The pink farm has grown: Pink Farms attracts SLC to multiply manufacturing
- November 26, 2022
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When Geraldo Maia and the brothers Mateus and Rafael Delalibera worked at Mobly, they got used to sharing their lunch hour for brainstorming. The three wanted to undertake outside the digital world, but they didn’t know what to do. But the idea was right there on the plate.
As startups digitized from banking to real estate, the snap to innovate in the countryside came when Mateus discovered the incursion of Americans and Japanese into the production of hardwoods in the middle of the city — in vertical farms lit by a pink that does not go unnoticed.
Pink Farms, then, was created as a pioneer in the production of leaves in vertical urban farms in Brazil. “When we look at the pink light, we identify an absurd sales potential. You can communicate with whoever you want. It’s a sexy factor that everyone was interested in,” recalls Maia.
Now, the business is on the verge of multiplying its production capacity by ten. Pink Farms is concluding a BRL 15 million series A round attracting SLC, the largest agricultural production company in the country. SLC Ventures, the investment arm of the group from Rio Grande do Sul, will be one of the main investors.
“We plant commodities and they plant vegetables. One on land and the other in hydroponic systems on vertical farms,” said Carlos Eduardo Aranha, the executive responsible for SLC Ventures, who envisions a future in which grain seeds can also be multiplied with Pink Farms technology.
For SLC, the investment – the exact amount not disclosed – is only the second of the innovation arm. SLC Ventures has BRL 50 million to invest in startups over five years, with an average ticket ranging from BRL 1 million to BRL 5 million. Aegro was the other agtech that received investment from the group.
The Pink Farms round began trading a few months ago and should be completed by December, bringing investors from retail investors to large corporations such as SLC, including venture capital funds.
Since July, Pink Farms has had an open round of R$5 million at SMU Investimentos. Fundraising on the crowdfunding platform ends this week and the goal should be reached. In addition to retail investors, the startup will complete the BRL 15 million series A with the contribution of SLC Ventures and other funds that have not yet been named. They all enter at the same valuation of BRL 60 million (pre-money).
Since it was founded, Pink Farms has made some smaller rounds, raising BRL 8.8 million. To get the idea off the ground, the founders put R$150,000 out of their own pockets to test the viability of lettuce produced in a 50 square meter room. The tests were promising, and Pink Farms went looking for investors to do commercial validation. SP Ventures, a manager specializing in agro, and Capital Lab agreed and, in 2019, invested BRL 2 million.
Since then, Pink Farms has raised another BRL 6.8 million, which included contributions from Grão VC, angels like Christophe Allain (from Jasmine) and investors who invested in the BRL 4.8 million round made by crowdfunding platform SMU Investimentos.
The capital raised so far has helped the team led by Maia, who is the CEO of Pink Farms, to make the product competitive and reach some chain stores such as Carrefour and GPA. But the vertical farm in Vila Leopoldina, a neighborhood in the west of São Paulo, was too small for the startup’s ambitions.
With the A series, the company has now reached what could be its turning point in terms of scale. With the BRL 15 million round, Pink Farms will build a large vertical farm — the startup’s first on an exclusively commercial scale. If in Vila Leopoldina, a neighborhood in the west zone of São Paulo, Pink Farms manages to produce 3 tons per month, which is a very small volume to serve large retailers, in the new unit the capacity jumps to something more than 30 tons.
Scale will also bring a price advantage. Currently, Pink Farms leaves have reached an intermediate price between the traditional and organic product. Today, ready-to-eat lettuce costs between R$8.50 and R$9.00. But the new farm will reduce production costs. Energy savings alone, using the free market, will represent savings of around 40%.
In competition with conventional hardwoods, Pink Farms also has an advantage. Harvesting at Pink Farms takes 28 to 40 days, faster than conventional production (60 to 90 days), and with environmental benefits — water use is reduced by 95% and fertilizer use by 60%. There are no pesticides in the production.
The location of the vertical farm has not yet been defined, but it should be located between cities within 10 kilometers of Vila Leopoldina, in cities such as Barueri, Cajamar, Osasco or Guarulhos. The idea is to open the farm in March and reach full capacity by August 2023. With the new factory, Pink Farms hopes to reach breakeven. Billings can reach R$ 20 million.
Production diversification is also on the radar, to include mushrooms, strawberries and other berries. According to the schedule, Pink Farms will no longer be just a producer of leaves in 2023. The national expansion should take place from the following year, with the structuring of debts to build vertical farms to serve cities like Rio and Brasília.
Source: Pipeline Valor