Out if its first fund raised in 2018, the firm has backed 29 companies. They include Five, which is building software for autonomous vehicles; Paddle, SaaS for software e-commerce; Pollen, a peer-to-peer marketplace for experiences and travel; and Farewill, which lets users create a will online.
However, what sets Kindred apart from most other seed VCs is its “equitable venture” model that sees the founders it backs get carry in the fund, effectively becoming co-owners of Kindred. Once the VC’s LPs have their investment returned, along with the firm’s partners, the portfolio founders share any subsequent fund profits.
To learn more about Kindred’s investment focus going forward and how its equitable venture model works in practice, I caught up with partners Leila Rastegar Zegna and Chrys Chrysanthou. We also discussed closing deals remotely and how the VC approaches diversity and inclusion.
TechCrunch: Kindred Capital backs seed-stage startups across Europe and in Israel. Can you elaborate a bit more on the fund’s remit, such as sector or specific technologies, and what you look for in founders and startups at such an early stage?
Rastegar Zegna: As a fund, we are very focused on the founder(s), so everything starts there. We try to drill down and get to know them as people and leaders, first and foremost. Do they have what it takes to get the company off the ground, the resilience to get through the inevitable ups and downs of startup life and through the scaling years to make this a massive outcome for the team and the investors?
The second element we spend time thinking about is the market itself and how big the company can grow within the constraints of that market. We also think deeply about the timing of the business, especially if they are trying to create a new market, such as in quantum computing, for example.
Chrysanthou: It’s also worth mentioning that many investors talk about product-market fit, but we are also great believers in founder-market fit. In other words, a founder who might be successful in one market, might well fail in another, as different skills are required and even different personality types might be better suited. One way we assess this is to look for deep insights they have to the problem they’re trying to solve and how they think about their market.
After that, we are fairly sector-agnostic, which is why we have such a diverse portfolio, ranging from consumer products through to deep science.
How has the coronavirus pandemic and resulting lockdowns and social distancing affected the way you source and close deals?
Rastegar Zegna: Initially, we moved everything to video calls, like pretty much everyone else in the industry. Upon reflection, however, we realized that we were just using a new tool (e.g. Zoom) but in the old way — meaning, any meeting we used to have at Kindred HQ, we just transitioned onto Zoom. The interesting transition we’re going through now is to create a new way of working around the tool. That means for some meetings, Zoom will be the most effective medium of communication. For others it may be an audio call, and for a third category of discussion, a walking meeting in the park may be what’s called for. But the opportunity is to throw out the playbook written by inertia and generally accepted industry working norms, and create a first principles approach to the way in which we do business to optimize for the best outcome.
Paired, a new app for couples, is launching today and disclosing $1 million in funding. Backing the startup, which wants to support “happier and healthier” relationships, is Taavet Hinrikus of TransferWise, the co-founders of Runtastic (which was sold to Adidas), Ed Cooke of Memrise and Bernhard Niesner of Busuu.
Founded in September 2019 by Kevin Shanahan and Diego López, who previously worked together at language learning app Memrise, and joined shortly afterwards by Chief Relationships Officer Dr Jacqui Gabb, who is Professor of Sociology and Intimacy at The Open University, Paired combines audio tips from experts with “fun daily questions and quizzes” that partners answer together.
The app has been piloted (and iterated) in Australia for the last six months and is pitched as different to traditional couples therapy, which is often prescribed to couples in distress, in that it is targeting the “full spectrum” of couples who want help building intimacy and improving communication. The idea is that Paired can provide the steps needed by couples to improve their relationship each day.
Available in the Apple App Store and Google Play Store, Paired is free to download but requires a subscription to unlock the full library of content.
“Our relationship with our partner is one of the most important parts of our lives: it affects our physical health, our mental health, and the lives of our children,” says Kevin Shanahan, co-founder and CEO. “However, there aren’t many solutions to help couples keep their relationship healthy. Most are designed for couples in distress”.
Image Credits: Paired
Shanahan says that Paired prompts you and your partner to take “small, positive steps” to improve your relationship. To do this, the startup works with relationship academics and therapists to create quizzes, audio courses, and tips that “help you to learn more about each other, resolve conflict, and build intimacy”.
Experts collaborating with Paired include University of Washington Professor and Married at First Sight USA’s Dr. Pepper Schwartz, University of Exeter academics Mark Rivett and Hannah Sherbersky, and Oakland University Professor and Marriage and Family Therapist Dr. Terri Orbuch.
After downloading Paired, you’re asked if you’d like to pair with your partner to swap answers. To enable this, you’re given a unique code to share. Alternatively, you can choose to pair later or just use the app by yourself.
“Each day we then prompt you to answer either a question or quiz,” explains Shanahan. “These rotate between different areas of your relationship so you can learn which areas are strong and which have room for growth. If you’re paired with your partner, then when they answer the quiz or question you can unlock each other’s answer and discuss them together.
“In parallel, you begin listening to (and will soon be able to read) audio courses and tips that are presented by top relationship academics and therapists. These are on a range of topics — including sex and intimacy, managing conflict, and parenting — and include couple case studies to learn from and exercises to do outside of the app”.
Shanahan describes Paired’s user base as quite broad, made up of new couples, some who have been together for a long time, long-distance couples and people using the app individually. The majority are aged 30-50 and use the app with their partner.
“Each day they typically use the app for about 5 minutes and (based on anecdotal feedback) discuss their answers outside of the app for another 5 minutes or so,” says the Paired CEO.
Blossom Capital, the early-stage venture capital firm founded by Ophelia Brown, has recruited its latest partner: Carmen Alfonso Rico has joined from Samaipata VC, where she led the U.K. office. Before that she was at Felix Capital and is also a co-founder of the London outpost of “community-driven” VC, The Fund.
During her time at Felix Capital and Samaipata, Alfonso Rico is said to have sourced and invested in a number of promising European startups, such as virtual events platform Hopin, food delivery platform Deliveroo, networking app Peanut and D2C stationary brand Papier.
She’s also been an entrepreneur herself, having founded two companies, both with limited success but plenty of learnings. Vinpho was a Spanish crowdsourced journalism platform (you can read the early pitch deck here), and Reconnect was a U.K.-based direct-to-consumer lifestyle and fashion brand for pregnant women.
“It actually came about quite unexpectedly,” Alfonso Rico tells me on a call discussing her latest career move. “Ophelia and I like to joke now that it was almost like generating a deal and when founders are not looking to raise because I was not looking to move at all… We had breakfast and discussed Blossom and I very quickly realised that Blossom was a very, very interesting platform and that it had a lot of the kind of deal-making mindset that I was looking for”.
That’s a partial reference to the firm’s “high conviction” investing pitch, which sees the Series A and sometimes seed investor back fewer companies by writing larger cheques. Alfonso Rico says she was also attracted to the way Blossom is structured, being an all-partner firm where investments are worked on together and one that it isn’t particularly thesis-driven with regards to sectors or geography, unlike much of her previous VC experience. And, of course, there’s Brown’s own ambition.
“I think you know Ophelia [Brown], she is quite bold and very hungry and I think she projects that into Blossom,” says Alfonso Rico. “I immediately got very interested but we did take a lot of time to get to know each other, we spent weeks discussing deals, we spent some time together, actually properly together, to just make sure that there was that personal fit. And at the end, it was kind of an obvious decision”.
Although Blossom’s partner team isn’t “strictly segmented,” in terms of individual focus areas, Alfonso Rico says her investing and entrepreneurial background includes consumer, where she has an established network and some “muscle [memory]” analysing consumer companies, and digital platforms and marketplaces, both B2C and B2B. She’s also long-been obsessed with the “power of communities” and how they can be leveraged to support the success of products and brands regardless of sector.
“Following that customer love, that power of the community, has led me to my best investments, and I plan on continuing down that path,” she adds.
Huboo, the U.K.-headquartered startup that offers an end-to-end fulfilment service for online retailers of all sizes, has raised £14 million in Series A funding.
The round is led by Stride.VC, with participation from Hearst Ventures. Existing investors, including Episode 1, Maersk Growth, Ada Ventures, and True Capital all followed on, bringing Huboo’s funding to £18 million to date.
Launched in November 2017 by Martin Bysh and Paul Dodd after the pair had run a number e-commerce experiments, Huboo aims to solve the fulfilment pain point that most online stores face. Using what it calls a “micro-warehousing” and a vertical software model, the full-stack service promises to store your stock, and then “pick, pack and deliver it” automatically as customer orders are placed.
The Huboo dashboard provides stock control, order tracking and billing information. It is also integrated with third-party sales channels and marketplaces, such as Amazon, eBay and Shopify. This enables Huboo to directly receive and process its customers’ orders in real-time.
The idea is that by “democratising” fulfilment, online shops can focus on the parts of the business where most value is added, such as customer service and choosing which products to develop and/or sell.
“The vast majority of independent retailers are currently moving online,” says Huboo CEO Martin Bysh. “The pandemic has provided the catalyst for a mass shift into multi-channel commerce over the next five years”.
In addition, he says the direct-to-consumer (D2C) “revolution” is rapidly gaining pace, “with a new breed of agile young D2C businesses bypassing conventional retail channels to engage directly with consumers”. At the same time, retail fulfilment is becoming more complex as customers continue to demand faster delivery times.
“The composition of supply chains is changing due to the pandemic, with retailers forced to pay more attention to where they’re sourcing their products and how to build more robust supply chains,” adds Bysh.
To that end, Huboo will use the new funding to support what its CEO describes as three strategic priorities: software development, U.K. expansion, and establishing an on-the-ground European presence as Brexit hardens.
This will see Huboo increase its software development team ten-fold in the next year to further expand the capabilities of its fulfilment software platform. To support client growth, the startup will also be opening a third U.K. warehouse in October 2020 with a fourth warehouse planned to open in January 2021.
Digital currency exchange Coinbase has probably done more than most to push cryptocurrencies closer to the mainstream, earning an $8 billion valuation by private investors along the way. The company is reportedly eyeing a public listing next year, and is inarguably doing a lot of things right. However, that doesn’t mean its product experience is perfect. In fact, far from it.
In our latest UX teardown, with the help of Built for Mars founder and UX expert Peter Ramsey, we highlight some of Coinbase’s biggest user experience failings and offer ways to fix them. Many of these lessons can be applied to other existing digital products or ones you are currently building, including the need to avoid the “Get Started” trap, the importance of providing feedback, why familiarity often wins and other principles.
The ‘Get Started’ trap
Only use CTAs like “get started” or “learn more” if you’re actually teaching users something.
The fail: Coinbase doesn’t actually have any onboarding — but it looks like it does. It has a very prominent “get started” CTA, which actually just puts bitcoins in your basket. This isn’t helping you get started, it’s nothing more than an onboarding Trojan horse.
The fix: It’s simple: Don’t lie in your CTAs. You wouldn’t have “Email Support” as a CTA, and then just show the user a bunch of FAQs.
Steve O’Hear: This feels like another classic “bait and switch” and reeks of dark pattern design. However, what if it actually works to get users over the line and purchase their first bitcoin? Growth hackers, rejoice, no?
Peter Ramsey: You’re absolutely right, this may convert better. From a business point of view, this could be a brilliant little growth hack. However, something converting well doesn’t mean it was a good experience for the user. Look at clickbait-y journalism — it gets more eyeballs, but people aren’t generally happy with what they read.
I’m convinced that in the long term having a great product will perform better than frustrating short-term growth hacks.
As a general rule of thumb, all “states” — e.g., success/failure of an action — need to provide feedback to the user.
The fail: After adding a card, you click “Add Card,” and … it takes you back to the homepage. There’s no notice if it was successful or not. The user has no awareness if the action they were trying to do failed and they need to do it again. This is a real problem with digital products: All feedback needs to be thought of and built.
The fix: During the design phase, consider statuses and what the user will want feedback on. For example, if they’ve just added an item to their “wishlist,” how will you show them that the action was successful?
Caura, a new U.K. startup that aims to take the hassle out of car ownership, is breaking cover today. Founded by Sai Lakshmi, who previously co-founded Echo, the medication management service acquired by LloydsPharmacy owner McKesson, Caura is an iOS app designed to manage all of the vehicle-related admin that car owners endure.
Drivers are on-boarded to Caura by entering their vehicle registration number. They’ll then be able to manage parking, tolls, MOT, road tax, car insurance and congestion charges — a “one-stop shop” app in a similar vain to Echo, perhaps. The idea is that Caura minimises car ownership admin and helps to mitigate associated penalty fines.
“After my girlfriend racked up hundreds of pounds of parking fines, I started doing market research,” explains Lakshmi. “It was clear there was an opportunity to build something in the space that made life easier for drivers — after all, I’d just spent the past seven years thinking about how to make the NHS run smoothly — this should be easy in comparison! I toyed with several different models, including hardware, and after a few pretty direct conversations with some Apple engineering folks, decided to focus on the software platform: it would be more accessible to more people and easier to integrate with private and public services we’d need to interface with if we wanted to be a one-stop shop for your car.”
Lakshmi says that after purchasing his first car that shipped with Apple CarPlay, he was “blown away” by how slick the interface is for entertainment, communication and maps, but also became convinced there was more to be done in this space. “I then thought it would be brilliant to have one single app to add all your vehicle-related payments to streamline the experience, improve vehicle compliance and make paying for parking and the ever-changing digital road landscape simple,” he says.
Image Credits: Caura
Once you’ve downloaded the app and entered your vehicle registration number, you can view the status of your car’s tax, MOT and insurance renewal dates. From the home screen, you can also pay for selected parking, toll roads and congestion charges.
The FCA-approved app integrates with Apple Pay or will safely store payment details, which can be used to pay car charges “in just two clicks.” In-app notifications also remind you when it’s time to pay, with Caura promising to reduce the millions of automated fines or penalty charge notices that are issued to Brits each year.
“There are dozens of platforms that drivers need to manage just one car,” notes Lakshmi. “On a more regular basis, you need a dozen parking apps and other websites to manage your drive. These all have their own log-ins, forms and payment details and the whole experience is a dog’s dinner. There are apps that insist on CVC codes being entered every time you use them and others that insist on SMS messages for reminders, which is so 2000, not 2020. Also, if you get any of this wrong, you get lumped with automated fines.”
Caura can be used for a single vehicle, but can also support multiple registered vehicles, meaning it can potentially scale for fleet managers. An Android version is also promised by the end of the year.
Lakshmi says he and his co-founders — Shaun Foce (director of engineering) and Bhavin Kotecha (chief of staff and finance director) — have already raised £1.4 million for Caura. Backing comes from various unnamed angels, although he says 50% of Caura’s investors have connections to his previous company.
Asked how the startup generates revenue, “Right now, we don’t,” replies the Caura founder. “We’re just passing through these payments to the final provider like congestion charge and parking. Given the seismic shift in investor mindset from crazy growth to building profitable businesses, our long-term business model is most certainly something with sustainable unit economics. It’s currently in the oven and we’re really excited to share more in Q4 2020 later this year.”
Kindred Capital, the London-based VC that backs early-stage founders in Europe, has closed its second seed fund at £81 million.
That’s only a tad larger than the the firm’s first fund, which invested in 29 companies and was raised in 2018. Portfolio companies from fund one include Five, which is building software for autonomous vehicles; Paddle, the SaaS for software e-commerce; Pollen, the peer-to-peer marketplace for experiences and travel; and Farewill, which lets you create a will online.
However, perhaps what really sets Kindred apart from most other seed VCs is its “Equitable Venture”. This sees the founders it backs get carry in the fund, effectively becoming co-owners of Kindred. Once the VC’s LPs have their investment returned, like the firm’s partners, the founders also share any subsequent fund profits, as long as they have passed the vesting period.
More broadly, Kindred says the idea is this extra incentive encourages a collective model, in which founders actively help each other achieve their goals. “This has also had a positive impact on deal flow, with entrepreneurs sourcing 38% of Kindred’s dealflow at the top of the funnel,” says the VC.
Notably, Kindred projects that around £5 million will be returned to founders from the first find, profit that would otherwise have gone to its own General Partners. Presuming those exits are realised, based on two founders per startup, a quick back of the napkin calculation suggests that’s just over £80,000 each.
Meanwhile, Kindred already begun investing from its second fund. It has led 10 seed investments in companies such as BotsAndUs, Gravity Sketch and Beit.
LPs in Fund two include: University of Chicago, Industry Ventures, Generation Ventures, Sands Capital, British Patient Capital, Isomer, and Legal & General. Founders such as Taavet Hinrikus (TransferWise), Carsten Thoma (Hybris), and Rishi Khosla (Oak North), have also invested in Kindred’s second fund.
If venture capitalists could predict the future, why wouldn’t they just start companies themselves? That’s the question Hussein Kanji, founding partner at Hoxton Ventures, asked rhetorically at Disrupt 2020.
“If anyone says that they have predictive power in this industry and says they know where the future is gonna be, I just question the wisdom of this,” he said during a session exploring how VCs seek out new markets before they even exist. “Because if you could figure it out, you could come up with the idea, you’re capable enough to be able to put all the pieces together, why would you not found the business?”
Instead, the key to betting on the future is to learn to ask the stupid questions. “I think it’s actually perfectly fine in the venture industry to not be the smart person and to kind of train yourself to be stupid and ask the stupid questions,” said Kanji. “I think a lot of people are probably too shy to do that. And a lot of people [are] probably too risk averse to then write the check when they don’t really understand exactly what it is that they’re investing into. But a lot of this stuff is a lightbulb moment”.
One of those lightbulb moments was Hoxton Ventures’ investment in Deliveroo, the takeout food delivery service that competes with UberEats and helped turn almost every restaurant into a food delivery service. However, Kanji reminded us that the European unicorn wasn’t the first company to try takeout delivery, but new technology, in the form of cheap smartphones coupled with GPS and routing algorithms, meant the timing was now right.
“People did try delivery,” he said, “they tried it back in the 90s. Everyone forgets about that. There’s a company in New York City called Cosmo that would go off and like get you a pint of ice cream on demand. You know, it never worked because they used pagers. Like, do you remember pagers? Like, that’s how they ran the fleet. They couldn’t move the fleet around. They couldn’t get the driver to the apartment and the driver to the store in any kind of efficient way… The breakthrough for delivery, and for that whole industry, was you had smartphones, you could give smartphones to the drivers, you could track what the driver was doing, which is good because then you could route logistics, you know, with a smartphone… light bulb moment”.
Kanji said that, although they are very different businesses and markets, Hoxton’s two other unicorns, Babylon and Darktrace, involved similar lightbulb moments. Yet you don’t get that light bulb moment until someone walks in the door and explains it to you. “Then your natural question is… why now… what’s actually changed? Like, what makes this so interesting? Why didn’t someone come up with this a year ago? There’s almost always usually a reason for that kind of stuff. And then then the harder part of the job is … are you really picking number one?”
Entering or helping to create new markets is often not without controversy — which both Babylon and Deliveroo has attracted for different reasons. As real disruption inevitably creates societal consequences, it often raises ethical questions that, the Hoxton co-founder argues, aren’t always possible to anticipate early on. However, as the picture becomes clearer, he says VCs should absolutely care, along with, of course, founders and CEOs.
“One of the constant criticisms in the tech industry is, I think the maturity of our industry… we behave more like teenagers. And it’s great to be libertarian, it’s great to be free markets and say markets are gonna sort it out. But you’re gonna have touch points with a lot of other places in society. You’ve got to figure out, and I think, get ahead in terms of…what the impact is going to be, and be more responsible”.
Crista Galli Ventures, a new early-stage health tech fund in Europe, officially launched last week. The firm offers “patient capital” — with only a single LP (the Danish family office IPQ Capital) — and promises to provide portfolio companies with deep healthcare expertise and the extra runway needed to get over regulatory and efficacy hurdles and to the next stage.
The firm has an initial $65 million to deploy and is led by consultant radiologist Dr. Fiona Pathiraja. With offices in London and Copenhagen, it operates as an “evergreen” fund, meaning it doesn’t follow traditional five-year VC fundraising cycles.
In fact, Crista Galli Ventures’ pitch is that traditional venture isn’t well-suited to early-stage health tech where it can take significantly longer to find product-market fit with healthcare practitioners and systems and then become licensed by local regulators.
To dig deeper into this and CGV’s investment remit more generally, I interviewed Pathiraja about what she looks for in health tech founders and startups. We also discussed Crista Galli LABS, which operates alongside the main fund and backs founders from underrepresented backgrounds at the pre-seed stage.
TechCrunch: You describe Crista Galli Ventures (CGV) as an early-stage health tech fund that offers patient capital and backs companies in Europe. In particular, you cite deep tech, digital health and personalised healthcare. Can you elaborate a bit more on the fund’s remit and what you look for in founders and startups at such an early stage?
Dr. Fiona Pathiraja: We like founders with bold ideas and international ambitions. We look for mission-driven founders who believe their companies can make a real and positive impact on the lives of people and patients the world over.
We will look for founders who deeply understand the problem they are trying to tackle from all angles — especially the patient’s perspective, but also that of the clinician and relevant regulators — and we want to see that they are building their solutions to solve this. This means they will make an effort to understand the complex and nuanced healthcare landscape and all the stakeholders in it.
In terms of founder characteristics, in my opinion, the best founders will be mission driven, able to tell a compelling story, and motivate others to join them. Grit and resilience are important and several of our portfolio companies were founded around 6-8 years ago and they are doggedly continuing to build.
Infarm, the vertical farming company that has built a network of urban farms to grow fresh food closer to consumers, has raised $170 million in new investment in a “first close” of a Series C.
Leading the round — which is expected to reach $200 million and is a mixture of equity and debt — is LGT Lightstone, with participation from Hanaco, Bonnier, Haniel, and Latitude. Existing Infarm investors Atomico, TriplePoint Capital, Mons Capital and Astanor Ventures also followed on. It brings the company’s total funding to date to more than $300 million.
That’s likely testament to the speed of new retail partnerships over the last twelve months. They include Albert Heijn (Netherlands), Aldi Süd (Germany), COOP/Irma (Denmark), Empire Company’s Sobeys, Safeway, and Thrifty Foods (Canada), Kinokuniya (Japan), Kroger (U.S.), and Marks & Spencer and Selfridges (U.K.).
With operations across 10 countries and 30 cities worldwide, Infarm says it now harvests over 500,000 plants monthly, and in a much more sustainable way than traditional farming and supply chains. Its modular, IoT-powered vertical farming units claim to use 99.5% less space than soil-based agriculture, 95% less water, 90% less transport and zero chemical pesticides. In addition, 90% of electricity used throughout the Infarm network is from renewable energy and the company has set a target to reach zero emission food production next year.
Founded in 2013 by Osnat Michaeli, and brothers Erez and Guy Galonska, Infarm’s “indoor vertical farming” system is capable of growing herbs, lettuce and other vegetables. It then places these modular farms in a variety of customer-facing city locations, such as grocery stores, restaurants, shopping malls, and schools, thus enabling the end-customer to actually pick the produce themselves. To further scale, it also installs Infarms in local distribution centres.
The distributed system is designed to be infinitely scalable — you simply add more modules, space permitting — whilst the whole thing is cloud-based, meaning the farms can be monitored and controlled from Infarm’s central control centre. It’s also incredibly data-driven, a combination of IoT, Big Data and cloud analytics akin to “Farming-as-a-Service”.
The idea, the founding team told me back in 2017 when I profiled the nascent company, isn’t just to produce fresher and better tasting produce and re-introduce forgotten or rare varieties, but to disrupt the supply chain as a whole, which remains inefficient and produces a lot of waste.
“Behind our farms is a robust hardware and software platform for precision farming,” explained Michaeli at the time. “Each farming unit is its own individual ecosystem, creating the exact environment our plants need to flourish. We are able to develop growing recipes that tailor the light spectrums, temperature, pH, and nutrients to ensure the maximum natural expression of each plant in terms of flavor, colour, and nutritional quality”.
On that note, I caught up with two of Infarm’s founders to get a brief update on the Berlin-headquartered company and to dive a little deeper into how it will continue to scale.
TechCrunch: What assumptions did you make early on that have turned out to be true or, more interestingly, not panned out as expected?
Osnat Michaeli: When we first chatted about four years ago…, we were 40 people in Berlin and much of the conversation centered around the potential that our approach to urban vertical farming might have for retailers. While for many it was intriguing as a concept, we couldn’t have imagined that a few years later we would have expanded to almost 10 countries (Japan is on its way) and 30 cities, with partnerships with some of the largest retailers in the world. Our assumptions at the time were that retailers and their customers would be attracted to the taste and freshness of produce that grew right in front of them in the produce section, in our farms.
What we didn’t anticipate was how much and how quickly the demand for a sustainable, transparent and modular approach to farming would grow as we, as society, begin to feel the impact of climate change and supply chain fragility upon our lives, our choices and our food. Of course we also did not anticipate a global pandemic, which has underscored the urgency of building a new food system that can democratize access to high quality, amazing tasting food, while helping our planet regenerate and heal. The past few months have confirmed the flexibility and resilience of our farming model, and that our mission is more relevant than ever.
In terms of signing on new retailers, based on your progress in the last 12 months, I’m guessing this has got easier, though undoubtedly there are still quite long lead times. How have these conversations changed since you started?
Erez Galonska: While lead times and speed of conversations can vary depending upon the region and retailer. In mature markets where the concept is familiar and we’re already engaged, deal conversations can reach maturity in as little time as 3 months. Since we last spoke we are already working with most of the leading retailers that are well established in Europe, U.K. and North America. Brands which in each of their markets are both forerunners in a retail industry rapidly evolving to meet the demand for consumer-focused innovation, while proving that access to sustainable, high quality, fresh and living produce is not only possible, but can be available in produce aisles today, and every day of the year, with Infarm.
I’m interested to understand where Infarms are installed, in terms of if the majority is in-store and consumer-facing or if the most scalable and bulk of Infarm’s use-cases are really much larger distribution hubs in cities or close to cities i.e. not too far away from places with population/store density but not actually in stores. Perhaps you can enlighten me on what the ratio looks like today and how you see it developing as vertical farming grows?
Erez Galonska: Today across our markets, the split between our farms in stores and in distribution centers is roughly 50:50. However as you anticipate, we will be expanding our network this year with many more distribution hubs. This expansion will likely lead to an 80:20 split as early as next year, with the majority of our regions being served with fresh, living produce delivered throughout the week from centrally-located hubs. This not only offers retailers and restaurants flexibility in terms of volumes of output, and the ability to adapt the presentation of our offerings to floor areas of different sizes, but it also allows us to begin to serve whole regions from our next generation farms under development today.
Based in our hubs, these farms will deliver the crop-equivalent of an acre or more of fresh produce on a 25 m2 footprint, with significant further savings in energy, water, labor and land-use. We believe this technology will truly challenge ideas of what is possible in sustainable, vertical farming and we look forward to talking about it more soon.
Lastly, what are the main product lines in terms of food on the shelves?
Osnat Michaeli: We have a catalog of more than 65 herbs, microgreens, and leafy greens, that is constantly growing. Our offerings range from the known and common varieties like Coriander, Basil, or Mint, to specialty products like Peruvian Mint, Red Veined Sorrel or Wasabi Rucola.
Because our farms give us excellent control over every part of a plant’s growth process, and can imitate the complexity of different ecosystems, we will be able to expand the diversity of Infarm produce available to consumers to include root vegetables, mushrooms, flowering crops and even superfoods from around the world in the near future. What you see today with Infarm is still only the beginning.