- The Controlled Environment Agriculture (CEA) market is projected to reach $100 billion by 2030.
- To drive this growth, Hexafarms has received €1.3 million in funding to optimize indoor commercial food production.
- Hexafarms’ solution uses AI to reduce costs, increase yields, and minimize losses in CEA facilities.
Hexafarms, an agtech startup that develops software for indoor commercial food production, recently announced the successful close of €1.3 million (US$1.4 million) in a pre-seed funding round.
The round was led by Speedinvest, a prominent European early-stage investor, with participation from Mudcake and Techstars.
Hexafarms’ successful funding round comes at a crucial time when the global food production ecosystem faces significant challenges, and the potential benefits of controlled environment agriculture (CEA) are becoming increasingly apparent.
Why Controlled Environment Agriculture (CEA)?
Controlled Environment Agriculture (CEA) offers numerous benefits, such as year-round production, adaptability, input efficiency, land use maximization, and reduced environmental impact. Consequently, the CEA market is expected to reach $100 billion by 2030.
However, the current global food production ecosystem faces significant challenges, with 14% of food lost between harvest and retail and 10-30% lost between seed and harvest. These losses exacerbate food insecurity and global hunger.
Hexafarms’ Goal: Making Indoor Farming Smarter
Considering that about 55% of the fruits and vegetables consumed in cities in the West are cultivated indoors, Hexafarms recognizes the need for a streamlined approach to food production in indoor spaces, including greenhouses.
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Consequently, the company embarked on a mission to address the inefficiencies in the CEA food production system, which relies heavily on manual labour – a solution that is neither scalable nor sustainable.
How Hexafarms’ Solution Works
The company’s SaaS platform collects data and uses AI to monitor, control, and optimize greenhouses and vertical indoor farms in real time. Over the past six months, Hexafarms has tracked more than 40 hectares of commercial greenhouses with its software.
The company’s AI models can forecast crop yields four to eight weeks in advance with an impressive accuracy of up to 95%. With this new funding, Hexafarms plans to enhance its AI and machine learning capabilities further while expanding its team of research and development experts.
Furthermore, the Hexafarms app serves as a window into production, providing growers with accurate, tailored information regarding harvest time and highlighting issues that can be addressed to optimize plant biology in the production process.
Andreas Schwarzenbrunner, partner with Speedinvest’s Climate Tech & Industrial Tech investment team, stressed the urgency of innovative solutions in the agricultural sector, stating, “The agricultural sector is in urgent need of innovative solutions to address the pressure from climate change on commercial food production process and food insecurity.
“We have strong confidence in Hexafarms and cannot wait to see them further develop their AI and machine learning capabilities and expand their team of experts. We are convinced their app will transform commercial food production through optimisation and digitalisation.” he added.
Opportunities in the CEA Market
Hexafarms is capitalizing on the opportunities presented by the controlled environment agriculture (CEA) market, which is expected to reach $100 billion by 2030. The approach is to optimize crop production through AI models that reduce preventable losses.
Despite the recent decline in funding for the indoor farming segment, Hexafarms remains confident in its ability to address the pressing issues facing the global food production ecosystem.
In his remarks, David Ahmed, founder and CEO of Hexafarms, emphasises the importance of their mission, stating, “Although the global agriculture industry plays a fundamental role on a vast scale, it’s dishearteningly under-optimised. Our mission is to revolutionise this landscape.
“With our constantly evolving AI models, we aim to unlock potential savings of nearly 30 percent in variable costs and losses. When we harness the power of algorithms, we can cater to the individual needs of each plant at any scale, surpassing the capabilities of human intervention,” he added.
Investment and Future Plans
With this fresh round of funding, which brings Hexafarms’ total capital raised to over €2.5 million, the company is well-positioned to invest in its AI and machine learning capabilities, increase the accuracy of predictions, and grow its portfolio of crops.
Interestingly, Hexafarms claims to have the widest portfolio across Europe based on public information of supported crops and cultivars and is currently processing an estimated 9 million kilos of strawberries and tomatoes for this quarter.
Anna Ottosson, a founding partner at Mudcake, emphasises the importance of increasing the efficiency of production systems to feed the growing global population. She believes that Hexafarms’ unique AI-optimised software for commercial greenhouses will play a crucial role in ensuring food security for current and future generations.
About Hexafarms
Hexafarms develops software for indoor commercial food production. The agtech startup uses AI and machine learning to monitor, control, and optimise crop growth in greenhouses. Also, they provide growers with accurate harvest forecasts and insights to reduce losses and increase yields.
