Red Sea Farms, a controlled environment agriculture (CEA) startup developing saltwater-fed farming facilities, has closed its Series A round at $16 million.
The Saudi Arabia-based company just secured a $6 million second tranche of Series A funding from two US investors — embattled CEA outfit AppHarvest and private equity player Bonaventure Capital — following a $10 million injection from regional investors back in June.
Red Sea Farms’ other Series A backers include Saudi Arabia’s Wa’ed Ventures — the VC arm of state-owned oil giant Aramco — as well as the Future Investment Initiative Institute and King Abdullah University of Science & Technology‘s KAUST Innovation Fund; and Dubai-based VC firm Global Ventures.
At the time of the first tranche, the startup said it was raising funds in order to develop its first commercial-scale indoor farms and finance its expansion into the neighbouring UAE.
It aims to grow its footprint to between four and eight facilities across central and western Saudi Arabia, as well as the UAE’s Abu Dhabi, covering a total of six hectares.
With the second tranche and AppHarvest and Bonaventure coming on board as investors, the startup now plans on “exploring growth opportunities in the US where growing conditions are harsh.”
Insulating island and dry coastal economies from supply chain disruptions post-Covid – read more here
Spun out of KAUST in 2018, Red Sea Farms has developed a range of CEA technologies and crop varieties which reduce indoor farming’s reliance on freshwater, enabling them to use saltwater instead. It describes its approach as a “blend of plant science, sustainable cooling, light and energy management, and systems that use artificial intelligence.”
Among other things, it uses saltwater to cool greenhouses and irrigate crops that it has bred in-house to be more tolerant of salinity.
This opens up crop cultivation opportunities in environments where freshwater is scarce — such as deserts, or small islands at sea — and avoids the high costs associated with seawater desalination.
Red Sea Farms mainly focuses on growing tomatoes, and claims that its proprietary setup system results in exceptionally sweet fruit with high levels of vitamins and antioxidants. Moreover, they can be grown sustainably using saltwater that has been diluted up to 30%, saving as much as 90% of the freshwater typically required for growing tomatoes, the startup suggests.
In a statement, the startup said it is already engaged in discussions with prospective investors to participate in its next round of fundraising, which it is slating to take place next year.