Agritecture, LLC, an urban farming consulting and digital services firm, announced it has partnered with Harvest Returns, an agriculture investing platform.
The two companies will work together to accelerate the urban farming and controlled environment agriculture (CEA) industry across the country by offering new entrepreneurs a more accessible way to raise capital. This type of farming can reduce the environmental impact of the food system and increase local food security.
“The COVID-19 pandemic has revealed the fragility of centralized food production,” said Chris Rawley, CEO of Harvest Returns. “Developing additional indoor farms will distribute growing operations closer to where food is consumed, creating a more resilient food system.”
In 2020, the USDA offered the availability of only $3M in grants for urban agriculture and innovative production. Agritecture notes that the average CapEx, or startup cost, for controlled environment farms modeled via their Agritecture Designer digital platform is $512,000, and nearly one-third are over $1M.
“Since our founding in 2014, we’ve seen sustained, year-over-year growth in interest toward urban agriculture, especially amongst industry newcomers,” said Henry Gordon-Smith, Founder and CEO of Agritecture.
This growth has only accelerated since the onset of the pandemic, according to the team at Agritecture, which reported nearly a 2x increase in website traffic since Q1 of 2020.
“Despite this increasing interest and the record levels of funding for the handful of indoor mega farms, financing continues to be one of the primary challenges for small and medium-scale CEA businesses,” Gordon-Smith notes. “Yet, we know these farms can achieve profitability with competitive payback periods, while still serving their local markets and communities.”
Gordon-Smith cites Agritecture’s 2019 and 2020 Global CEA Census Reports, produced alongside agtech solutions provider Autogrow, which show that nearly half of all CEA facilities are being started by those with no previous farming experience. Furthermore, per their recent census, 78 percent of CEA business founders who attempted to raise money were unsuccessful in doing so through traditional financing sources, such as banks.
“By teaming up with Harvest Returns and their innovative financing platform, we can now deliver a direct link from our planning services and digital platform, Agritecture Designer, to funding opportunities for these smaller-scale facilities,” added Gordon-Smith.
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