"We started raising money back in 2023. It was really hard. Despite solid operational and commercial results, with our production completely sold out and good unit economics, the global economy, an industry reckoning and high interest rates posed significant challenges. Most funds are focused on larger markets like the US, EU, or Middle East, making it possibly an even tougher scenario for Chile," says Cristián Sjögren.
Cristián Sjögren and Pablo Bunster
AgroUrbana, a Chilean vertical farming startup, recently raised $6 million in funding to expand its operations. Led by Cristián Sjögren and Pablo Bunster, the company plans to use the capital to quintuple its production capacity and reach a break-even point.
"Ultimately, we secured a lead investor that was not into venture capital, a family office involved in real estate and large-scale agriculture, with a past as one of Chile's leading industrial groups. Once we had them on board, others followed, including Amarena, a family office closely related to the ownership of one Chile's largest conglomerates with a strong interest in food innovations and energy."
Scaling operations
Co-founder Pablo Bunster highlighted that the firm is now set on reaching operational equilibrium. "Our challenge is not unit economics but scale. We need to build enough capacity to bring the company to a break-even point. The recent funding round will help us achieve this by expanding our facility and scaling up operations."
Despite many VCs moving out of the market, Pablo emphasized the opportunity in the vertical farming industry, especially in Chile. "There's a huge opportunity in what we do, particularly in Chile, despite it being a challenging market."
Establishing new partnerships
With the new funding, AgroUrbana plans to increase its production from 50 tons to over 250 tons per year within the next 12 to 18 months. Cristián explains, "We're expanding our capacity by five times. The market demand is there, and we need to find the right customers for our stable output. We're deepening relationships with existing customers and exploring new distribution channels, including e-commerce and retail."
The company's approach to scaling has been carefully planned. Operating a pilot farm for three years, learning and optimizing every aspect of the system. "In 2022, we moved to a larger facility, designing a completely new grow system with local suppliers and tech partners. We took one year to ramp up operations and ensure everything, from labor to yield, met our expectations," Cristián adds.
AgroUrbana's baby albahaca and lettuce mix for retail
Expansion throughout LATAM
Looking ahead, AgroUrbana aims to replicate its successful model in other markets. "If we can make vertical farming profitable in Chile, a competitive and developing market, we can do it anywhere," Cristián shares. "We plan to expand into other regions, leveraging our efficient operation and exploring partnerships with local distributors."
Pablo zoomed into the importance of maintaining product quality. "We don't want to sacrifice quality for automation. There are still parts of the process that require human hands to ensure the product meets our high standards. We're taking it step by step."
For more information:
AgroUrbana
Cristián Sjögren, Co-founder
Pablo Bunster, Co-founder
[email protected]
www.agrourbana.ag