Startup Street: This Startup Will Help You Set Up Soil-Less Indoor Farms
This week on Startup Street, an end-to-end farming solution that will help you grow crops indoors, without soil. The co-founder of Infosys has a tip for startups that are facing a funding crunch. And the taxman thinks the startup ecosystem is perfect now. Here’s what went on...
Barton Breeze Thinks Hydroponic Is The Way
Rows of greens neatly aligned under artificial tube lights. Automated systems providing nourishment and controlling the weather conditions. Fresh organic produce with minimal environmental impact.
That’s what bootstrapped startup Barton Breeze thinks is the future of farms in India. And for their founder Shivendra Singh, the new-age farmer will be not be based in rural areas but in cities.
“As more than 40 percent of the population is migrating from rural areas to urban, the challenge to feed the growing population will be faced in near future,” Singh told BloombergQuint in an emailed statement. “The need to import food derives from less production but with hydroponic farming, we can make our country food sufficient and save foreign exchange.”
Hydroponic farming is a method of cultivating crops, mostly indoors, without using soil. Instead, crops get nourished from a water solvent that’s rich in nutrients like nitrogen, potassium, phosphorus and calcium nitrate, among others.
The Gurugram-based startup is providing end-to-end services for hydroponics. It will set up hydroponic farms and fully-automated greenhouses and will be a supplier of all major components required for growing. The company, which even grows its own crops and sells them in the retail market, will act as a farm consultant.
“We grow 28 varieties of fruits and vegetables and develop our own 35 types of nutrition formulations in-house,” Singh said. “Our produce is available on major e-commerce platforms.”
Established in Dubai in 2015, Barton Breeze has expanded to India and Qatar. In India, the startup set up 16 farms. Each of them, on average, is a quarter-acre large.
“To make commercial sense one should go for minimum quarter-acre farm. Anything less than this will not give a good return on investment,” he said.
Such farms take Rs 40-50 lakh to be set up. Singh said clients of Barton Breeze had recovered their investment in at least 2.5 years. The startup claims to be 50 percent less expensive than its competitors, including UrbanKissan, Future Farms and BitMantis Innovations.
Interestingly, marquee clients of Barton Breeze are in automobile, electronics and retail industry. These include Hero Steel, True Leaf, Milkbasket, Naffaq, and JVL.
Barton Breeze is also offering a crop buyback plan for farmers that allows them to buy the produce at a fixed annual rate. It also trains farmers to improve crop yields.
The startup has generated Rs 1.8 crore in revenue over the past three years. And it’s looking at a top line of Rs 10 crore in the ongoing fiscal. Currently bootstrapped, Barton Breeze plans to approach investors at a later date when it wants to make additions to its service portfolio.
The next step for the startup will be to move beyond vertical indoor farming to equip residential and commercial buildings with automated terrace farms. They are also launching home kits that can easily fit in a balcony, allowing people to grow their own produce.
“We believe that urban India has been disconnected with farms, farmers and their agrarian roots,” Singh said. “Unless cities take control of their food systems, true sustainability cannot be achieved.”
Infosys Co-Founder Wants Startups To List
Infosys co-founder and Axilor Ventures Chairman Kris Gopalakrishnan made a strong case for startups to consider initial public offerings to tackle funding crunch and provide longevity to their fledgling enterprises.
“Startups are hesitant to do IPO, which is not difficult. My biggest issue with the startup ecosystem today is that they are not doing an IPO. Let the Indian public own these companies. They get the wealth being created,” Gopalakrishnan said while inaugurating the fifth edition of the two-day “Seeding Kerala” organised by Kerala Startup Mission.
“India has $2 trillion of wealth in private hands. Less than 1 percent is invested in the startup ecosystem. We need high net worth individuals’ money going into startups,” he said.
Gopalakrishnan advised startups to take minimum funds from angel, friends and families. They have to create a minimum viable product, and establish unit economics and profitable model, he said. “New jobs are created only if new businesses are created. We need to have the best milieu for new business for maximum job creation. Among the companies with the largest market capitalisation in the world today, except Amazon, rest of them employ very few people. There are significant opportunities today to disrupt any business.”
Taxman Says Budget Fixed The Last Irritant For Startups
With Finance Minister Nirmala Sitharaman proposing to ease the taxation burden on employee stock options for startups, the “last irritant” for budding entrepreneurs has now been removed, the Central Board of Direct Taxes chief said.
CBDT Chairman PC Mody said most of the issues pertaining to startups were already addressed in the previous budget and the remaining matter of ESOPs was resolved this time.
During their formative years, startups generally use ESOPs to attract and retain highly talented employees. ESOP is a significant component of compensation for these employees.
Currently, ESOPs are taxable as perquisites at the time of exercising the option. This leads to a cash flow problem for the employees who do not sell the shares immediately and continue to hold them for the long term.
According to new provisions in the budget, ESOPs of startup employees will be liable for tax in one of the three cases:
- Five years after exercising the option.
- The year in which they sell shares.
- The year when the employee leaves the company, whichever is earlier.
(With PTI inputs.)