Pure Harvest aims to grow UAE’s next $1bn unicorn startup

Supplied

• Abu Dhabi’s Pure Harvest Smart Farms has so far raised $387.1m
• Fresh produce grown in climate-controlled greenhouses 

“Why did such a promising young man leave Silicon Valley to grow tomatoes in the desert?”.

It’s a question Stanford University business graduate and former private equity investor Sky Kurtz says he gets asked a lot, even by his own father-in-law. 

“My wife’s father thought I’d lost my mind. He was literally like, ‘there’s something wrong with that one, honey’,” said Kurtz, co-founder and CEO of Pure Harvest Smart Farms.

His fast-growing agtech business is based in Abu Dhabi, and last week secured $180 million in funding from global investors.

• Revealed: Top 30 sustainable companies in the Middle East

• Abu Dhabi is harvesting technology to drive a farming revolution

It plans to double in size within 18 months and is aiming to become the Middle East’s next big $1 billion unicorn startup within two years. Kurtz is certainly not doing anything wrong by the looks of it.

Speaking to him on a crackly Zoom call as he travelled through a remote part of Malaysia, Kurtz’s passion for the project is abundantly clear.

“It’s brutally hard, and especially early on. When we started, nobody believed in this. I’m not kidding,” he said.

But events over the last few months have proven the project’s worth.

Founded in 2016, the company has so far raised $387.1 million, but its latest round was heavily oversubscribed. At the beginning, the target was to raise $100 million, but that was soon passed.

They eventually raised funding from a consortium of global investors, including the UK’s Metric Capital Partners, Korea’s IMM Investment Corp, and Saudi Arabia’s Olayan Group, with possibly more to come.

“We ended up getting more and more interest,” he said. “There’s one additional investor that we’re continuing to engage with. If they come in, we’ll take it.

“It’s a significant strategic investor who doesn’t commonly invest in fast growth companies but would add significant strategic merit to our expansion plans.” 

Kurtz admits they did “take a lot of extra money” but a “perfect storm” moment has made governments and consumers realise the limitations of shipping food around the globe and the need for local, sustainable food chains, especially in desert climates like the Gulf.

“We have potential projects in Egypt, Malaysia, Singapore, Indonesia, Philippines and Korea,” he said.

“So, as the project pipeline grew, rather than go close our round and come right back for capital nine months later, we thought, ‘let’s just take more’.”

Headquartered in Abu Dhabi, Pure Harvest Smart Farms grows fresh produce in high-tech, climate-controlled greenhouses.

The company currently has around 300 employees and produces over 17 million pieces of fruit and vegetables a year. 

“I’m comfortable we will more than double the capacity of the company over the next 18 months with the projects that are soon to be announced or have already been board approved,” Kurtz said.

UAE supermarket chain Spinney’s is one of Pure Harvest Smart Farms’ biggest partners and it has seen a rise in the amount of produce it sells.

“We are seeing an increased amount of produce sourced from local smart farms… It is driven by the improvement in quality, as these farms have evolved as, well as wanting to support local food businesses, in line with the government’s strategy on food security,” a Spinney’s spokesperson said.

The aim of each technology startup is to join the famous Unicorn Club and become a $1 billion company, and Kurtz believes that won’t be too far away.

“I call it a Unicamel, because of the region,” he said. “I believe we’re not far from it.

“There have been similar companies in America that are less profitable, smaller, I think, less techy and capable and have smaller adjustable markets – and they’ve been valued at over a billion [dollars].

“I hope that in our next round we will be valued for a billion.

“I would expect it sooner, but I would say that my expectation somewhere in the 18 to 24 months range is reasonable,” he said, adding that his real goal is to become one of the Gulf’s household brand names.

“We want to be a company that the country and the region can be proud of,” he said.

“How many international brands do we have? We have Emirates Airlines, Huda Beauty, Aramco. You have to really stretch for six or ten. And we want to be one of those companies that the region is proud of.” 

Food for thought: UAE’s growing agtech business sector

The GCC imports around 85 percent of its food, so food security is a major issue.

In May 2021 the UAE launched Food Tech Valley, an 18 million square foot development located in Dubai’s Warsan area.

The project will harness the latest agricultural technologies to triple the country’s food output, produce 300 new varieties of crops and provide a hub for innovation and R&D.

Speaking at the launch of the Food Tech Valley project, Mariam Almheiri, UAE minister of climate change and environment, said “the Agtech market is projected to grow from $13.5 billion to $22 billion over the next four years.

“The project is part of our efforts to achieve our strategic national goals with respect to food security, as it constitutes an incubator for advanced farms –including indoor and vertical farms – with more than 60 percent of the project’s space allocated to these activities”.

Hydroponic farming is a technology that grows plants with the use of little or no soil and reduces water usage by up to 70 percent. It was introduced to the UAE in 2009. 

Vertical farms were introduced to Dubai with the launch of Badia Farms in 2016. The 8,500 square foot warehouse uses hydroponic farming technology to grow microgreens and herbs for local restaurants. 

Dubai’s Emirates Flight Catering (EKFC) and US company Crop One have also invested $40 million to build the world’s largest vertical farming facility near Al Maktoum International Airport at Dubai World Central. 

Another option was also introduced by Dubai-based startup Desert Control, which uses liquid natural clay (LNC) technology to transform the dry deserts into fertile land.

Last month the company signed its first agreement to commercialise its products in the UAE.