"Shark Tank"-Backed Cleantech Company
PittMoss is targeting one of the world’s fastest-growing industries: gardening.
During the coronavirus pandemic, interest in gardening exploded. People grew uneasy about visiting the grocery store, or simply wanted something to do to pass the time at home. Millions of them turned to gardening, and this hobby turned into a $6 billion market.
PittMoss sells a line of next-generation garden soils made from organic, recycled paper. These soils are better for plants and better for the planet.
Like the gardening industry, this company is growing fast. In 2014, it appeared on the startup-focused television show "Shark Tank" and received an investment offer from Mark Cuban. The company launched a year later.
Initially, it sold its soil to nurseries and commercial growers. But after continued interest from home gardeners, the company developed a line of products for home gardening enthusiasts.
Today, PittMoss’ revenues are growing by 50% each year. And its products are sold in 22 states across the U.S. The company has raised more than $4 million from investors, but is seeking additional capital to keep up with demand for its products.
At first blush, gardening soil may not sound like the most exciting investment. But it could potentially be a very profitable one. That's because PittMoss projects its business will be acquired within a few years.
More specifically, the company believes that when it achieves $24 million in sales — this is projected in 2025 — it can be sold for an estimated 2x to 4x its revenues. That would be an acquisition price between $48 million and $96 million. At its current $7.5 million valuation, investors in this round could potentially earn between 7x and 13x their money.
An acquisition like this may indeed be possible. Recent deals in this market include:
• Scotts Miracle-Gro (NYSE: GMO) acquiring Sunlight Supply, a gardening company, for $450 million.
• SHS Griffin, a supplier of greenhouse products and supplies, acquiring Conrad Fafard, a horticultural company, for $133 million.
• And Scotts acquiring General Hydroponics, another gardening business, for $130 million.
PittMoss could become the next sought-after acquisition target.
The company’s soil allows for more air, water, and nutrients to be delivered to plants. The soil is made from recycled fibers, which encourage stronger root development and growth — resulting in bigger, healthier plants. The fibers also provide optimal management of resources such as water and fertilizer. Not only does this increase the time between watering, but it also manages the water more efficiently by allowing plants to uptake water when needed.
The fiber structure of this soil is protected by PittMoss, and ensures that its products can’t be replicated by its competitors.
As mentioned, PittMoss’ soil isn’t just ideal for plants, it’s also ideal for the planet.
This soil was created to solve two major sustainability issues: land waste and CO2 emissions. 34% of landfills are filled with recyclable fiber materials like newsprint, magazines, cardboard, and other paper products. Meanwhile, many “environmentally-friendly” products, such as peat-based potting soils, produce CO2 emissions as soon as they are dug from the ground.
PittMoss’ soils aren’t made with peat moss. This significantly reduces the amount of CO2 put into the atmosphere. Last year, PittMoss’ soil prevented the emission of more than 800 metric tons of CO2. That’s as much produced by cars driving more than 2 million miles, more than 890,000 pounds of coal burned, or more than 91,000 gallons of gasoline consumed.
PittMoss offers six products. This includes an organic soil conditioner and potting mix, a nutrient-enhanced potting mix, and two animal bedding mixtures for chickens, horses, and rabbits.
The company sells its products through wholesale distribution, e-commerce channels, and retail stores. Its products retail for between $9.95 and $20.95 at local gardening centers. And as its business scales, its cost of goods as a percentage of revenue will decrease. Current margins are around 45%.
Before long, PittMoss estimates that it will cost $1.20 to produce each cubic foot of its soils. Sales figures will be an estimated $2.50 per cubic foot when sold to commercial growers, $5 when sold at wholesale, and $10 at retail.
Moving forward, PittMoss has identified six new opportunity areas for its products. These include equine bedding, groundwater management, worm castings, specialty mixes, and compost starters.
Chuck is regarded as one of the top soil scientists in the U.S.
Before joining PittMoss in 2014, he was Director of Research & Development with Michigan Peat Company, makers of soil. He managed quality control and assisted with marketing projects.
He earned a Bachelor’s degree in Soil Science from Michigan State University, a Master’s degree in Soil Fertility from the University of Missouri, and a Doctorate in Plant Physiology and Nutrition from Michigan State.
Brian is a 10-year angel investor, and has worked with more than half a dozen startups.
Before taking over at PittMoss in 2016, he was President & CEO of Express Management Group, a financial services company focused on real estate lending. Before that, he was Co-Chairman of the Technology Council of Northwest Pennsylvania, focused on improving the state’s entrepreneurial efforts.
For eight years, he taught a Master’s level course in managing information organizations at Gannon University. Prior to that, he was Chief Information Officer with Rentway, an information technology company that went public.
Brian earned a Bachelor’s degree in History from Penn State and a Master’s degree in Computer and Information Science from Gannon University.
Mont developed the idea behind PittMoss in the 1990s, and was instrumental in commercializing its products. For his efforts, he was recently awarded the prestigious Tibbetts Award from the Environmental Protection Agency. This award is given for excellence in research and innovation by small businesses.
Once he got the company up and running, Mont turned over operations to an experienced team. Since then, he’s served as an entrepreneur-in-residence with Purdue University Northwest. He earned a Bachelor’s degree in History from Purdue.
Mark has more than 30 years of sales experience in the horticulture industry. He’s been with PittMoss for the past seven years.
Prior to that, he was Vice President of Sales with Therm-O-Rock East, a company selling organic materials and horticultural mixes. Before that, he spent 19 years as Vice President of Sales with Brighton By-Products, which sells greenhouse-related equipment and supplies.
Mark earned a Bachelor’s degree in Industrial Sociology from Penn State.