STARTUPS

Agriculture moves downtown

Multi-storey residential developments, low-rise neighborhoods, summer cottages, roads, and stores are mushrooming everywhere, quickly expanding to take the place of forests, gardens and meadows. The number of people is growing; fields suitable for growing vegetables are shrinking.

“If we continue to grow food in the traditional way, we will soon run out of land,” believes Alexander Lyskovsky, CEO and co-founder of iFarm, a company that designs and builds vertical farms.

A vertical farming system is an automated indoor farm that looks like a multi-level, weather-independent greenhouse, where special lamps substitute for the sunlight that plants need. A vertical farm can easily be built in the urban environment (independent of the local climate), for example, vertically stacked layers can be housed inside a former industrial facility – technologies such as air purification and ionization systems, hydroponic and irrigation allow growing environmentally friendly products even in polluted industrial areas.

What are the advantages of lettuce and strawberries from vertical farming systems? What does it take to start an urban farm? How can it be profitable for investors, convenient for suppliers, and healthy for consumers?

Gourmet tomatoes

Alexander Lyskovsky earned a degree from IT Department at Novosibirsk State University to become a “serial technological entrepreneur.” He launched the Alawar videogame project, and developed the Welltory health monitoring app (the free version measures your stress levels and energy, while an upgraded one includes an option to ask questions to experts).

Three years ago, Lyskovsky launched a new startup. The project is to grow herbs, vegetables and berries in automated greenhouses.

“I have always preferred multidisciplinary projects where people from different professions combine efforts for a common goal. Ever since I was a child, I have been fond of computers and electronics. At 11, I assembled my first radio-controlled car, and at the age of 14, my first computer, Spectrum. IT is something I know, something I love and can work with. I also love delicious food, cooking and have a passion for gastronomic tourism. iFarm became a business where all these components – multiple areas of expertise, love for information technologies and production of delicious food – were brought together,” wrote Lyskovsky in his blog.

In partnership with Maxim Chizhov (an expert in ITIL, founder of Virtuality Club) and Konstantin Ulianov (CEO of the Green Stroi Group engineering company), Alexander Lyskovsky started developing city farming, a relatively new industry for Russia. Lyskovsky believes you can’t make a truly delicious salad of the tomatoes that came from far away, were kept in a storage facility and only then ended up on store shelves. Like freshly ground coffee, you can’t replace the taste and fragrance of freshly cut greens. Foodies have to look for quality produce by local farmers or grow it themselves.

Business angels to the rescue

The entrepreneurs built the first automated (but not yet vertical) greenhouse in the Novosibirsk Academic Town in 2017. The project cost RUR 3 mio ($40.5K) for which they used personal savings. It turned out that plants can grow quite well without sunlight under LED lighting. The fragrance of wild strawberries seems even stronger when you enter a greenhouse from outside where everything is covered in snow. You can’t stop eating these berries. But how do you improve the output? If plants don’t depend on sunlight why not create multi-level garden beds? Experts claim that vertical farming allows growing eight to ten times more produce than conventional greenhouses.

Initially, the iFarm team included only ten people and the founders had to do a lot of manual work themselves such as hammering in nails and planting wild strawberries. Now the company has over 60 employees and the iFarm vertical farms can be found not only in Russia but also in Finland, Latvia and Lithuania. iFarm Cropper, an herb and greens growing module for supermarkets was launched. The plan is to improve the technology and to build vertical farms in Europe, the CIS and Russia’s Far East. But scaling-up requires money. And investors are happy to provide it.

“Our vertical farms are being built in various regions, the produce is sold in supermarkets and used by chefs in leading restaurants. People are investing in us. In the past three years, the company valuation by venture funds has increased by 12 times. As the moment, three funds (Gagarin Capital Partners, Impulse, IMi.vc) and 12 business angels have invested in iFarm. These people believe in us because we create a product which is in demand on their markets too. For instance, restaurant owner Viktor Agafonov has invested in the company. And he knows everything about purchasing fresh herbs, vegetables and berries from local producers in Novosibirsk, Moscow and London,” Alexander Lyskovsky says.

Vegetables in lockdown

According to Lyskovsky, the global COVID-19 lockdown did good for the business because it showed that the future belongs to city farming. Vertical farming systems allow for growing herbs, vegetables and berries locally, which means that regardless of what happens or what disruptions there can be in transport and logistics chains, products will reach the stores. And they will be fresh.

Localization is an important current trend, Alexander believes. People think about the background of fruit and vegetables they eat. Tomatoes, apples and eggplants often travel hundreds of kilometers losing 70% of their nutrients on the way. In addition, to preserve their marketable condition, they are often treated with chemicals.

“We have more clients now thanks to the lockdown. In iFarm, we have received hundreds of questions from all over the world about autonomous year-round growing of edible plants. People are interested in solutions that allow for growing vegetables, berries and herbs for the family and avoiding contacts with anyone. I have recently seen curious statistics: in the US, the sales of bread makers have soared by six times. Everyone wants to stay local and feel safe and cozy. This trend is having an impact on farming as well; the number of farmers will increase and interest for vertical farming will grow. People are willing to grow food locally; they want to avoid being dependant on imports and deliveries and being affected by pandemics and sanctions. We used to have several bread production plants that distributed their products to shops throughout the city, while today many cafes and shops have their own bakeries, where we can buy fresh bread. The same processes are occurring in farming, with production facilities being relocated closer to consumers,” Lyskovsky says.

Yet, he admits, so far it is economically unprofitable to build a vertical farm on a garden plot. Spending about RUR 1.5 mio ($20.3K) for building automated farming facility to grow tomatoes, strawberries and lettuce for one family is uneconomic; it is easier to buy quality vegetables and berries at a local market. But technologies are ever-changing, and we may soon see more convenient and inexpensive solutions.

“During the three months of the lockdown, we have seen an increased demand for solutions for hyper-local farming on islands and in villages, as well as for growing food indoors. Food security has become an increasingly relevant issue for all of us. Soon we will present a line of home products with the use of our industrial technology. Initially, I thought about autonomous solutions for growing vegetables, berries and greens on Mars; we experimented with growing them in a fully enclosed ecosystem. This year’s events have sped up this process,” Lyskovsky says.

But Mars exploration is still a long way off, while city farming development is what we are observing at the moment. Recently, an indoor vertical farm has been built at the tobacco factory on Kashirskoye Motorway Street in Moscow to grow spearmint, basil, tarragon and other herbs with health benefits, while city colleges have already started enrolling students who will specialize in urban farming.

By Natalia Sysoyeva

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