Bugs Bunny… Porky Pig… Elmer Fudd… Speedy Gonzales… Road Runner.
Growing up, these were some of my favorite cartoon characters.
But my all-time favorite was someone else:
Popeye was gruff but likeable, and occasionally he was brilliant, solving problems that even the local police or scientific community couldn’t figure out.
Most of all, however, he was strong.
All he had to do was swallow some spinach and his physical strength would become superhuman.
Back when I was an eight-year-old kid, I hoped that I could be like Popeye one day — where a small can of spinach could turn me into a powerhouse.
Well, I may have finally done it…
But instead of turning me into a physical powerhouse, the “spinach” I’m about to introduce you to could turn me into a financial powerhouse…
And as you’re about to learn, it could do the same for you.
The Market for Leafy Greens
Popeye’s days of stardom may have come and gone, but recently, spinach and other leafy greens have turned into a massive growth market.
Even in the U.S. — historically, a “fast-food nation” — we now spend about $8 billion per year on leafy greens like spinach, kale and arugula.
$8 billion is a lot of green…
And it explains why professional venture capitalists like General Catalyst, First Round Ventures, and Softbank have recently invested in start-ups like Aerofarms and Gotham Greens — startups aiming to create better ways to grow greens.
These two startups alone have already raised more than $160 million, and a similar startup called Plenty is already worth a reported $500 million.
But as professional investor Sanjeev Krishnan of S2G Ventures noted, despite the large sums raised so far, this type of farming “is unlikely to be dominated by one name.”
And now a new competitor has entered the ring…
Introducing: Element Farms
I’m referring to a startup called Element Farms.
Element Farms is an agriculture company driven by technology.
It got its start as an R&D project at Cornell University. Its goal was to create better solutions for growing produce indoors by taking advantage of a technology known as “hydroponics.”
Hydroponics is a method of growing plants without soil. Instead, it allows plant roots to come into direct contact with critical nutrients and get ample access to oxygen.
Because plants grown in this manner don’t have to work as hard to obtain nutrients, they mature 25% faster and grow 30% larger than those grown in soil.
Traditionally, there have been a few key challenges to hydroponics-based agriculture. These include inconsistent growing patterns, plant disease, and high operational costs.
But now Element Farms has created a solution that overcomes these hurdles…
Its solution is based on two patent-pending breakthroughs.
The first is a proprietary lighting algorithm that combines natural sunlight in a greenhouse with high capacity LEDs.
The second is a method for adding a precise amount of carbon dioxide to the plant canopy.
Using these technologies, the company is able to produce 20x the yield of conventional farming techniques, and can grow its crops in half the time as its traditional competitors.
These advantages have helped the company grow very quickly:
Since launching last year, Element Farms has already gotten its products into 12 retail outlets and reached six figures in annualized revenue.
But now it’s looking to expand its operations.
And this is where you come in.
A $500,000 Funding Round
Demand for Element Farms' product is already exceeding supply.
So now it’s raising $500,000 to rent more greenhouse space, hire more staff, and invest in equipment.
With this round, the company plans to expand its business nationwide and become cash-flow positive.
The valuation for the round is just $1.9 million, and the minimum investment is $250.
Should we consider investing? Let’s take a look at the pros and cons.
Pros and Cons of an Investment
On the “pro” side:
- Element Farms has created a patent-pending method of growing super-spinach — again, as compared to its competitors, its technology can grow far more produce in far less time.
- Consumers are already lining up to buy its products.
- And given the size of the opportunity, the company could realistically become a takeover target. Potential suitors include major agricultural companies like Dow/DuPont, Bayer/Monsanto, Nutrien, or Archer Daniels Midland.
Furthermore, the company’s valuation is very attractive.
You see, the vast majority of start-up takeovers occur at the sub-$100 million level. And the true “sweet spot” is below $50 million.
So, given the company’s current $1.9 million valuation, even a small acquisition in the $20 million-range could hand investors like you 1,000% on your money.
On the “con” side, this is the type of startup that, in the future, might need millions of dollars in funding — and that makes it a riskier investment.
After all, this isn’t a software or Internet company. It’s a company with a physical product — the type of product that needs to be planted, grown, and shipped.
To learn more about Element Farms and explore an investment, click here »
Please note: Crowdability has no relationship with Element Farms, or with any of the companies or platforms we write about. Crowdability is an independent provider of education, information and research on start-ups and alternative investments.