Startup Agtech Source.ag announced today that it has raised a $10 million investment to make greenhouses smarter. The founders have set their eyes on a horizon where, driven by climate change and a rapid increase in global food demand as the population continues to grow, more crops are being forced indoors to ensure better yields. You wouldn’t believe the amount of restraint it takes to not make a start-up funding pun in an article about greenhouses. I have no such restraint, so let’s report on this, ahem, growing industry.
The $10 million funding round was led by Acre Venture Partners, with participation from E14 fund and food venture firm Astanor ventures. The company has also been formed by industry insiders including international association of (mostly) salad growers Harvest House, tomato specialists Agrocare and pepper specialists Rainbow Growers.
The company is developing software to enable greenhouses to become smarter. The company says greenhouse farming is a safer, more reliable and climate-resilient way of producing food, producing yields up to 15 times higher, using one-twentieth more water than agriculture traditional. What Source adds to the mix is the ability to use data and AI to help greenhouses operate at even higher levels of efficiency and high-yield harvest repeatability.
“Climate change is causing substantial scarcity and strain in our global food supply. As this accelerates in the coming years, we must find ways to scale effective growth solutions that lighten the footprint of agriculture,” said Lucas Mann, Managing Partner at Acre. “Greenhouse farming is a proven and viable solution, but without innovation the demand will be impossible to meet. We believe Source.ag can play a vital role in driving its global scalability. »
The funding will be used to accelerate product development and expand commercial collaborations.
“Greenhouses come in all forms, more or less technically advanced. On the high-tech side, you want to control every dimension you can imagine, including humidity, irrigation, and nutrition. Tomatoes, for example, do not grow in the ground. They go in substrate slabs. This means that these operations are independent of arable land,” says Rien Kamman, co-founder and CEO of Source. “Because you have more control, you will have to make more decisions every day. Growers make decisions on 60-70 parameters every day, which influence the growth of this crop for the rest of the season. You have to make the right decision every day. This can include what to feed the plant, plant-specific parameters, size, etc. It really is a job and that’s why it’s always so difficult. It takes decades of experience to be successful in this field.
The complexity of farming itself is beyond doubt, and Source’s argument is to take all of these growth parameters, combine them with historical data on crop yields and market prices, etc. , to create a better experience for producers.
“Our system has two aspects. One is a recommendation system that rates the current state of the plant. It looks at forward-looking predictors like resource prices, weather, etc. And then gives very concrete recommendations to the producer. What do you need to do today and tomorrow, both on the plant (how to prune it, prune it, etc.) and on the indoor climate around the plants to maximize sustainability and production. The second part is what happens when something doesn’t go as planned? This is where the algorithms come in,” says Kamman. “They are working with the various control systems to adopt this strategy and ensure that it is implemented in the most efficient way possible.”
Indoor farming still requires a good deal of manual labor, especially for large vine crops such as tomatoes, cucumbers, peppers, etc. ; but Source suggests it can be useful there too – by choosing how and where to prune or how many crops to let ripen on the vine, you can affect various aspects of plant growth. The interesting thing is to overlay the real-time price data here – by speeding up or slowing down the ripening, I can imagine this could potentially time the time of harvest when your competitors have ripe produce, potentially even trading lower yields against better prices, or working with temperatures and weather conditions to reduce production costs, for example.
The company operates on a SaaS model, charging growers on a sliding scale based on the amount of space they use for cultivation.
“Our belief is that agriculture is at a turning point in history. [Farming] that got us to where we are today will not get us to 10 billion people with a more changeable extreme climate. This is a huge market – the need for climate-resilient food systems will increase. And then we haven’t even talked about the other traditional agricultural crops that might be moved inland over the next few decades,” says Kamman. “I think what unites our investors and our team is that we’re not looking so much for these short-term benefits, but we can develop globally scalable insights.”
The company declined to share screenshots of its product, saying it was “competition-sensitive”.