April 25, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Saudi Arabian agtech startup Red Sea Farms announced it has raised $18.5 million in strategic growth capital in support of its one-of-a-kind technology that enables commercial scale farming using a sustainable low energy, zero freshwater, climate-controlled model. 

This round, which brings total funding to-date for the company to $36.5 million, follows just about a year after the company raised $10 million in June 2021. One of the co-leaders of that round was Wa’ad, the entrepreneurship arm of Saudi Aramco, that returned to lead this round as well. Co-leading the round with Wa’ad was the Savola Group, the leading strategic investment holding group in MENA food and retail. 

Also participating in the round was KAUST Innovation Fund, one of the original investors in Red Sea Farms, and OlsonUbben LLC, an investment vehicle owned by Tony Olson, natural product industry advocate and CEO of wellness-focused data company SPINS, and Jeffrey Ubben, the founder and managing partner of Inclusive Capital Partners and pioneering impact investor.

“We are delighted to complete this $18.5 million fund raise and build on our impressive start to 2022. To have such esteemed investors believe in our vision is hugely validating and testament to our business model and strategy,” said Ryan Lefers, CEO, Red Sea Farms.

Red Sea Farms was launched in 2018 with a mission to reduce food insecurity, the carbon footprint, and water usage in both the Gulf and global food systems.

Using a patented system of cutting-edge, more efficient solar and growth monitoring technologies, Red Sea Farms replaces the fresh water typically used to cool greenhouses and irrigate crops with salt water, cutting fresh water consumption by as much as 95 percent.

Combining impact with innovation, Red Sea Farms links precision climate control, plant science, and AI-enabled systems to support the sustainable production of food in water-scare and climatically harsh regions such as the Middle East, where conventional food production is neither cost-effective, or in many cases, even possible.

Although advances in technology resulted in an increase in food production in the MENA region in the 1990s, the region was expected to see a food deficit of between 50 million tons and 90 million tons in 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 as much as 85 percent of its fresh produce and therefore presents an arena of great potential growth.

Red Sea Farms’ system saves 300 liters of water per kilogram of produce by using saltwater for evaporative cooling, liquid desiccants for night chilling, solar-integrated fan systems, and energy saving and electricity-generating films.

The company also employs tech-driven breeding programs and non-GMO biotechnology to deliver seeds and seedlings for crops that are salt, heat, and drought-tolerant and able to serve agricultural production under harsh conditions or in areas where water may be brackish, for example. 

Recently, the company completed a new commercial scale 6-hectare technology retrofit site near Riyadh, KSA, and an R&D facility at the King Abdullah University of Science and Technology in Thuwal, KSA, where results are being delivered that are exceeding expectations.

In January of this year, Red Sea Farms expanded into the U.S., bringing its technology to the University of Arizona College of Agriculture and Life Sciences’ Controlled Environment Agriculture Center (UA-CEAC) where it will be evaluated for its potential to conserve resources and to produce crops in areas of limited resources. 

“Many parts of the U.S. are water-scarce with seasonal harsh climates, making it a challenge to grow fresh produce year-round,” said Lefers. “However, the break-through technologies Red Sea Farms has created could help address the reliance on freshwater consumption in food production and improve food security. We are looking forward to working with the University of Arizona on this important subject.” 

Currently, the company is also building an indoor farm to provide sustainably produced food to guests at The Red Sea Project with the goal of being a main supplier to the luxury destination resort.

“Red Sea Farms has developed a truly innovative and sustainable business model that not only addresses a global issue around food security and limited agricultural resources, but one that is also regionally relevant,” said Fahad Alidi, managing director, Wa’ad. “Wa’ed is proud to be one of the early supporters to back the pioneering team at Red Sea Farms as they tackle an emerging Agtech industry with decades long interdisciplinary research.”

As the company continues to surpass expectations, it has also announced the appointment of a new global COO and regional CEO for the Middle East, Simon Roopchand.

Red Sea Farms noted that its intentions are to leverage Roopchand’s former experience as CEO with Lorne Stewart, and his proven track record in leading strategic growth to seize the massive opportunities presented in the MENA region for this technology. 

“We’re excited to continue on our mission to address the reliance on freshwater consumption in food production and improve food security with their support and guidance,” said Lefers. “The appointment of Simon Roopchand as COO and regional CEO for the Middle East is another key milestone cementing our position as an innovative market leader and maximizing our impact across the region.”

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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