Photo - Laava Tech Inc.
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Laava Tech Inc.

AI- & IoT-ENABLED FUTURE OF FARMING

Estonia
Market: Food industry, Farming, Electronics, Artificial Intelligence
Stage of the project: Prototype or product is ready

Date of last change: 20.11.2019
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Idea

Laava Tech has developed and build a combination of software and hardware to decrease lighting energy consumption in indoor farming by up to 90% and increase yield by up to 20%.

Current Status

Traction:
- 13 pilot customers in Israel, Finland, Estonia and Belarus.
- 4 LOIs with the Isreali and Finnish companies.
- Lots of interest to start paid pilots or just buy our product (40+ companies) - I can get LOIs from them if required. We're not able to supply the hardware although we are working on it and getting more paid pilots on board.

Raised capital:
Pre-seed - 245k equity free from grants, competitions, equity free accelerators and self-funding.
Seed 750k out of 2M given or committed. So far round includes - Alchemist Accelerator SAFE, VC funds from Poland and Japan and a couple of angel investments but I can not disclose names, can just tell that it is connected with our advisory board. JB Strabel (co-founder and former CTO of Tesla) joined us also as an advisor recently and taking an active part in helping us with setting up production and tech development.

Vision:
I want to innovate the indoor farming field. Currently it's extremely inefficient even considering latest progress. Lighting and climate control are currently the biggest cost for any indoor farm and firstly, I see Laava Tech as an efficiency company. Secondly, within the next 5 years as data analytics company. I would be happy to tell more over the call or meeting.

Problem or Opportunity

Lighting and air conditioning consume over 90% of the total energy use of an indoor farm. The emergence of LED lighting has decreased lighting energy consumption significantly, but even with modern LEDs, lighting is still a huge cost for any indoor farmer. The industry is growing at a fast pace and looking to any cost savings and efficiencies, and in fact, vertical farming has proven to be >100 times more efficient per square foot compared to traditional outdoor farming. However, the technology in indoor and vertical farming is still at its infancy, and this is where we come in. Our technology combines the efficiency of LED lights with machine learning, AI, and IoT to produce optimized growing conditions for each plant, so that no excess energy is used. Plants can only consume a certain amount of light and anything extra is either simply lost energy or even damaging to the plant. Our technology brings the best of both worlds – saving energy and optimizing plant quality and yield.

Solution (product or service)

Most indoor farms use lighting systems that are inefficient, expensive, and both damaging for the plants and the environment. In addition, many current greenhouses use a blanket lighting solution for all plants, which results in sub-optimal yield and higher than necessary energy consumption. We have developed a new lighting solution - a combination of hardware and software to give each plant the optimal growing conditions. We can decrease energy consumption by up to 90% compared to less advanced systems, and up to 75% for LED lights systems due to the uniqueness of our software. Our technology combines the efficiency of LED lights with machine learning, AI, and IoT to produce optimized growing conditions for each plant, so that no excess energy is used.

We also decrease the amount of heat lamps produce - heat that is damaging to the plants and, again, inefficient in terms of energy usage. By giving each plant optimal lighting conditions we are also able to increase yield by up to 20%, depending on the plant, but we believe we can increase the number to 40% for some plants.

Lastly, our system decreases light pollution and provides more space to grow plants as it can be used vertically, horizontally, and underground.

We have several pilot customers already using the first generation of our system and decreasing lighting electricity consumption by more than 70%. However, the end goal for us is to build an AI- & IoT-based system that is self-learning and adapting to the ecosystem of a greenhouse automatically. The indoor farming technology market is expected to grow to $40bn+ by 2023 and we have a great opportunity to capture a large part of the market.

Competitors

Globally, the component market is controlled by a small number of large manufacturers such as Philips Lighting, Osram, Mitsubishi Chemicals, GE, Seoul Semiconductor, and Everlight. Many of these companies produce different types of LED grow lights of their own, but for now their main business in this space is to be a component provider.

There are a number of specialized companies operating in the grow light sector. Companies such as Heliospectra, Vividgro, Valoya, Fluence, and Illumitex are the ones spending on research and moving the industry forward.

All of whom are concentrating on increasing yield, not decreasing energy consumption, so we are opening up a new market. In fact, the more indoor farmers start using LED lights, the bigger the market for us because we can use our tech to lower their energy consumption.

Our technology decreases light pollution and can be used for vertical, horizontal and underground growing. Our software and plant growth database are something that no one else is offering and would have to invest a significant amount of time and money to be able to develop a similar solution.

Advantages or differentiators

Many of these things can be also adjusted by some competing lamps, but we have two specific advantages no one else is able to do. One has to do with how efficiently the power supply operates, meaning how efficiently power is converted to photons without being lost as heat. The second advantage is being able to manipulate the photon sequence sent by the LEDs to the plant and being able to accurately measure the optimal amount of light for each plant at each stage of growth. Again, if too much light is given, plants are not able to use it for photosynthesis and the excess heat is damaging to the plant, as well as inefficient use of electricity.

One number you can use to understand this advantage is μmol/joule, which for us is up to 3.3, whereas for example Philips has been able to reach only 3.1 μmol/j and most competitors are far below that value.

Business model

Innovation comes not only from technology itself but also from our business model. We provide Light as a Service and give access to hardware, software and database of the optimal growing conditions based on a monthly fee. That helps growers to have an easier access to a better technology and immediate ROI once they start using our system. Once we close the deals with grid operators we will be able to provide hardware for free to our clients which will help us to grow faster.

Money will be spent on

A runway of 18 months, covering in order of priority:
1. Hardware R&D and inventory, which is the major bottleneck in
acquiring paying customers.
• Web app for system control and data access
• IoT sensors to hardware, AI/machine learning development
according to product roadmap
2. Building the team to 30 people, covering sales, research, data science,
and R&D teams in order to further develop the software and
hardware
3. Sales & marketing in Northern Europe and North America

Team or Management

Won the competition and other awards

Winner of: Made It In China 2019 Guangzhou (gives us direct access to producers, government grant and discount for services), China. University Startup World Cup 2018 Copenhagen, Denmark. Tech Polar Bear Pitching Competition 2018 Oulu, Finland. StarterTech 2018 Tallinn, Estonia. EIT Food Accelerator 2019 Haifa, Israel.
- Awards: Poland Prize 2019 Warsaw, Poland. Included in the Startup Energy Transition 100 list by German Energy Agency and World Energy Council. Climate Innovation Exchange top-10 2019 Aby Dhabi, United Arab Emirates. Hello Tomorrow Deep Tech Pioneer 2018 and 2019 Paris, France
- Accelerators: EIT Food Accelerator 2019 Haifa, Israel - equity free accelerator supported by EU funding. Alchemist Accelerator 2018-2019 Silicon Valley, USA. Climate-kic Accelerator 2018 (1st stage) and 2019 (2d stage) Tallinn, Estonia - equity free accelerator supported by EU funding.
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