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Agritecture Partners With Harvest Returns Crowdfunding Platform To Modernize Urban Agriculture Financing
The two companies will work together to accelerate the urban farming and controlled environment agriculture (CEA) industry across the country by offering new entrepreneurs a more accessible way to raise capital. This type of farming can reduce the environmental impact of the food system and increase local food security
Image from: Harvest Returns
Fort Worth, Texas – Agritecture, LLC, an urban farming consulting and digital services firm, announced it has partnered with Harvest Returns, an agriculture investing platform.
The two companies will work together to accelerate the urban farming and controlled environment agriculture (CEA) industry across the country by offering new entrepreneurs a more accessible way to raise capital. This type of farming can reduce the environmental impact of the food system and increase local food security.
“The COVID-19 pandemic has revealed the fragility of centralized food production,” said Chris Rawley, CEO of Harvest Returns. “Developing additional indoor farms will distribute growing operations closer to where food is consumed, creating a more resilient food system.”
In 2020, the USDA offered the availability of only $3M in grants for urban agriculture and innovative production. Agritecture notes that the average CapEx, or startup cost, for controlled environment farms modeled via their Agritecture Designer digital platform is $512,000, and nearly one-third are over $1M.
Image from: Urban Ag News
“Since our founding in 2014, we’ve seen sustained, year-over-year growth in interest toward urban agriculture, especially amongst industry newcomers,” said Henry Gordon-Smith, Founder and CEO of Agritecture. This growth has only accelerated since the onset of the pandemic, according to the team at Agritecture, which reported nearly a 2x increase in website traffic since Q1 of 2020.
“Despite this increasing interest and the record levels of funding for the handful of indoor mega farms, financing continues to be one of the primary challenges for small and medium-scale CEA businesses,” Gordon-Smith notes. “Yet, we know these farms can achieve profitability with competitive payback periods, while still serving their local markets and communities.”
Gordon-Smith cites Agritecture’s 2019 and 2020 Global CEA Census Reports, produced alongside agtech solutions provider Autogrow, which show that nearly half of all CEA facilities are being started by those with no previous farming experience.
Furthermore, per their recent census, 78 percent of CEA business founders who attempted to raise money were unsuccessful in doing so through traditional financing sources, such as banks.
“By teaming up with Harvest Returns and their innovative financing platform, we can now deliver a direct link from our planning services and digital platform, Agritecture Designer, to funding opportunities for these smaller-scale facilities,” added Gordon-Smith.
“Autonomy Will Not Happen Until We Start Sharing Data”
In an emerging industry with companies eager to prove their technologies’ worth, Sensei Ag remains form-factor agnostic, meaning that the agtech company remains unbiased towards different farm hardware solutions – focusing more on software and plant biology. Sensei Ag is a market-changing agtech company that develops agile growing solutions through a highly iterative approach to farming, focused on improving the nutritional quality of fruits and vegetables while also reducing production costs. The company combines plant science, computer vision, machine learning, automation and artificial intelligence into its growing systems
In an emerging industry with companies eager to prove their technologies’ worth, Sensei Ag remains form-factor agnostic, meaning that the agtech company remains unbiased towards different farm hardware solutions – focusing more on software and plant biology.
Sensei Ag is a market-changing agtech company that develops agile growing solutions through a highly iterative approach to farming, focused on improving the nutritional quality of fruits and vegetables while also reducing production costs. The company combines plant science, computer vision, machine learning, automation and artificial intelligence into its growing systems.
According to Sensei Ag CEO Sonia Lo, remaining form factor agnostic is key to the company’s mission of providing hyper-nutritious food to as large a consumer base as possible, which it achieves through both vertical farms and greenhouses.
Image from: Sensei Ag
“We believe that the most robust data comes from operating farms of multiple types. So, not just vertical farms, but also low-tech and high-tech greenhouses. And with vertical farms, we are looking at a number of form factors. Our end goal is to be a grower’s resource and know more about growing at scale with different form factors than anyone else.”
The company is also a strong advocate for open data in the vertical farming industry, which is currently lacking, as evidenced by the siloed development of multiple systems and products, some of which cannot be easily integrated into third-party systems.
“There are lots of data flows and increasingly inexpensive farm management systems. The question, then, is the organization of data into intelligence. Intelligence facilitates autonomy, and as we manage data flows, more farms can become autonomous. But I don’t think autonomy will happen until we start sharing data. For example, we saw an automation supplier with a great robot.
The problem was the robot only works in their ecosystem, so you have to buy the whole farming solution in order for the one robot to work. Ideally, that robot would be plug and play and be able to work in greenhouses and vertical farms,” says Sonia.
Image from: Sensei Ag
According to Sonia, open data in the vertical farming industry may currently be restricted by the dominance of venture financing, which has its own return mandates to fulfill and sometimes wants a “winner takes it all” mentality for the ventures it chooses to back. While such financing has allowed the vertical farming industry to emerge, it may ultimately hinder the industry’s scalability and information sharing.
“There is definitely a capital model in Silicon Valley and in venture capital world in general which is not focused on profitability but is focused on technological achievement and market penetration. We saw this in solar and in the renewables industry when multiple venture capital funds invested in solar assets. Then, the bottom fell out because government subsidies fell away in certain jurisdictions.
I hope that agricultural infrastructure currently financed by venture capital will not necessarily follow the same pathway as solar, but will instead find a public-private partnership model. At some point, these farms need to demonstrate a profit for the debt capital markets to allow scale to occur.”
Image from: Sensei Ag
By embracing open data and transparency, Sonia explains that the vertical farming industry can further mature and iterate with technology to continue lowering costs. By continuously collecting and sharing data from different farm forms, the vertical farming industry would have better insights into the true costs which, according to Sonia, “helps drive scale because it enables the finance community to understand how the farms can be risk assessed and financed.”
Looking ahead, Sensei Ag hopes to form partnerships around the world to bring its innovative, data-driven growing systems across the globe. Taking the Middle East, China and Japan as examples, Sonia explained that the goal would be to choose strategic partners in each region whose local knowledge and business prowess would allow Sensei Ag to iterate its technologies appropriately and serve local markets, bringing cost-competitive farming techniques and nutritious, local produce around the world.