresses a critical need in the agricultural sector for data-driven decision-making tools that simultaneously improve operational efficiency, sustainability and profitability. The combined platform has the potential to offer farmers and agribusinesses a unique value proposition by linking agricultural practices directly to carbon intensity metrics.

The move also positions Gevo/Verity at the intersection of two growing trends: precision agriculture and carbon markets. This could lead to a competitive advantage in attracting both traditional agricultural clients and those seeking to participate in emerging carbon credit systems, potentially driving significant long-term growth.

Accelerates revenue, capability, and growth of Verity

ENGLEWOOD, Colo., Sept. 26, 2024 (GLOBE NEWSWIRE) -- Gevo, Inc. (NASDAQ: GEVO) has acquired Cultivate Agricultural Intelligence, LLC (“CultivateAI”) for $6 million in cash, with the opportunity for the sellers to receive additional earn-out payments. Gevo will fold CultivateAI into its wholly owned Verity subsidiary to accelerate Verity’s business development and growth. CultivateAI is a proven business with expected 2024 revenue of $1.7 million and corresponding positive cash flow. CultivateAI provides agricultural data to clients through a software as a service (“SaaS”) platform.

Gevo expects to combine CultivateAI’s digital agriculture data and analytics platform with Verity’s carbon accounting and tracking solutions to provide the highest quality data-driven solutions for carbon abatement in food, feed, fuels, and industrial markets, while simultaneously helping farmers improve their operations, sustainability, and profitability. CultivateAI’s SaaS platform is a cloud-based, mobile platform that helps farm operators, agronomists, ag-service providers, and researchers make informed, data-driven decisions with real-time analytics.

“Adding CultivateAI and its inventive approach to Verity will help us grow revenue by providing the most complete set of data-driven analytics services to farmers, agronomists, and researchers,” said Dr. Paul Bloom, Head of Verity and Chief Carbon Officer of Gevo. “With this acquisition, Verity is speeding up our development and increasing the value we will deliver to our customers.”

Verity is at the forefront of creating the ability to track, verify, and empirically value carbon intensity across the full carbon lifecycle. By adding the tools and existing business from CultivateAI, Verity will benefit from the addition of clients outside the biofuel segment as well as additional revenue streams.

“We are constantly looking for this kind of development that delivers new streams of untapped revenue to the company,” said Dr. Pat Gruber, CEO of Gevo. “As we accelerate development of Verity, we expect to see these customer relationships and revenue opportunities grow as customers seek out new products and services that help them understand their businesses better. These new business elements support our mission of growing an efficient circular economy, and delivering shareholder returns by adding scalable revenue opportunities now.”

About Gevo
Gevo's mission is to convert renewable energy and biogenic carbon into sustainable fuels and chemicals with a net zero or better carbon footprint. Gevo’s innovative technology can be used to make a variety of products, including sustainable aviation fuel (“SAF”), motor fuels, chemicals, and other materials. Gevo’s business model includes developing, financing, and operating production facilities for these renewable fuels and other products. It currently runs one of the largest dairy-based renewable natural gas (“RNG”) facilities in the United States. It also owns the world’s first production facility for specialty alcohol-to-jet (“ATJ”) fuels and chemicals. Gevo emphasizes the importance of sustainability by tracking and verifying the carbon footprint of its business systems through its Verity subsidiary.

For more information, see www.gevo.com.

About Verity
Verity is at the forefront of creating the ability to track, verify, and empirically value carbon intensity across the full carbon lifecycle. Verity Holdings, LLC is a wholly owned subsidiary of Gevo, Inc.

For more information, see www.veritytracking.com.

About CultivateAI
CultivateAI is a cloud-based, mobile platform that helps its customers make informed, data-driven decisions with real-time analytics. Its trusted insights are designed to help agricultural operations increase production, manage risk, and maximize profitability.

For more information, see cultivateagi.com.

Forward Looking Statement
Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to a variety of matters, including, without limitation, CultivateAI and its operations, the integration of CultivateAI into Verity, CultivateAI’s expected financial results and other statements that are not purely statements of historical fact. These forward-looking statements are made based on the current beliefs, expectations, and assumptions of the management of Gevo and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and Gevo undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Gevo believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Gevo in general, see the risk disclosures in the Annual Report on Form 10-K of Gevo for the year ended December 31, 2023 and in subsequent reports on Forms 10-Q and 8-K and other filings made with the U.S. Securities and Exchange Commission by Gevo.

Media Contact
Lindsay Fitzgerald
Senior Vice President of Public Affairs
PR@gevo.com

Investor Contact
Eric Frey, PhD
Vice President of Finance & Strategy
IR@Gevo.com

FAQ

What company did Gevo (GEVO) acquire and for how much?

Gevo (GEVO) acquired Cultivate Agricultural Intelligence, (CultivateAI) for $6 million in cash, with the possibility of additional earn-out payments.

What is the expected revenue of CultivateAI for 2024?

CultivateAI is expected to generate $1.7 million in revenue with corresponding positive cash flow in 2024.

How will the CultivateAI acquisition benefit Gevo's Verity subsidiary?

The acquisition will accelerate Verity's business development and growth by combining CultivateAI's digital agriculture data and analytics platform with Verity's carbon accounting and tracking solutions, providing enhanced data-driven services to customers.

What new markets will Gevo (GEVO) expand into with this acquisition?

With the CultivateAI acquisition, Gevo's Verity subsidiary will expand into markets outside the biofuel segment, including services for farmers, agronomists, and researchers in the agricultural sector.