March 8, 2022

photo credit: Source.ag

By Lynda Kiernan-Stone, Global AgInvesting Media

The increase in demand across Europe during the global pandemic for organic foods and foods produced without the use of chemical inputs, along with a drop in cost for LED lighting, are examples of two factors driving growth for indoor farming across the EU, which is expected to see a CAGR of 10.4 percent between 2021-2028, according to a recently released report by ReserachAndMarkets, to reach a value of US$23.28 billion. 

This potential has translated to more robust funding rounds. In January of this year, London-based controlled environment agriculture (CEA) technology and research startup Vertical Future raised what is being acknowledged as the largest round to be closed in the European CEA space, when it secured £21 million (US$29 million) through a Series A backed by Pula Investments, environmentalist Gregory Nasmyth, Dyfan Investment, SFC Capital (the second-largest shareholder in the company), Nickleby Capital (representing certain UHNW family offices), and other unnamed investors.

Amsterdam-based Source.ag is not far behind – announcing it has secured $10 million in Seed funding led by Acre Venture Partners, with participation from MIT-affiliated E14 Fund, Astanor Ventures, and top growers Agro Care, Rainbow Growers, and Harvest House Cooperative.

By leveraging technology, Source.ag intends to democratize access to sufficient fruits and vegetables through AI-driven greenhouses, which the startup stated is a safer, more reliable, and climate-resilient method of production.

Although there exists huge potential – greenhouses can produce yields that are 15 times higher than traditional agriculture while using 20 times less water, and global demand for greenhouse agriculture is growing – adoption is being hindered by a persistent shortage of growers able to operate these facilities, according to Source.ag.

“By combining plant models with machine learning techniques, we can simulate crop development in any environment,” said Rien Kamman, CEO and co-founder, Source.ag. “Our technology provides growers with advice on the optimal cultivation strategy and support to realize it. This is an important first step in our mission to deliver more healthy food to more people without breaking our planetary boundaries.”

Founded in November 2020 by CEO, Rien Kamman, and CTO, Ernst van Bruggen, the startup’s proprietary algorithms simulate plant behavior to determine and execute optimal cultivation strategies by taking into account millions of data points on climate, biology, and resources. This pioneering tech platform makes greenhouse production more accessible, profitable, and globally scalable by enabling more growers to operate more facilities.

“Climate change is driving substantial scarcity and strains in our global food supply. As this accelerates in the coming years, we must find ways to scale efficient growing solutions that lighten the footprint of agriculture,” said Lucas Mann, managing partner, Acre Venture Partners. “Greenhouse agriculture is a proven and viable solution, but without innovation, demand will be impossible to meet. We believe Source.ag can play a vital role in driving its global scalability.”

European greenhouse vegetable producers also have advantages over intensive vertical farming startups, which can see initial investment requirements that are up to 10 times higher compared to the capital required for high-tech greenhouses, according to the paper, Vertical Farming in Europe, Present Status and Outlook, by Michele Butturini and L.F.M. Marcells, Wageningen University and Research, published in January 2019.

“Greenhouse vegetable producers often have established relationships with food distributors and are high-efficiency operators,” noted the authors. “Therefore, they may compete with vertical farms, instead of complement, for the same market, especially in regions or countries with a high concentration of greenhouses, like the Netherlands.”

In advance of its roll-out, Source.ag has partnered with Agro Care, a top Dutch grower, and one of the largest tomato growers in the world, with seven locations growing tomatoes in 261 hectares of greenhouses in four countries. 

Kees van Veen, CEO of Agro Care, commented, “Source has built an intelligent platform that provides unprecedented insights and instantly shows us crucial information that can make or break a season. The A.I. that they are developing has the potential to optimize for key factors that can help us get to more consistent results at scale.”

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– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.