March 22, 2021

By Lynda Kiernan, Global AgInvesting Media

UAE-based tech-driven agribusiness Pure Harvest Smart Farms (Pure Harvest) announced that it has secured $60 million in growth funding through a first-of-its-kind Islamic financing solution. 

Led by SHUAA Capital, the leading asset management and investment banking platform in the region, this funding was secured through a highly structured Sukuk – a novel growth-financing/venture debt solution that includes embedded warrants.

This Sukuk was anchored by Franklin Templeton Investments with significant participation from Sancta Capital, and is complemented by a $10 million incremental growth equity raise in January 2021 that was led by Sancta with participation from new and existing investors.

Co-founded by Silicon Valley private equity investor Sky Kurtz and his Emirati business partner Mahmoud Adi on the premise that the region needs local, sustainable food sources, Pure Harvest is a technology-driven greenhouse production agribusiness dedicated to the year-round, sustainable production of premium fresh fruits and vegetables.

“We are thrilled to have secured this innovative structured financing solution that supports our aggressive growth campaign within the GCC region,” said Kurtz. “We are passionate about our mission to make local-for-local production of high-quality fresh produce possible anywhere, including within the harsh climate of our home the Arabian Gulf.”

Kurtz continued, “World events like the COVID pandemic highlight the critical need for homegrown food solutions to reduce our reliance upon international supply chains. This type of financing underscores the innovation occurring within the region’s venture capital markets. Congratulations to our financing partners for this first-of-its-kind solution. We thank you for believing in us.”

As innovators of the first commercial-scale, semi-automated and high-tech greenhouse, Pure Harvest leverages innovative growing technologies and horticultural best practices for the production of affordable, pesticide-free, and locally grown fresh produce.

Although advances in technology resulted in an increase in food production in the MENA region in the 1990s, the region was still expected to see a food deficit of between 50 million tons and 90 million tons by last year. 

Not only can high-tech systems like Pure Harvest’s reverse the water withdrawal connected with traditional agricultural production while also addressing food security and sustainability, it can also create possible export opportunities for the region while adding a measure of diversification to widely oil-dependent economies.

Currently, Pure Harvest is close to completing its third hybrid greenhouse growing system in the Emirates, is currently constructing its beachhead in Saudi Arabia, and announced an additional EUR39 million (US$46.5 million) expansion project in Kuwait.

Once completed, these projects will produce a variety of tomatoes, leafy greens, and berries, with plans to expand into new crops in the future. And the company stated that the capital generated through these transactions will be used to support its capacity expansion, to attract new talent to its team, advance its R&D initiatives (including various innovative projects in partnership with the Abu Dhabi Investment Office), and to drive entry into new markets.

“At SHUAA, we have a strong track record in identifying businesses with market-leading propositions and teams and Pure Harvest fits this criterion perfectly,” said Natasha Hannoun, with SHUAA. “We witnessed Pure Harvest Smart Farms’ leadership in Agriculture Technology (AgTech), the strength of the team, and its proven ability to execute, giving us the confidence that Pure Harvest has significant growth potential as it seeks to address the need for food security within the Gulf and wider region.”

Pure Harvest’s business model and success has proven that the MENA region, with its vast land bank, abundant sunlight, affordable labor and electricity, and ample CO2 can indeed be a valuable agricultural production region through leveraging these benefits to offset the cost of comparable imported fresh produce. This, in turn, strengthens the region’s food security, creates jobs, and generates novel and lucrative investment opportunities for investors. 

“We are delighted that SHUAA has been able to deliver this innovative and highly complex structured financing solution for Pure Harvest Smart Farms in another regional first,” said Natasha Hannoun. “This funding will help the company to scale into a major regional player in controlled-environment agriculture and we are excited to back the region’s AgTech champion when it comes to food security, sustainability and economic diversification.”

Gus Chehayeb, CIO, Sancta Capital added, “Sancta Capital is proud to play an active role in Pure Harvest’s Sukuk and growth equity raises. The company is the region’s most advanced AgTech player and has built significant brand awareness, defensible intellectual property, and a top-tier management team with a large, vested interest in its success.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.