UAE-Based Greenhouse Farming Startup Closes $4.5M Seed Round
November 16, 2017
UAE-based, agtech-enabled arid climate agribusiness Pure Harvest Smart Farms (Pure Harvest) announced it has closed on $4.5 million in seed funding through a round led by Shorooq Investments, and that included a leading federal government-backed fund, technology partners of the company, and a consortium of globally diverse angel investors.
Co-founded by Silicon Valley private equity investor Sky Kurtz and his Emirati business partner Mahmound Adi, Pure Harvest raised $1.1 million in October of last year to begin building up to the launch of the Emirate’s first high-tech, commercial scale greenhouse operation for the year-round production of tomatoes.
The capital raised will be used to fund the construction of the company’s inaugural 3.3 acre high-tech, fully climate controlled greenhouse production facility in Nahel in the United Arab Emirates (UAE), which is expected to be completed by mid-2018, and to have produce hit the market in the second half of next year.
The closing of the round represents the largest seed round ever raised in the MENA region, however, Sky Kurtz told Gulf News that there is potential for the round to expand.
“We look to upsize the seed investment round as we have commitments for $4.8 million and more,” he said.
Concurrent with the announcement of the closing of its seed round, Pure Harvest also announced the appointment of a new advisor and kingdom of Saudi Arabia local partner: Sultan bin Khalid al Saud.
“Sultan is a fellow Stanford Graduate School of Business alumnus and is a trusted advisor who brings a wealth of experience to the Company, having worked for Saudi Aramco, McKinsey, and Passport Capital. He will be working closely with the Company to enable near-term expansion into the attractive Saudi market,” said Kurtz.
Reversal and Diversification
Although advances in technology resulted in an increase in food production in the MENA region in the 1990s, the region is still expected to see a food deficit of between 50 million tons and 90 million tons by 2020. As a result, indoor vegetable production in the Middle East region has been gaining traction with both investors and startups. This is notably true in the UAE, which currently imports 80 percent of its fresh produce and therefore presents an arena of great potential growth.
“We believe that we can transform the Middle East agriculture sector with a highly scalable business. We expect the produce to be sold directly to the market and not to distributors. We can bring the cost down and bring the ability and affordability of premium quality fresh produce,” said Kurtz.
Not only can such high-tech systems reverse the water withdrawal connected with traditional agricultural production, it can also create possible export opportunities for the region while adding a measure of diversification to widely oil-dependent economies.
“Shorooq Investments is thrilled to see Pure Harvest closing the largest Seed financing to-date in the MENA region. When evaluating investment opportunities, we try to think from a broader regional & macro perspective and to create a positive social impact,” said Mahmoud Adi, co-founder at Pure Harvest and the Founding Partner of Shorooq Investments. “With Pure Harvest, we hope to address food security concerns and to take a giant step forward to be less dependent on international imports for fresh produce, which will directly contribute to the UAE’s long-term sustainability.”
Shorooq has been an early investor in Pure Harvest, having committed $1.1 million to the company in October 2016.
These sentiments were echoed by David Scott, a well-known economic and strategy advisor to regional governments and state-owned enterprises who also was a participant in both of Pure Harvest’s pre-Seed and Seed rounds.
“Pure Harvest’s tech-enabled approach to arid climate agriculture and its strong project team offer a realistic and much-needed solution for improving food security across the Gulf, as well as a means not just to maintain domestic agriculture, but to profitably expand it – all while preserving the region’s precious remaining fresh water aquifers,” said Scott. “Ultimately, I see this kind of sustainable domestic agriculture as a critical component of any successful post-oil diversification strategy and I’m excited to be a part of this effort.”
Proof is in the Produce
Kurtz commented that the closing of this round will now enable Pure Harvest to scale up its operation, which will not only provide an ecological benefit to the region, but will also grow fresh produce at a lower price than their equivalent imports.
“This financing is an important milestone for the Company,” said Kurtz. “We now have sufficient capital to deploy our solution on a commercial scale and to demonstrate to our many stakeholders a future where high quality, sustainably grown, fresh local produce can be abundantly available every single day… and at a lower cost & environmental impact than current imports. We are humbled that such an esteemed group of investors, advisors and partners share our vision and are willing to back us to transform food production in the Middle East.”
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