May 14, 2024

By Lynda Kiernan-Stone, Global AgInvesting Media

hexafarms, an agtech startup developing software for indoor commercial food production, has closed on €1.3 million (US$1.4 million) in pre-Seed funding led by European early-stage investor Speedinvest and including Mudcake and techstars. 

The potential benefits of controlled environment agriculture (CEA) – year-round production, adaptability, input efficiency, land use maximization, reduced environmental impact, etc. – make it a promising solution for sustainably increasing food production and addressing food insecurity at local, regional, and global levels. 

These benefits make CEA a market that is poised to reach a value of $100 billion by 2030, however, our current global food production ecosystem is facing significant challenges. Fourteen percent of all food produced is lost between harvest and retail, and approximately 10-30 percent is lost between the seed and harvest.

hexafarms explained that considering that about 55 percent of the fruits and vegetables consumed in cities in the West are cultivated indoors makes a streamlined approach to food production in indoor spaces, including greenhouses, an essential response to these hurdles. 

This need led to hexfarms’ mission to address these inefficiencies in the CEA food production system which relies on manual labor – something that is neither scalable nor sustainable – by offering an AI-driven SaaS solution to foster optimized production in commercial greenhouses and address a 30 percent loss in investments due to under-optimized production. 

“Although the global agriculture industry plays a fundamental role on a vast scale, it’s dishearteningly under-optimized,” said David Ahmed, founder and CEO, hexafarms. “Our mission is to revolutionize this landscape. With our constantly evolving AI models, we aim to unlock potential savings of nearly 30 percent in variable costs and losses. By harnessing the power of algorithms, we can cater to the individual needs of each plant at any scale, surpassing the capabilities of human intervention.”

Serving large scale operations, hexafarms leverages diverse data from cameras and sensors to yield meaningful insights enabling a 30 percent increase in season harvest for high-value crops. The company’s app then provides growers with accurate, tailored information about harvest times as well as highlighting issues that can be addressed to optimize plant biology in the production process. 

As a whole, this scalable solution combines plant biology expertise with AI models resulting in a competitive edge over human expertise alone when approaching commercial food production. 

“The agricultural sector is in urgent need of innovative solutions to address the pressure from climate change on commercial food production process and food insecurity,” said Andreas Schwarzenbrunner, partner with Speedinvest’s Climate Tech & Industrial Tech investment team.

“We have strong confidence in hexafarms and cannot wait to see them further develop their AI and machine learning capabilities and expand their team of experts. We are convinced that their app will transform commercial food production through optimisation and digitalisation.”

With this new investment, which brings hexafarms’ total funding to-date to more than €2.5 million, (US$2.7 million), the company intends to continue its investment in its AI and machine learning capabilities, to increase the accuracy of its predictions and grow the company’s portfolio of crops. This, despite the fact that hexafarms currently has the widest portfolio across Europe based on public information on supported crops and cultivars, and is currently processing an estimated 9 million kilos of strawberries and tomatoes this quarter. 

“Over 9 billion people will need healthy and nutritious food over the next decades,” said Anna Ottosson, founding partner, Mudcake. 

“We can only achieve this by increasing the efficiency of our production systems. Using their unique AI-optimized software for commercial greenhouses, hexafarms will help ensure food security for current and future generations. We are proud to back them in that important mission.” 

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News. She can be reached at lkiernan-stone@globalaginvesting.com.

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