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From Lisbon to the rest of the world: Expanding a vertical farming franchise network

“On the energy side, we’re not spending as much as others would since we’re hybrid and make use of solar energy. Our microgrid, here at the compound, might be a higher initial expense, but on a five-year plan, it truly makes sense,” says Emiliano Gutiérrez, Co-founder and CEO of Raiz Vertical Farms, a Portuguese agtech. 

Founded by multiple vertical farm enthusiasts, the agtech holds its headquarters in Lisbon, Portugal. Established in a shared art workspace called Arroz Estudios, Raiz is located just outside of the city in the harbor area. 

Lucía Salas and Emiliano Gutiérrez

Scaling up the business plan
The next phase for Raiz is to create an entire community of farms around the Mediterranean part of Europe where a similar climate and market dynamics can be found. “We’ll dive into the Iberian peninsula where they experience similar scarcities in water and food,” Emiliano affirms. 

Raiz is aiming to raise $ 2 million to speed up the process of these network expansions. Emiliano notes, “We can stay humble by just having 3 to 4 farms, but if we want to make a difference, big money is needed to expand the infrastructure, traceability, product mix, know-how, partnerships, etc. Yet, we need to keep operating two to three farms to be able to eventually standardize the farm processes in our network. Ultimately, via word of mouth and incentive mechanisms, we are planning to create network effects.”

As seen left, the shared workspace has some lovely spots to hold events. In the right photo, the names of crowdfunding supporters are written on the farm.

Standardizing the processes to scale
Raiz eventually wants to standardize all the farm manuals, practices, and protocols to avoid difficulties when scaling up in the future in more communities. Not just limiting that to automation but also in terms of packaging and growing recipes. “We want to offer a starter package for new farmers that provides all the information needed. On top of that, we’ll be there step by step to introduce them to vertical farming.”

Long-term Raiz is looking into providing an infrastructure for financing, technology, distribution, and a brand that can be deployed anywhere. Yet, depending on the geographies of a new farm, it would differ to a certain extent. “They’d launch the farm, test the business model that’s been tailor-made for them, and plug in the farm. This model would help to intensely boost the vertical farming network,” Emiliano adds.  

“We’re doing research per market for that purpose, and we’re also investigating what we want to grow. But in general, new farmers really would like to grow vegetables. Adapting to different tasting palettes is a pre before we set up anything,” says Lucía Salas, Co-founder and CMO of Raiz.

Plants ready to grow 

New biodegradable system
Together with another design, the first biodegradable hydroponic system was designed by Raiz, consisting of coffee filaments made of husk. As Emiliano points out, they’ve seen a lot of interest in sustainable systems that are entirely plant-based without any plastics that could end up in their foods.

“Beyond that, conceptually as well, people want more natural goods integrated into production systems. Imagine getting a subscription to a farm where you grow and have a yield of x amount of plants per month. We could help provide the infrastructure for people to buy farm spots. You could also grow for the community, where you could earn some extra money. Eventually, the users would pay us a profit share or user fee. That’s real Farmchising!” Emiliano confirms.  

A concept of the biodegradable system

Increase the level of automation
Lucía let slip that for the next farms, the team will have various smart devices integrated so there is a higher level of independence for each facility. Everyone will have the ability to run the farm by themselves, whereas, from the headquarters, the farms can be controlled as well in case of emergencies. 

Splitting the financing risk
According to Lucía, investors are a bit scared of high CapEx investments, especially in Europe. That’s why Raiz is trying to community-fund farms themselves so that aspiring farmers don’t have to pay €50,000 upfront. Meaning that anyone interested in owning a piece of the farm to their preferred size can become a co-owner. Raiz is working closely with NEAR Protocol and the wider ReFi space to integrate web3 into their ecosystem, unlocking liquidity, scalability, and traceability.  

Portugal: Festive opening of hybrid concept farm in Lisbon

Growing demand in e-commerce 
Emiliano notes, “In terms of supermarkets, we’re not super psyched about going in it with them because of the low margins. So it’s more about reaching final customers with us.” Raiz is preparing a proposal for Uber Eats. As e-groceries are taking off, they want to position Raiz with value-added products like the pesto kits, including aromatics and everything you need to make pesto and other high-value products.

For more information:
Raiz Vertical Farms   

Emiliano Gutiérrez, Co-founder and CEO

Lucia Salas, Co-founder and CMO