High-tech farming, hydroponics take root in the Gulf

Controlled-climate agriculture is in vogue – even in places where it doesn’t first come to mind.

Yesterday, Pure Harvest Smart Farms, a start-up based in the United Arab Emirates, secured $4.5 million in an oversubscribed funding round. The company, which produces vine crops in hi-tech, fully climate-controlled greenhouses, says it is “the largest seed investment aimed at making agriculture sustainable in the Gulf.”

The milestone came after a $1.1 million pre-seed funding round led by Abu Dhabi-based Shorooq Investments.

Pure Harvest’s backers include a mix of regional and international capital providers, chief executive Sky Kurtz told Agri Investor. These comprise a government-backed fund, the company’s “technology partners” and a clutch of angel investors. “They are people with whom we already had a relationship, or just financially minded business angels that see the big opportunity,” Kurtz said, noting that their influence in the region would help support growth.

Growing green in the Gulf

The company has a couple of serious competitors, attesting to the attraction of the Gulf’s budding fresh fruit and veg sector. One is Elite Agro, a UAE-based hydroponics specialist. The other is Madar Farms, which turns freight containers into vertical farms (the company buys its containers from Freight Farms, a Boston-based start-up backed by Spark Capital).

Pure Harvest, for its part, says it remains unmatched in the level of investment and technology it is deploying to build its climate-controlled facilities, which it intends to grow incrementally. At the current, “proof-of-concept” stage, the company aims to produce about 450 tons a year. As it raises more capital, however, Kurtz said output could grow quickly. “We’re only utilizing a quarter of the land we own.”

He argued that the Gulf, perhaps counter-intuitively, has promise when it comes to sustainable ag practices. “The UAE is actually one of the most attractive places to grow food in the world, once you solve for climate. We have an abundance of the light natural, we don’t have to use LEDs.”

There is also an abundance of water, though Kurtz said Pure Harvest uses comparatively little of it – about one-seventh of what a greenhouse farm typically uses, and one-32nd of the volume usually needed for field farming. The market’s other advantages include vast amounts of space, no taxes and low-cost labor. In time, the company also plans to power itself through solar power facilities built on the premises.

Fueling growth

Kurtz sees a large market segment the company can seek to address. Local food supply is cheap – partly thanks to subsidies – but it is often of poor quality, he argues. On the other hand, imported high-quality foodstuffs are dear: goods airfreighted from Europe come at a higher price than Pure Harvests’ produce, most of which travel on a truck for less than 100 miles.

Pure Harvest has ambition: in the not-so-long term, it wants to embark on regional expansion. The first port of call will be Saudi Arabia. The company has already appointed Khalid Al Saud, a McKinsey and Saudi Aramco alumnus, as an advisor. How fast that expansion happens, however, will depend on how much capital Pure Harvest can garner in its next fundraising round.

“The goal is to expand as quickly as we can because we think the opportunity is huge. Over 85 percent of the food in the region is imported, and even more at the high-end of the market.”