See the original story in Japanese.
Tokyo-based Seak, the Japanese startup behind the Leap farming support platform, announced this week that they have received funding from Gree Ventures, Warehouse Terrada, and Mitsubishi UFJ Capital. This was a series A round for the company, with Terrada and Mitsibushi UFJ Capital continuing their support from the earlier seed round back in September last year.
Together with loans provided through the Japan Finance Corporation’s Young Farmer’s Fund, the total amount of funds raised this round was about 300 million yen (around $2.7 million US). The company plans to continue the strengthening of the Leap platform’s cultivation verification and developing the necessary systems for their franchise model. Along with this announcement, it was revealed that they are the first corporation to succeed in obtaining certification as a new farming company in Tokyo’s suburb of Fujisawa City. In doing so, it becomes possible for the company to provide preferentially secured agricultural land to their registered users.
The goal of Seak’s modern tenant farming: Profitable farming
Since its launch back in September of last year, the Leap platform has moved smoothly to the next phase. Seak’s CEO Hiroshi Kurita has experience in startups, previously working at Tokyo-based business incubator Archetype, and he subsequently served as a senior executive at Japanese personal mobility startup Whill. I get the impression that he made this next move with great care.
But, he deals with agriculture. Not only is it far from the Internet, but as a business there is an indispensable necessity for tangible assets such as greenhouses, land, fertilizer and so on making it that much more disparate from Internet businesses which are forced to employ net-specific management tools. Kurita cited two driving forces behind the funds procured this time around; they are to “establish KPIs for cultivation” and “prepare a franchise model.”
First, with regards to establishing KPIs for cultivation, the figures were set down to the smallest detail, such as the harvest amount per unit area of 600 square meters, and depreciation expenses like the equipment cost, the cost of the crop, the cost of the greenhouses, etc., and the goal was to keep the final personnel expenses at a fixed level from this point on.
There is a tendency to have a low cost of labor in the field of agriculture, and there have been cases of laborers working at the significant level of hundreds of yen less per hour than the wage dictated by law.
The Leap platform aims to raise this wage from 2,000 yen (around $18 US) to 3,000 yen (around $27 US) by setting the hourly wage as a major parameter and improving the cost and efficiency of harvesting. Furthermore, soil science research expert Dr. Nakhshiniev Bakhtiyor was appointed as the Chief Development Officer, and a system is also in place to develop and verify the platform’s unique soil and cultivation solution management method.
Second, in order to establish a franchise model, the company is constructing a platform system that utilizes information technology such as online content for operational learning, a chat system that can communicate with cultivation management headquarters, and sensor cooperation that can acquire data from inside the greenhouses in real time. By linking up with the ID of a registered farm this will be useful in unifying the management of information.
According to Kurita, in correlation with the funds secured this round, the company plans to expand the Leap team to 20 people, and in particular are searching for responsible, talented individuals to help develop the platform, thereby promoting the strengthening of their management foundation for future business expansion.
Translated by Amanda Imasaka
Edited by Masaru Ikeda