UAE-Based Agritech Firm Pure Harvest Smart Farms Raises US$180.5 Million To Scale Up Growth In New Markets
Pure Harvest co-founder and CEO Sky Kurtz believes the latest infusion of capital will enable his firm to scale globally, while also addressing challenges related to food security, food supply chains, and sustainability.
UAE-based agritech firm Pure Harvest Smart Farms has raised US$180.5 million in a funding round that has been pegged as the largest convertible financing in the Middle East, Africa, and South Asia (MEASA) region.
The round saw the involvement of global investors such as UK-based pan-European private capital fund advisor Metric Capital Partners, Korean investment firm IMM Investment Corp, as well as KSA-headquartered multinational enterprise Olayan Group.
Launched in 2016, Pure Harvest has made its mark in the Middle East's agricultural sector through its sustainable agriculture initiatives, including building greenhouses to grow year-round, pesticide-free, fresh fruits and vegetables. With this new round, the firm has raised a total of $387.1 million in funds so far, and it is now looking to scale its services into other parts of the GCC and the wider Asian region, as well as to further invest into its research and development endeavors.
For Sky Kurtz, co-founder and CEO of Pure Harvest, this fresh influx of capital has provided greater impetus for working towards issues related to food security and sustainability. "Across the globe, food security is a huge priority in light of the war in Ukraine, the aftermath of the COVID-19 crisis, and, generally, just the awareness of the need to localize food production," Kurtz said in an exclusive interview with Entrepreneur Middle East. "This is leading to a lot of support from governments, from investors, and a strong focus on food security globally. The continued shocks and the issues in food supply chains will continue, and at Pure Harvest, we see this as a big challenge. The capital we have just raised will allow us to build capacity to help to serve our markets better, and to enter new markets that have similar needs."
Source: Pure Harvest
Kurtz's observations reflect, quite accurately, the reality of the global food security crisis at the moment. A June 2022 report by the World Bank has shown that close to 193 million people globally suffer from food insecurity. Another study by the World Economic Forum shows that the coronavirus pandemic, political conflict and climate change are among the main drivers that have led to food insecurity issues.
This would explain why Kurtz remains laser-focused on ensuring that Pure Harvest's next phase of growth contributes towards more sustainable agritech practices. "There is now a huge focus on reducing the carbon footprint of both food production and food distribution, and getting it to the point of consumption," Kurtz added. "That's an area that is also driving investment, and a lot of activity/collaboration among companies supporting it."
For Kurtz, this journey towards greater sustainability becomes especially significant when you take into account Pure Harvest's expansion plans from this point forth. As an agritech firm that has quickly mastered and implemented the science of hydroponic farming (a chemical-free agriculture technique that requires no soil but only the use of water-based mineral nutrients) in the dry and sweltering UAE terrain, Kurtz now hopes to recreate the model in other parts of Asia as well.
"Looking at Asia, we see huge opportunities because these are hot, humid markets that have import dependency either seasonally or year round," Kurtz explained. "Asia, as a whole, has a significant food dependence on China for their fruit and vegetables. However, in the long term, that may not be viable, due to geopolitical issues, but also China's own food demand and water availability. That puts into question the availability of that fresh produce and whether it's a sustainable food security strategy for these nations. That makes Asia attractive as a whole for us!"
The CEO went on to say that the countries Pure Harvest aims to immediately target include Singapore, Malaysia, Indonesia, Korea, and the Philippines. "These are representative nations with big populations, improving demographics, and with food insecurity, where locals would benefit from year round, sustainable, clean and safe production that would add a lot of value to their markets," Kurtz said.
Source: Pure Harvest
It is worth stating, then, that the key investors that partook in Pure Harvest's latest funding round seem to be deeply aligned with the agritech firm's vision. "With Pure Harvest, we saw a complementary solution that let us double-down on an investment thesis that we continue to believe in, and that tangibly contributes to global food security, water conservation, economic diversification, and sustainability objectives," said Hyun-Chan Cho, Partner at IMM. Previously, IMM had also announced an initial $50 million investment in Pure Harvest in October 2021. "We are proud to actively support Pure Harvest as it brings its solution to Asian markets," Cho added.
A spokesperson for Olayan Group also expresses similar sentiments, adding, "Pure Harvest's character aligns closely to our own: they saw an impending global food security crisis, and have taken an important step to solve it. The climate and water challenges Pure Harvest works to overcome are vital to the global economy, and it has proven its ability to deliver incredibly high-quality, safe, sustainable products at affordable prices, and they've shown an openness to partner with others to achieve their mission. I believe this funding will allow them to unleash significant potential, and to meet growing food demands in many new markets."
As the Pure Harvest team now sets out to realize its scaling and expansion goals, Kurtz remains cautious about the nature of the path ahead. "Scalability is a challenge in agritech businesses globally," he said. "We have a supply chain that's all over the world, that we need to increasingly consolidate and make more sophisticated - in the elements and components that we integrate to deliver our farms, but also in constructing them. Every time we enter a new market, we have to qualify and develop a local service base to support the construction and build-out. Scale and this new capital will help us to tackle those challenges, and to go into more markets at once, and really shorten the ideation to completion cycle of builds. Not needing tiny pilots, but being able to build significant projects in the first build itself, as we enter these new markets, is what I think will let us have a greater ultimate impact."
'TREP TALK: Tips for entrepreneurs from Pure Harvest co-founder and CEO Sky Kurtz
Pay attention to optimism bias "We tend to think things will happen easier and faster than they actually do, and that they will cost less. For example, I would advise to over-budget your raise- if you think you're going to need a million dollars, go after $1.25 million. Make sure you have a bit of padding, because your optimism can hurt, you can be very close to your goal right when you run out of capital or run out of time. Plan ahead with some buffer and contingency, so you can be in a better position to absorb the inevitable challenge, delay the unexpected, etc."
If you don't know what you don't know, then get advisors "Ultimately, if you don't know what you need, you're going to struggle to identify some very costly lessons that advisors can help you to solve, and to make sure that you recruit and build the right team to deliver your plan. Your job is to go get them, but if you don't know what you require, you need to get help from somebody who has a lot more experience and professional knowledge to help you to make those decisions. And that's having humility and acknowledging that you don't know everything."
Don't make commitments, you won't deliver as you lose credibility and trust "Make sure that you're reasonable about what you believe you can achieve. Of course, you need to have a vision about where you're going with your business, but my advice is to make sure that you focus on authenticity and credibility, and the commitment you make. Then work, and do whatever it takes to deliver those commitments, especially early on in your journey."