A fresh take on vertical farms to transform cities
FU Ventures wants to move beyond 'plant factories'
Today’s startup is slightly off-piste compared to what you’ve come to expect from PreSeed Now. But I get the feeling quite a lot of you will like this, given how popular previous farming-adjacent startups we’ve featured have proved to be.
FU Ventures has built up a lot of experience in vertical farming over the past decade thanks to its social enterprise roots. Now it’s gearing up for the commercial launch of an offering that could prove very popular as our cities go through a necessary transformation in the next few years.
Next week we have compelling fintech and deep tech startups for you, which will be far more familiar ground. But for today, let’s explore something a bit different…
FU Ventures has a fresh take on vertical farms to help reshape cities of the near future
I recently walked through my local shopping centre and noticed that what I remember was previously a clothes shop had been transformed into a dining and bowling venue.
That’s something that would have been unthinkable a few years ago, and it’s a simple example of how city centres are being transformed as more people live in them, fewer people commute into them, and more people shop online.
Looking to help cities deal with this shift is FU Ventures, a spin-out from Liverpool’s Farm Urban, which describes its mission as “to transform towns and cities and organisations into greener, healthier, more inclusive places”.
Ignore the VC-like nature of the FU Ventures name, it’s essentially a vehicle for commercialising the work Farm Urban has been doing over the past decade, with a timely offer to towns and cities.
Farm Urban emerged from the University of Liverpool in 2013, and has spent the 10 years since developing proprietary expertise in the space of vertical farming.
“Systems operation, hardware, software, lighting, recipes, nutrients, inoculants… there are lots of different parameters that you need very close control over to really make vertical farming work,” says managing director Paul Myers.
As a social enterprise, Farm Urban also developed education and social outreach programmes, but identifying that shift toward the commercial viability of ESG (Environmental, Social and Governance) initiatives that I discussed in Tuesday’s newsletter, they now want to turn what they’ve developed into a more commercially-minded operation.
Rethinking vertical farming
The core offering here is an ‘Urban Oasis’, which combines vertical farms, urban allotments and mixed-use event space on unused rooftop spaces. This visitor attraction and sustainable urban regeneration opportunity offers, Myers says, an annual ESG impact of greater than £14m per site.
Myers wants to keep the specifics of rollout plans vague, but he says FU Ventures is in discussions with a number of local authorities and private landlords across the UK about rolling out Urban Oasis projects in cities and towns.
Imagine the rooftop of a disused or underutilised office building or multi-storey carpark being transformed into a flourishing green space.
FU Ventures has been inspired by the likes of Brooklyn Grange in the USA and Melbourne Skyfarm in Australia, but with a real focus on ESG and learning from what Myers sees as flaws in traditional vertical farming models.
“We've been in this space for 10 years and watched a lot of companies come, raise money, and go, and others raise more and more money, and burn through a lot of cash…
“Just doing vertical farming on its own–what we call ‘plant factories’–is challenging, especially in the current climate, with the energy crisis. But what we've been able to do is to take vertical farming and tap into a number of well established markets where we can add a lot of value beyond just the produce itself.”
By this he means ESG, public regeneration, and the construction industry.
“I think that's the really kind of clever bit of what we've done - we've taken the theme of vertical farming that people want to see, but is challenging financially–the unit economics are still very difficult–and paired it with something that is profitable and scalable in that Urban Oasis model,” says Myers.
A new use for ‘failing assets’
“Local authorities are really keen to regenerate areas of city centres and towns with a green focus. And then looking at shopping centres specifically, they're struggling to maintain the footfall, and car parks… ultimately cars are being moved out of cities,” Myers argues.
“If you take a long term view, a multi-storey car park is a failing asset… We can take these failing assets, whether it's the upper floors of shopping centres, or top floors of car parks, and reimagine them, turning them into a green regeneration project with huge ESG value and biodiversity net gain potential.”
“For the landowners, whether it's public sector or private sector, we're breathing new life into a struggling or failing asset in a kind of very clean green way. And in doing so attracting large numbers of footfall to increase the value of those assets, and generating rental income from them.”
Myers notes that new buildings could take advantage of the concept, too.
FU Ventures consists of a team of four, with complementary specialisms.
Myers has a PhD in Epigenetics, which involved studying the relationship between the environment and health. His co-founder Jens Thomas has a PhD in computational biology and a background in software development.
It’s all about the expertise
Myers says FU Ventures’ domain expertise and focus on ESG outputs is key to making this offer about more than just operating gardens and event spaces.
“What we've been able to do over the last nine years is work with most of the leading [vertical farming] hardware and really understand how to optimise that technology,” says Myers.
He gives the example of a ZipFarm they installed in 2019. He says they applied “lean operational excellence” to the hardware and managed to increase output by 42% and reduce waste from 22% to below 2%.
“That obviously has a significant impact on the output, and therefore the profitability, of that technology. Our IP is around systems and operational excellence of various vertical farming hardware,” says Myers.
“It's a real gap in the market. If you speak to a lot of the leading hardware manufacturers and suppliers, there just aren't many people who know how to operate these facilities and really make them work, because the technology is so new.
Farm Urban’s experience in capturing the ESG value of vertical farming is another key element of the FU Ventures pitch. Myers says a study the company commissioned gave a ‘best in class’ conventional vertical farm an ESG value of £1.8m versus a £14.6m per annum value for Farm Urban.
“We donate a lot of produce, we offer education outreach programs to really embed these vertical farms into the fabric of society and communities. And we've been able to evidence the impact of that.
“We’ve found that has proven very attractive to a range of audiences. Local authorities and corporate organisations are equally attracted to the social impact of vertical farming.”
More commercial offerings, investment plans, and future vision
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More commercial offerings
In addition to the Urban Oasis product, FU Ventures has also developed packages designed to boost the ESG output of organisations, which Myers says they’re already selling to a large property developer and an operator of business and technical parks.
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