Saudi Arabian agri-tech firm Red Sea Farms has raised an additional $6 million in its pre-Series A funding round, which now stands at $16 million.
The company raised the fresh capital from a group of investors based out of the US, Saudi Arabia and the UAE. These include Wa’ed, the Saudi government-owned Future Investment Initiative Institute, the King Abdullah University of Science and Technology (KAUST), Global Ventures, AppHarvest and Bonaventure.
Wa’ed is the venture capital arm of the Saudi Arabian oil and gas giant Aramco.
Red Sea Farms said that the new money will allow it to expand its Saudi and Middle East operations as well as explore growth opportunities in the US where agriculture conditions in some states are harsh.
The latest fundraise comes just two months after Red Sea Farms snagged a $10 million funding cheque from the same set of investors.
Founded by Ryan Lefers and Mark Tester in 2018, Red Sea Farms aims to reduce food insecurity and carbon and freshwater use in agriculture. The company cuts fresh-water consumption by 85 – 90 per cent through its end-to-end growing system that primarily uses saltwater.
The startup says its growing system cuts fresh-water consumption by 85 to 90%. “Through a patented system of new, more efficient solar and growth monitoring technologies, salt water replaces fresh water typically used to cool greenhouses and irrigate crops,” it said.
Aramco had set up Wa’ed, which offers entrepreneurs loan financing, in 2011. Wa’ed also has a venture capital arm that manages investments in excess of $200 million in more than 30 companies in the kingdom.
Wa’ed, through its VC arm Wa’ed Ventures, is the largest and most active VC investor focused on Saudi Arabia-based startups. Through its loan financing arm, it is the kingdom’s only no-collateral lender to startups.
Wa’ed’s other investments include Golden Scent, a Saudi beauty e-commerce platform; and Ynmo, the Middle East’s first Arabic-language instructional software for children with autism and other special educational needs.
In February, Wa’ed Ventures had invested for a second time in Hazen.ai, a startup focussed on artificial intelligence-based traffic analytics and monitoring software.
In June, Wa’ ed had announced investing $500,000 in drone operator FalconViz, five years after first backing the company.
In April, Wa’ed signed a preliminary pact with the Falak Investment Hub to increase venture capital investment for early- and growth-stage Saudi startups. The alliance with Falak was the fifth since December last year following similar agreements with Oqal, Taiba Valley Companies, and Namaa Almunawara, among others.
AppHarvest is an applied technology company building some of the world’s largest indoor farms in Appalachia. The company says it combines conventional agricultural techniques with cutting-edge technology and is addressing key issues including improving access for all to nutritious food, farming more sustainably, building a home-grown food supply, and increasing investment in Appalachia. The Company’s 60-acre Morehead, KY facility is among the largest indoor farms in the US.