The UK crowdfunding platform Crowdcube is currently hosting a new AgTech campaign by an interesting firm within the AgTech space called Zero Carbon Farms.
This UK-based firm is building closed-loop, sustainable indoor farms that are an echo of existing much better know players such as Aerofarms (about to list in the US) and AppHarvest, already listed stateside.
These closed-loop environments are one of the most promising parts of the fast-growing AgTech spectrum although they also involve significant investment in capital and new equipment. The upside is that as this technology improves, costs come down and the technology can, in turn, be licensed out to other farming firms.
Zero Carbon farms is one such player and you can see their current campaign here at Crowdcube: https://www.crowdcube.com/companies/zero-carbon-farms/pitches/Z7nErl
The young business is targeting a raise of £3.4m in return for 25.77% equity based on a £11m pre-money valuation (with each share price at £0.02). According to the business, the closed-loop nature of the business model makes it highly sustainable. Its production methods mean it can produce 70x more output than traditional farmland, Pesticide & GMO-free food. Output is all year round, to a consistent level, with high quality, nutrition, flavour, according to Carbon Zero.
Crucially that means a longer shelf life which should mean less food waste, a smaller carbon footprint and fewer food miles. Last but by no means its indoor farming process involves 0% less water than traditional growing techniques.
Unlike many projects we see in the AgTech space this is an established, revenue producing business with a solid production model. Carbon Tree – which employs around 35 people – has around 500 square metres of existing growing space (producing just under 70 tonnes of produce) and is already producing fairly solid month on month revenues. If expansion goes to plan, that facility could hit 4000 sqm within the next few years (and just under 600 tonnes of produce by 2023). That should in theory push up revenues tenfold on a monthly basis.
Carbon Zero highlights some other key stats, including the following:
- Highest placed UK AgTech company in this year’s FoodTech 500, ranking 15th globally
- Strategic relationship in Food Service & Retail
- Academic R&D partnerships with Cambridge Uni, NTU & Alan Turing Institute
- Reduced growing days by up to 50% & increased average yields by 20%
- Licensing 5 years of valuable proprietary growing data
- Plans in place to launch a global hair care line with a cosmetics brand
- Achieved a CAGR of 76% between 2017-20 (Rev FY19/20 £448k P&L -£1,042k)
- Supplied 274,863 units of fresh produce in FY 19/20
- “We're raising funds to build a 2nd farm on a new site, automate key processes (allowing us to reduce production labour time by 44%) & invest in further yield improving technologies.”
The campaign is already fully funded and is now moving into over funding. AgTech and Foodtech projects are proving hugely popular on crowdfunding platforms, and a pre-money valuation of £11m in this space, though a little eye popping given current revenues, isn’t especially egregious. We think that the market has only just woken up to the potential for AgTech innovations and thus we’d expect to see a constant flow of projects like this over the next few years.