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VIDEO: Will This Y Combinator-Backed Startup’s Urban Home Farms Take Root In India?
UrbanKisaan leverages hydroponic technology for home growing kits, as well as a network of urban farms for online delivery and retail channels
Inc42 Staff
27 Aug'20
UrbanKisaan leverages hydroponic technology for home growing kits, as well as a network of urban farms for online delivery and retail channels
During the lockdown phase, the company claimed to have seen 10x growth in terms of demand for its fresh produce, compared to pre-Covid times.
Based in Hyderabad, UrbanKisaan has installed close to 30+ vertical farms and plans to expand to Bengaluru, Chennai among other cities
There’s a minor revolution underway in many of India’s biggest cities. We are talking about hydroponic farming and this soil-less method is fast becoming the answer to solving the problem of carbon footprint in food. Call it hydroponic farming, soilless farming, vertical farming or anything else — for many it is the long-awaited answer to responsible eating.
In this backdrop, agritech and hydroponics startups are quickly finding niches in various produce categories and cities. Despite their shared ethos for sustainable food production, the likes of UrbanKisaan, Barton Breeze, Hydrilla, Simply Fresh, Acqua Farms, Letcetra Agritech, BitMantis Innovations, Future Farms, Ela Sustainable Solutions, Agro2o, Junga FreshnGreen, Pindfresh are working in this field through different models and targeting different niches — from large-scale hydroponics farming in rural areas to small home farms for the cities.
Working on the philosophy of bringing farms closer to home is Hyderabad-based UrbanKisaan. With the vision of making hydroponic technology more affordable and accessible for the masses, UrbanKisaan offers home-grow kits or vertical hydroponic farms. And by creating mini-farms in cities and revitalizing farmlands with hydroponic technology, the startup also supplies fresh produce to customers through Swiggy, Zomato, Dunzo, and other retail channels as well as in the D2C model on subscription and on-demand basis.
“We are the only startup in the hydroponic landscape to have taken a hybrid approach, where we have 20,000 sq. ft. research and development facility, along with 15+ in-house scientists working on newer innovations and products,” claimed cofounder and CEO Vihari Kanukollu elaborating on how the company is looking to differentiate itself in the burgeoning hydroponic market.
However, UrbanKisaan is not alone in the game, Simply Fresh, another Hyderabad based agritech startup, also grows and supplies a line of medicinal plants and fresh produce from its greenhouses. Similarly, Chennai-based Future Farms works on hydroponic technology at a commercial level, where it designs integrated full-stack solutions for alternative farming in the country. The vibrancy of the hydroponic models and the large ground area that needs to be covered across cities and villages has made it possible for multiple startups to thrive in this space.
Needless to say, the market opportunity is huge, as ‘urban farming’ is catching up at a rapid pace globally. According to MarketsandMarkets, the global hydroponics market is expected to reach $16.6 Bn by 2025, growing at a compound annual growth rate of 11.9% from $9.5 Bn in 2020. The growth of the sector is said to be driven by the increase in population and the need for food security through alternative high-yield farming techniques, given the depletion of water across the globe.
Plus, the rise in awareness and demand for a healthier lifestyle is said to have opened doors for a plethora of possibilities for hydroponic startups to reap the benefits in the long run.
UrbanKisaan earns revenue from its multiple channels which allow it to reach all kinds of consumers — from those who want a taste of the hydroponic produce to those who want to grow it themselves. Its urban farms are strategically located next to retail stores to facilitate hyperlocal deliveries and its DIY home kits are for the latter set. Additionally, it is also supplying its technology to local farmers to reutilise farmland.
The startup was founded in 2017 by Kanukollu, Srinivas Chaganti, Dr Hari, Shiva Prasad and Dr Sai Ram, a scientist who has been instrumental in developing the nutrient solution for their state-of-the-art vertical farming technique. In March 2020, the company also raised $1.5 Mn in seed funding from Y Combinator.
Home Farming In The Times Of Covid
During the lockdown phase, the company claimed to have witnessed 10x growth in terms of demand for its fresh produce, compared to pre-Covid levels. Further, cofounder Kanukollu said that the disruption in the supply chain and consumers leveraging on the hyperlocal delivery modes, along with the change in consumer lifestyle, for the consumption of fresh, organic produce has resulted in the surge in demand.
The Covid-19 pandemic temporarily halted the movement of produce across India and highlighted the gap in the food supply chain. This allowed agritech startups such as UrbanKisaan that specialise in hydroponic farming to tap a tremendous opportunity and bring efficiency in the supply chain.
With its hyperlocal urban farms model, Kanukollu claimed UrbanKisaan is not only bringing transparency to the vegetable supply chain but also lowering the carbon footprint, reducing food waste. Most importantly, their farming technique also claimed to save 95% water, and grow the produce 30x compared to traditional farms.
Its home kits are priced anywhere between INR 9,900 and INR 19,900 with about 50+ varieties of leafy vegetables and exotic vegetables supported by these kits, including spinach, coriander, mint, basil, bok choy, lettuce, parsley, fenugreek, capsicum, tomato and kale among others.
Further, the company claimed to have semi-automated the entire process and has designed the kits in such a way that it requires limited resources to manage it. “Once installed, it requires 15 min/week of effort to take care of the plants, thereby making it seamless for consumers to grow their own fresh produce,” said Kanukollu.
A Tech Upgrade For Rural Farmers
In addition to this, UrbanKisaan also works with local farmers who own greenhouses, where it helps them in setting up vertical farms from scratch to producing and supplying fresh fruits and vegetables.
Cost-wise, the poly house or greenhouse setup would typically cost farmers anywhere between INR 35 to INR 50 Lakhs per acre, of which, the government may subsidise up to 80%. Once this is installed, which is a fixed cost, for setting up of hydroponic setup, it would cost the farmer additionally INR 50 Lakhs. But, UrbanKisaan told Inc42 that it looks to reduce this cost at INR 15 to INR 20 Lakhs.
UrbanKisaan claims to have installed close to 30+ hydroponics farms in the state, across its various offerings. In the coming days, it plans to expand into other cities, including Bengaluru, Chennai among others, along with growing its team, adding newer varieties of hydroponic seeds, fruits and vegetables, and enhancing its technology capabilities.
Kanukollu is looking at creating a centralised monitoring system through UrbanKisaan for these various hubs and farms. “We are heavily investing in artificial and machine learning tools, where once the network of the urban farm increases, we will be able to monitor and control their farms remotely and provide a real-time update to customers.”
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 Singaporean 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 Singaporean strawberries to Arctic tomatoes.
In Latin America, however, indoor vertical farms are still largely written off on a continent thought of in terms of its abundant fertile soil and plentiful sunlight. Why pay for artificial light or indoor automation when the sun is free, and labor and land are cheap?
That said, there are early signs of a Latin American vertical farming awakening in Chile, where AgroUrbana has just closed a $1 million seed round, bringing its total capital raised to $1.5 million. The startup has created 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 VC arm of Fundación Chile, a public-private initiative for innovation and sustainability in the country. Support financing also came from CORFO, Chile’s economic 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 an interview with AFN, AgroUrbana founders 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, renewable energy-powered stacks of hydroponically grown, LED-lit leafy greens and fruits. AgroUrbana’s first big offtake deal has 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,” Bunster recalls, describing the political turmoil in Chile that brought curfews and shuttered restaurants months before Covid-19 locked down the country. That earlier disruption, he adds, 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 envisions an eventual 30,000 square foot facility to be bankrolled by Series A funding 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. AeroFarms raised $100 million in late-stage funding in 2019 while Fifth Season secured $50 million last year.
Although centralized facilities have generally dominated in terms of raising capital, 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-coronavirus world also holds sway in the popular and corporate imagination of 2020. Companies like Square Mile Farms recently crowdfunding over $300,000 on the promise of re-kitting office spaces like 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 relative giants like Plenty or InFarm could be daunting for newer entrants such as 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 endeavours. Here, both Bunster and Sjögren see parallels with the renewable energy 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 power purchase agreement, in which they buy renewable energy from an existing plant; finance a power plant which will sell energy 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 on-site.
The pair describe 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, replies Bunster. As for gene editing, where South American jurisdictions are known to have more lax regulations than their North American counterparts, Bunster says the plan was to work with what nature already provides, while giving “the conditions of spring every day of the year.”