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Vertical Farming In LatAm: AgroUrbana Closes $1m Seed Funding
Access to vertical farming technologies is deepening and widening across the world, bringing down the costs and hassle of locally producing anything from Singapore strawberries to Arctic tomatoes
July 2, 2020
Access to vertical farming technologies is deepening and widening across the world, bringing down the costs and hassle of locally producing anything from Singapore strawberries to Arctic tomatoes.
In Latin America, however, indoor vertical farms are still largely written off on a continent known for its abundant fertile soil and plentiful sunlight. Why need of artificial light or indoor automation when the sun is free and labor is cheap?
That said, there are early signs of a LatAm vertical farming awakening in Chile, where AgroUrbana has just raised a $1 million seed round, bringing its total capital raised to $1.5 million. AgroUrbana is South America’s first vertical farm, according to the Association for Vertical Farming.
Leading the round by contributing 33% of the cash was the CLIN Private Investment Fund administered by Chile Global Ventures, the venture capital arm of Fundación Chile, a public-private initiative for innovation and sustainability in the country. Support financing also came from CORFO (Chile’s Development Agency) and private investors like company builder and VC Engie Factory, the country’s largest telecommunications company Entel, and sustainability investor Zoma Capital.
In a video call with AFN, AgroUrbana f0unders Cristián Sjögren and Pablo Bunster described how the funds would be put to work at their 3,000 square feet pilot facility in the suburbs of Santiago, where testing is ongoing on layered stacks of hydroponically grown, LED-lit, renewable energy powered leafy greens and fruits. AgroUrbana’s first big offtake deal had just been inked with a major Chilean grocery retailer, they said.
A pre-planned switch from restaurant to retail
“It’s been run, run, run,” recalled Bunster, describing the political turmoil in Chile that brought curfews and shuttered restaurants months before Covid-19 locked down the country. That earlier disruption, he added, had actually had its upsides, as it got them thinking more about e-commerce and direct-to-consumer sales — so when the team’s restaurant deals dried up during the Covid-19 pandemic, the switch to retail was already scoped out.
As to scaling up further, Sjögren envisioned an eventual 30,000 square foot facility that would be bankrolled by a Series A that they plan to work towards later this year; the design and output would depend on the results of their pilot trials.
This size of farm sets the team somewhere in the middle of the two dominant visions of vertical farming: centralized versus distributed. Proponents of centralized systems argue that large-scale production—and financial viability—depend on ever-bigger and higher farms. These farms, or plant factories as they are sometimes called, are proliferating, aided by huge sums of capital. Plenty scooped up a whopping $200 million in Series B funding back in 2017. US-based AeroFarms raised $100 million in late-stage funding in 2019 while Fifth Season secured $50 million last year.
Although centralized facilities have generally dominated the vertical farming venture capital domain, distributed and decentralized business models are gaining pace, according to AgFunder’s 2019 industry report. One in particular—Germany’s Infarm—nabbed $100 million last year to deploy its connected growing cabinets in supermarkets. The theatricality of these cabinets harmoniously glowing in office buildings or hospitals in a post-corona world also holds sway in the popular and corporate imagination of 2020, with companies like Square Mile Farms recently crowdfunding over $300,000 on the promise of re-kitting office spaces like those of Microsoft’s London premises with fresh produce. In New York, Farmshelf has its own grow cabinets deployed in WeWork FoodLabs.
Learning from cash-heavy first movers
Mention of giants like Plenty or InFarm could be daunting for newer companies like Square Mile Farms or AgroUrbana and their hitherto modest sums raised. But there is perhaps an advantage in starting late — so long as the team learns from the costly mistakes and hubris of earlier endeavors. Here, both Bunster and Sjögren see parallels with the renewable industry, where they worked previously, and see the arrival of cheaper, more sustainable energy and capital in Chile as crucial to making vertical farming competitive.
AgroUrbana is exploring three options for solar going forward: either establish a PPA, in which they buy renewable energy from an existing plant; to finance a power plant which will sell to them later; or build their own solar farm. But they acknowledge that the larger the facility, the less feasible it is to have solar onsite.
The pair described how some Chilean outdoor farming is already lean and competitive, yet much of it has been geared towards high-value crops like avocados — and that stuff is primed for export. For the urbanizing local market, they see gaps for hyper-local fresh produce, where the competition would actually be with low-tech smallholder farmers with less traceable supply chains. In the context of Covid-19 and an ensuing consumer embrace of e-commerce options, better nutrition, less water use, and fewer pesticides, the pair reckon there is much to gain from providing produce that is consistently fresh 365 days a year.
Any chance of the world’s first vertically-farmed avocados any time soon? Unlikely, replied Bunster. As for gene editing, where Latin America is known to have more lax regulations than North America, Bunster said the plan was to work with what nature already provides, and just give them “the conditions of spring every day of the year.”
New Digital Publication And Podcast Launched by Agritech Specialist, IGS
Covering the theme of global sustainable food security, the inaugural edition of Clima features interviews with Professor Colin Campbell, Chief Executive at the James Hutton Institute and Michael Dean, co-founder of specialist agrifood venture capital platform AgFunder
Edinburgh, Scotland – 12 June 2020 - Indoor agritech specialist IGS has today launched Clima, its new digital publication and accompanying podcast series. Through Clima, IGS will welcome industry-leading interviewees and share thought pieces on some of the most fundamental issues facing the world, including supply chains, agricultural innovation, and indoor growing.
Covering the theme of global sustainable food security, the inaugural edition of Clima features interviews with Professor Colin Campbell, Chief Executive at the James Hutton Institute and Michael Dean, co-founder of specialist agrifood venture capital platform AgFunder.
Professor Colin Campbell, who leads the world-renowned James Hutton Institute near Dundee, Scotland, explores what he believes are the greatest barriers to achieving a secure, sustainable food supply and the role science and technology have to play in attaining this goal. Continuing the theme, Michael Dean shares his thoughts on the impact of the COVID-19 pandemic and explores the future of food supply chains.
David Farquhar, Chief Executive of IGS, commented: “At IGS we are very aware just what a challenging time this is for our customers and partners, with many countries across the globe still considering the right strategies to alleviate COVID-19 restrictions. Clima was born from our desire to bring the industry together and drive collaboration, informed discussion, and debate which we hope will help to create a more sustainable and secure food eco-system for the future.
“We are very excited to launch Clima publicly and to have the opportunity to share the insights of two brilliant interviewees, both of whom are leading their fields. We hope that readers of Clima and those who listen to the podcast get as much out of it as we have in the process of producing this first edition.”
To subscribe to Clima and to access the first edition, please visit www.igsclima.io.
About IGS:
Founded in 2013, IGS brought together decades of farming and engineering experience to create an agritech business with a vision to revolutionize the indoor growing market. Its commitment to innovation has continued apace and it has evolved the applications of its technology beyond agriculture to create solutions for a wide variety of indoor environments that enhance life for people, plants, and animals.
IGS launched its first vertical farming demonstration facility in August 2018, based at the James Hutton Institute in Invergowrie.
For more information visit www.intelligentgrowthsolutions.com or connect with us on Twitter and LinkedIn.
What’s Next For Vertical Farming? Proprietary Strawberries And Other Non-Leafy Produce
Agtech investment firm AgFunder announced this week that it has added agtech company SinGrow to its investment portfolio for an undisclosed sum
Agtech investment firm AgFunder announced this week that it has added agtech company SinGrow to its investment portfolio for an undisclosed sum. AgFunder founding partner Michael Dean wrote in a post that SinGrow “isn’t just looking to be another vertical farmer selling leafy greens.” Instead, the company uses a combination of plant biology, hydroponic vertical farming, and other technologies to grow what it hopes will be a range of produce types, starting with its own novel varieties of strawberries.
As Dean lays out in his post, SinGrow has developed a vertical farming solution that addresses every stage of a plant’s agricultural journey, from breeding to harvesting. (Most vertical farm solutions do not address plant breeding.) It breeds strawberry varieties adapted to humid weather and has two proprietary strawberry cultivators specifically developed for Singapore’s tropical climate. Both of those things mean SinGrow’s system uses less energy because it needs less air conditioning pumped in to cool the facility and reach the ideal growing temperature for the strawberries.
The company also grows the plants on a strawberry-specific rack it has developed, where the plants grow outward instead of upward. That in turn allows a harvesting robot to drive alongside the rack and simply snip the strawberries off rather than pick them.
Why strawberries? Well, first, they’ve been a hobby of SinGrow cofounder Bao Shengjie, who has been cross-breeding strawberry seeds since 2016. That particular fruit was of interest to the founders because it’s difficult to actually get in Singapore, at least at an affordable price point. SinGrow lists expenses, poor taste, and an unstable supply chain as reasons strawberries are difficult for the average consumer to buy in that region.
The company has this neat explainer video that delves more into the specifics on how it grows its strawberries.
Singapore also relies on imports for about 90 percent of its foods, hence the Singaporean government’s 30x30 initiative launched in response to the COVID-19 pandemic: Singapore should have 30 percent of its foods produced domestically by 2030.
On that note, SinGrow hopes to soon move beyond strawberries to grow grapes, saffron, and other crops, according to Dean’s post.
A (very small) handful of companies are also exploring what else they can grow beyond the leafy green. UK-based Phytoponics is trialing a system for plants like cucumbers, tomatoes, and peppers. And a while back, San Francisco startup Plenty said it wanted to grow “exotic” produce on its farm Tigris. To date, though, the company’s website still offers only leafy green varieties.
If a company like SinGrow can show others how to use biology, technology, and farming to grow a greater assortment of produce items, it could change vertical farming’s role in our system from an add-on method to a primary source for getting certain fruits and vegetables. It’s early days yet, but the technology looks to be moving in that direction.