Element Farms synced with Wefunder in order to grow its agtech business. At this writing, the startup has surpassed its minimum goal as has raised more than $196,993 of its $500,000 maximum target for a convertible note from 183+ investors in order to harvest a share of the $8B+ spent on leafy greens each year. Funding will be used to purchase new equipment costs and for expansion, and reach its future goals of serving at least 16 of the most densely populated urban areas in the US, acquiring 2% of the $8B total fresh leafy greens market, and moving into other fruits and vegetables.
Lead by Founder and CEO Serdar Mizrakci, NY-based Element Farms is reportedly the first to produce year-round pesticide-free spinach. The company has successfully grown from one retailer shelf to 12 high-end retailer shelves in 6 months.
“We’re working toward a future where perfect produce is grown within 100 miles of our customers–and without pesticides or GMOs. We plan to use investor funds to equip existing greenhouses near urban areas with our proprietary technology and the knowhow for growing sustainable, hydroponic greens,” shared Element Farms on its campaign. “Eventually, our goal is to build our own one-acre Element Farms greenhouses that will create job opportunities in local communities and, most important, provide more people with access to fresh produce.”
Element Farm’s PureSpinach uses 90% less water and yields 20x more greens per sq ft than conventional farming. The startup also touts its spinach’s short growth cycle — 14 days vs. 30-day industry standard and ensures 24-hour delivery from farm to shelves. Element Farms, which avoids supply chain interruptions with its more precise hydroponic farming methods, indicated on Wefunder that its current demand exceeds our supply and funds raised will be used to increase supply.
The team has also worked with researchers at Cornell University (Mizrakci and fellow Co-founder Danny Janeczko’s alma mater) to compare multiple brands of field-grown organic spinach with its hydroponically grown spinach:
“The results were astounding: our produce was shown to be consistently higher in essential micronutrients like magnesium, iron, and zinc and significantly lower in heavy metals like cadmium and copper as well as sodium. (Heavy metal content in fresh produce is not currently regulated by the USDA, but some recent studies showed that organic leafy greens in the American market had heavy metal content exceeding European Union standards. The results of these studies have been presented in several industry meetings and a more comprehensive study is under consideration),” discussed Mizrakci in the Q&A. “Our higher-nutrient spinach and other leafy greens are also grown close to our consumers, so they won’t lose nutrients in transport. Organic leafy greens from California often travel about six days before reaching consumers, losing a considerable portion of their nutrients along the way.”
What’s the current status of Element Farms?
“Our sales for November 2018 were $14,869 – about 6% above our projections. We expect our revenues to stay at the same level in the next few months and start increasing again in April after we sign our lease for additional production space and begin capital expenditures. Our current monthly cash burn is stable around $15k, which includes CEO and CTO salaries,” Mizrakci explained in the Wefunder Q&A. “In the 6-months following capital injection we are planning to spend $320k on equipment and building expenses; simultaneously we will be ramping up production and subsequently be decreasing net working capital through fiscal 2019. We have projected to hit $70k in monthly recurring revenue by November and become cash-flow positive, after which we will be increasing our net working capital. This would trigger a ramp up in our efforts to developing a new company-owned production facility of with higher capacity with availability to keep expanding until we can saturate our market. Timeline for the new facility would likely be 14 to 20 months from today; we are currently in the process of scouting suitable land for the project.”
The campaign does offer some investor perks, including a large gift box of assorted produce at the $1,000+ level, three large gift boxes of assorted produce at the $5,000+ level and a facility and greenhouse tour with a $10,000+ investment. For more campaign details, click here.
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