In July of this year, Japan’s richest man, Sunsoft’s Softbank Vision Fund, ignited a $200 million B-round financing for Plenty, an agricultural technology company based in South San Francisco, California. .
The richest man originally planned to give Plenty's founder, Matt Barnard, 15 minutes, but did not expect that the final meeting time was more than 45 minutes. Two weeks later, the investment was finalized.
Why can a company engaged in agriculture so quickly attract Sun Zhengyi’s heavy money? Later, Sun Zheng issued a statement saying that he believes that the company has the potential to help increase crop yields around large cities, transforming the current food system and improving the quality of human life.
Plenty, an agricultural technology company that specializes in indoor vertical farms, is headquartered in San Francisco, California. Their vegetables and fruits grow from the side of the planting tower, not from the land. The special appearance of the planting tower was such that when Sun Zhengyi first saw the tower unloading from the car, it was slightly confused.
With the vision of investing, Plenty hopes to start from Silicon Valley, the world's top technology, to the metropolitan area of ​​more than 1 million permanent residents around the world, such as China, Japan, and the Middle East. In less than 30 days, 500 such farms were established: less than 1% of the land, 1% of the water, only synthetic fertilizer, no pesticides, the most fresh and best agricultural products.
Vertical farm fire
Vertical farms, with the entire agricultural technology (Agtech).
In 2015, investors invested 4.6 billion U.S. dollars in agricultural science and technology and more than 3.2 billion U.S. dollars in 2016. In the first half of 2017 alone, the initial financing of agricultural technology startups was close to the total amount in 2015, reaching 4.4 billion U.S. dollars. 6%.
The new agricultural system, represented by vertical farms, raised $198 million during the first half of 2017, an increase of 560% year-on-year. This is not the $200 million that Plenty has invested in. According to the current situation, it is estimated that by 2022, the market value of only one category of vertical agriculture is expected to exceed US$6 billion.
In fact, vertical farms are not a concept that has only recently existed.
As early as 1999, Dickson Despommier, a professor of environmental health sciences and microbiology at Columbia University, along with his graduate students, wanted to use the roof garden to provide food for the Manhattan population of New York (about 2 million people). But after calculation, it was found that the 13-acre roof probably only served 2% of the population's food. As a result, Professor Dickson turned to indoor vertical cultivation plants. By 2001, the vertical farm had the first outline.
As a staunch supporter of vertical farms, Professor Dickson believes that the emergence of vertical farms will no longer require farmers to worry about whether this year is a drought or flood, whether there are pests in the soil, whether there is a shortage of water, whether food is contaminated, and whether nutrition is sufficient. Waiting for a number of problems, vertical farms will not completely replace traditional outdoor agriculture, but it will feed our 21st century.
Plenty, which has just received a fund investment from Softbank, was founded in 2014 and is said to produce 350 times more.
In addition to the United States, Japan is the country that has tried the most on vertical farms.
In fact, countries such as the Middle East and Africa, which are highly dehydrated and dry, and Russia, which is always cold and unsuitable for growing vegetables, have already made efforts or have vertical farm technology.
Come over: choose not to "position" will die
Of course, under such a hot trend, many people have fallen on the way.
For example, Farmedhere, located in Chicago, was established in 2010. It was once the largest indoor farm in the United States and is expected to expand throughout the United States. However, it was declared closed in January this year. In August this year, it announced that it would turn to Kentucky to re-invest in the factory.
An important factor in the death of Farmedhere has been the cost of LED lighting. Imagine that seven years ago, if you need to buy the same number of LED lights, the cost would be 64 times higher.
However, lighting and lighting costs are not the primary cause of failure. The three vertical farms that failed or re-entered all mentioned one word: location, and the important words were said three times: location, location, location. The three "positions" behind are actually three important issues. If they are not done, the failure of vertical farms is not far off.
Behind the first "location" is actually: who planted the vegetables, for whom. In other words, if you can't sell them, then you shouldn't let them grow up. "Sell good food, the rest are second."
In the view of Andy Yu, vice president of GGV Jiyuan Capital, this is a word: "sales by sales", can not be produced and can not be sold, the retention period of agricultural products is very short. Vertical farms, or that such refined greenhouse agriculture, whether in China and the United States, can finally win, must be "double skills" to win. In addition to the "production skills" to win, for example, how many times the amount of production can be achieved technically, "sales ability" is very important.
The second "location" problem is that when you know who to sell, you should make the farm produce as close as possible to the demand side, thus shortening the supply chain.
Like PodPonics, which declared bankruptcy, although they say the final cost can be $1.36/lb, much lower than the cost of transporting vegetables over long distances in California. However, its supply chain has also had problems.
PodPonics chose to produce vegetables for local restaurants, but they also worked with wholesalers and distributors, so the produce went through the warehouse of the wholesaler and back to the restaurants on the street. The founder looked back and thought that this is actually the need to adjust the warehouse address, "not as close as the consumer, but close to the demand side, such as distributors."
The third "location" is to consider the supply capacity of the site, which is related to the ability of the site to support a large amount of power under various heating, ventilation and disinfection equipment problems.
Cost analysis: equipment + hydropower + labor
Once the city is selected as the main battlefield, how should the cost of the vertical farm be calculated?
According to Dr. Toyoki Kozai's data, in the Japanese market, 20%-25% of the production cost per ton of vegetables is the cost of electricity, including lighting, air conditioning, ventilation, water pump and other costs. But this is not the highest, the highest cost is the depreciation rate of equipment investment and plant in the early stage, accounting for 30%-35% of the total cost. These two parts add up to more than half of the total cost.
But overall, the cost of electricity is bound to be lower and lower. According to the US Energy Information Administration report, LED lighting efficiency has increased by about 50% from 2012 to 2014 alone. By 2020, due to the cost reduction, it may climb another 50%. Aero Farms hired the former chief technology officer of LED Lighting to help design custom LED lighting systems, hoping to improve lighting efficiency.
What is the cost of the remaining half? In developed countries such as Europe, America and Japan, labor costs are inevitable. Dr. Toyoki Kozai has revealed in the book that the labor costs of such factories in Japan account for 25%, because you need very high skills (knowledge, experience, etc.) to manage people on vertical farms. The last 20% is made up of seeds, fertilizers, packaging, and transportation.
In other words, if a vertical farm is to be launched in the Chinese market, once the supply of technology is feasible, both land and labor costs will have an advantage, lower than that of developed countries.
Andy has seen similar projects in China. He believes that the essence of vertical farms is the improvement of production efficiency. From the perspective of technology supply, technology is relatively mature. In terms of cost, if it is a 3,000 square meter factory, the initial investment will cost about 25 million yuan. Even in the vicinity of big cities, the cost of land lease is not high, about 1.5 million, and the annual water and electricity fee is also about 1.5 million. That is to say, in China, the cost of electricity plus land only accounts for 10%.
Price: Become another "organic food"
Although the initial investment in electricity and hardware facilities accounts for more than half of the total investment, it is foreseeable that the hardware costs of vertical farms will decline year by year. Will the Chinese market emerge as a big player in vertical farms in the current three or five years?
Andy believes that the ability to compete for quality and sales is important for big players.
From the point of view of sales channels, several important players in the world are nothing more than cooperation with supermarkets, restaurants or wholesalers. Like Aero Farms, it has partnered with Whole Foods near New York State, as well as supermarket chains such as ShopRite and Freshdirect, where consumers can buy their own brands of vegetables.
Bloomberg reported that Plenty is meeting with officials from 15 governments on four continents, as well as executives from Wal-Mart and Amazon. He wants to sell the vegetables, the quality of the whole food, and the price of Wal-Mart.
There is no doubt that price is another key factor affecting sales.
For vertical farms, this is the best time and the worst.
As the head of Softbank, Sun Zhengyi chose vertical farms when he first bet on a startup that was designed to subvert the traditional agricultural industry. This is the luck of vertical farms. However, once the overall technology matures and the influx of capital, who can survive in the consumer market, there is still a round of testing and a fierce battle.
But in the end, humans and cities are always lucky. Rather than saying that Sun Justice is optimistic about the vision of the Plenty family, it is better to say that they are optimistic about the vision of a vertical farm. After all, some people are working hard to reshape the current food system.
Small computer system interface (SCSI) is an independent processor standard for system level interfaces between computers and intelligent devices (hard disks, floppy drives, optical drives, printers, scanners, etc.). SCSI is an intelligent universal interface standard.
HPCNS SCSI Section
ShenZhen Antenk Electronics Co,Ltd , https://www.antenkelec.com