As indoor farming expands, a number of new companies are cropping up to provide better data and monitoring tools for the businesses aimed at improving efficiencies and quality of indoor crops.
One of these companies, the Copenhagen-based Nordetect, is entering the U.S. market with around $1.5 million in funding from government investment firms and traditional accelerators like SOSV, with a tech that the company claims can give vertical farms a better way to monitor and manage nutrients and water quality.
Controlled agriculture, whether in greenhouses or warehouses, benefits from its ability to administer every aspect of the inputs to ensure that plants have the optimal growing conditions. It is, however, far more expensive than just seeding the ground.
Proponents say that these farms can overcome the additional expense by improving efficiency around water use, reducing the application of pesticides and fertilizer, and cultivating for better, tastier produce.
That's where Keenan Pinto and Palak Sehgal's Nordetect comes in. The two co-founders have known each other since they were undergraduates in India eight years ago. They went on to do their masters' work together and after working in bioengineering plants -- Sehgal focused on flowering systems in plants and Pinto focused on roots -- they both went into more digital fields -- but maintained their fascination with plants and kept in touch with each other.
Professional work in medical diagnostics for Sehgal and lab instrumentation for Pinto kept both busy, but they continued their discussions around plant science and soil health.
Roughly three years ago, the two hit on the idea for a combined toolkit for water quality monitoring and soil health. Sehgal left the India Institutes of Technology, where she had been working, and joined Pinto in Copenhagen to begin developing the tech that would form the core of Nordetect's business proposition.
The company's technology consists of an analyzer and a cartridge, a microfluidic chip that users can insert into their water tank to take a sample. From the data that the device collects, farmers can control the nutrients they put into the water to optimize for traits like color and flavor, Pinto said.
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The company was accepted into SOSV's Hax accelerator in 2017 and the two first-time founders moved from Denmark to Shenzhen to begin developing the business. In late 2018 the company moved back to Denmark and raised a small amount of additional capital from SOSV and Rockstart.
By 2020, watching the expansion of vertical farming, the company took what had initially been a soil-monitoring tool and added water-quality monitoring features to support indoor farming. That's when the business started taking off, according to Pinto.
"One of the interesting things is when I consider the outdoor versus the indoor markets. The outdoor felt a bit conservative… the indoor seems much more forthcoming… and that traction allowed us to pull together this funding round $1.5 million," Pinto said.
The new round came from Rockstart, Preseed Ventures, SOSV, the government of Denmark's growth fund, and Luminate, a Rochester, New York-based accelerator that focuses on optical electronics technology.
Luminate's participation is one reason why Nordetect is coming to the U.S., but it's hardly the only reason. There's also the capital that has come in to finance indoor ag companies. The two largest vertical farming companies in the U.S., Plenty and Bowery Farming, have raised $541 million and $167 million, respectively.
"The vertical movement has put people into the position where they are what I call data farmers," said Pinto. "Each batch of produce is being used to learn and the data is more important than the output. We used this market as a beachhead."