On-Demand Indoor Vertical Farming Services | AgriTech Startup Idea


This AgriTech Startup Idea from the 1001 Startup Ideas collection of YoStartups is to provide on-demand Indoor vertical farming services to cater to high quality organically grown food requirement of the masses. There is a huge gap in this segment.

Market Definition for 1001 Startup Ideas – On-Demand Indoor Vertical Farming Services

The UN Food and Agriculture Organization (FAO) estimates that farmers will have to produce 70% more food by 2050 to feed the world’s expected 9 billion-strong population.

The UN Food and Agriculture Organization (FAO) in 2011 reported that 25% of the world’s farmland was degraded due to soil erosion, water quality degradation and loss of biodiversity; the agency itself has recommended new farming techniques with integrated irrigation to be introduced as the current systems are not efficient.

The proposed solution of vertical farming is the perfect solution for the increasing food demand, which uses the least amount of resources like land, water, nutrients, and is mostly free from any contamination from pesticides and GMO.

Competitor Analysis for 1001 Startup Ideas – On-Demand Indoor Vertical Farming Services

Plenty Inc., a California based startup operates large indoor fields growing fruits, vegetable herbs, etc. in farms connected through a vast network of sensors, IoT devices. Plenty’s indoor farms can grow everything except trees and underground vegetables. They have recently raised $200 million in funding from Softbank; other notable investors include Eric Schmidt and Jeff Bezos.

Infarm is a Berlin-based startup which is providing vertical indoor farming solutions through illuminated containers connected to an online central farming network, which can regulate temperature, PH, nutrient supplies with the help of sensors. Infarm has integrated in-store farming for two of Germany’s largest food retailers EDEKA and METRO. Infarm is operating more than 50 farms across Berlin in supermarket aisles, restaurants kitchens, and distribution warehouses. They have recently raised $ 25 million in series A from Balderton Capital.

Pain Point and Target Audience for 1001 Startup Ideas – On-Demand Indoor Vertical Farming Services

A report published by World Economic Forum (WEF) in association with Bain and Company in 2014 estimated that almost 95% of the food loss and waste is due to supply chain inefficiencies. In the same report, they also found that poor transportation infrastructure and border delays are also the primary barriers in the supply chain.

In another survey, UN estimates that cities will host 60% of the world’s population by 2030, this means there will be a surge in demand for freshly grown food closer to places where there is a high density of population. The current supply chains are inefficient, and the customers don’t get the confidence about the grown food.

The target audience for this startup idea would be the urban population, which can be accessed through supermarkets, and distribution warehouses which are involved in the grocery business. Other prospective customer segments can be restaurants and hotel chains.

Value Proposition for 1001 Startup Ideas – On-Demand Indoor Vertical Farming Services

The food produced in indoor farms is virtually free of all pesticides and genetic modifications. Various experiments have shown that indoor farming is highly efficient compared to conventional farming as all the parameters affecting the growth of the plant can be optimized in a controlled environment. For example, Plenty Inc., claim that their indoor farms can produce upto 530 times more than that of a regular field, and with an output of up to 1,200 plants per month from a single farm unit. Infarm claims to have already made some locations self-sufficient where their solutions have been deployed.

But one of the most appealing aspects of indoor farming to an urban consumer would be the fact that they have complete information about the food they are eating and it is free from any harmful chemicals, and fresh food can be made available throughout the year without any genetic modifications. Vertical indoor farming is also infinitely scalable, as it does not require land.

Business Model for 1001 Startup Ideas – On-Demand Indoor Vertical Farming Services

The startup can charge a one-time implementation fee for the hardware setup from its consumers like supermarkets, distribution warehouses, restaurants, etc. The startup can charge a monthly subscription fee for the cloud-based monitoring software which controls all the growth parameters like light, water, nutrients, temperature, and PH. It can also charge for the refill of the nutrient mixture that is used for nourishing the plants.

Way to Market for 1001 Startup Ideas – On-Demand Indoor Vertical Farming Services

The startup will have to identify and select a group of highly consumed vegetables or herbs in association with local supermarkets or distribution warehouses. The startup will have to design an indoor vertical farming unit with artificial lighting and water pumps. This indoor farming unit will have sensors that can monitor temperature, PH, water, light, nutrient supply (with water) and feed the data generated from sensors into the cloud, where the data is further analyzed to make decisions regarding the growth parameters. The artificially intelligent software, in the beginning, will have to simulate various growth parameters from the data generated, and through machine learning identify the most optimal conditions for each plant. Data collection and optimization is the most crucial step as this can make or break the startup.

Once the startup is ready with the integrated hardware and software solution, it can launch the product officially.

Key Milestones for 1001 Startup Ideas – On-Demand Indoor Vertical Farming Services

The identification of the target plants, the design, and construction of the indoor farming units along with the integration of the sensors have to be completed in the first quarter. The development of the software can be done simultaneously in the first quarter as it is independent of hardware design and construction.

The startup will have to run simulations by manipulating the various growth parameters of the plant like light, PH, temperature, humidity, etc. till an ideal growth combination is achieved. The startup will have to use machine learning and AI in this phase to build a consistent predictive model. This phase should be ideally completed in one quarter but can take more time as it is the most important step before the final offering can be made.

Investment needed for Prototyping for 1001 Startup Ideas – On-Demand Indoor Vertical Farming Services

The proposed startup can raise up to $125k from agritech accelerators or incubators like SOSV, Pearse Lyons’ global agritech accelerator or any of the government grants supporting innovation in agriculture. All the money raised will have to be used for procurement of hardware and designing of software solution required for the start-up to scale up and launch. No funds should be utilized or payment of rents and salary.

Team Capability for 1001 Startup Ideas – On-Demand Indoor Vertical Farming Services

The team will need agri-scientists, data scientists with expertise both on Machine learning and AI. The team will also need a full stack developer to develop a platform which can connect to various indoor farming installations and monitor them in real-time. It will be beneficial to have someone from the food supply chain industry, as they can speed up onboarding of target customers.

Investors/Expert Take for 1001 Startup Ideas – On-Demand Indoor Vertical Farming Services

The UN Food and Agriculture Organization (FAO) estimates that the investment deemed necessary for irrigation management, soil conservation, and flood control until 2050 is more than $1 trillion, but the recent advances in agriculture and farming techniques have shown other ways to control damage and find alternate self-sustaining models like indoor farming.

The recent $200 million funding of Plenty Inc by Softbank and $25 million funding of Infarm by Balderton capital are a further testament to prove that investors are willing to back innovations by startups, which are trying to solve global problems.

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This 1001 startup ideas article is from Yostartups, YoStartups is a Pre Accelerator, and it empowers entrepreneurs to propel their business ideas into successful ventures. Yostartups’ core mission is to take the message of entrepreneurship to 1 billion people globally by 2020.

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