the joy and satisfaction of eating what you grow Our Business Plan Visit UrbanGrange.com for more information. Karen Ng, CEO | Samuel Tan, CMO | Yap Huiying, COO | Jefferson Soh, CTO | Josiah Ee, CCO | Yeo Zhi Quan, CFO UrbanGrange [Ur-buhn Greynj]
Nov 15, 2014
the joy and satisfaction of eating what you growOur Business Plan
Visit UrbanGrange.com for more information.
Karen Ng, CEO | Samuel Tan, CMO | Yap Huiying, COO | Jefferson Soh, CTO | Josiah Ee, CCO | Yeo Zhi Quan, CFO
UrbanGrange[Ur-buhn Greynj]
value & innovation
What are we selling?grow what you eat, wherever you live.
Fluid cleansing device Herbs &
spices
Cherry tomatoes & small fruits
Potatoes & underground produce
Water pump
Leafy Vegetables
Power-saving grow lights
Lettuce and Salad bar
Integrated smart indoor fresh produce growing
system
“there’s nothing else FRESHER.”three converging needs
Food Concerns
• Food Quality, Security and Safety
• Food Desert
• Health Concerns
Emerging
Agri-tainment
• Emergence of Farm Resorts
• Edu-tainment
Urban EcoDesign
• Integration of greens into concrete jungle
• Ecological benefits
1. Rising FOOD concernsIncreasing interest in fresh healthy quality food
FOOD DESERTS
Over 1 billion live in Food Deserts
“Urban areas where affordable & healthy food, especially fresh groceries, are inaccessible.”
• Overpriced poor quality food• Inaccessibility to fresh food • Prevalence of Nutritional disease
$866 MILLION UNMET DEMAND FOR LOCAL FRESH PRODUCE IN NYC • Adopt healthy lifestyle• Tainted centralized food distribution
system
1. Rising FOOD concernsIncreasing interest in fresh healthy quality food
“Michelle Obama starts White House vegetable garden” – New York Time
Her hope is to educate children about locally
grown food, inspiring them to eat healthier and encourage their families and community to follow suit.
2. AGRITAINMENT“Annual agri-tourism revenues range from $20 million in Vermont to $200 million in New York.” – Time, 2008
NO RECESSION FOR AGRITAINMENT“Our informal survey of agritainment farms found that the vast majority had increased sales this fall. “ - White Huchinson Consultancy
3. Urban ECODesign
Urban Environment Eco Design
Innovate. Growing what you eat.
Home-centric Design
High-yield
Multi-Crop
Customizable
Modular
real benefits. true solutions.The Innovation
FARMING MADE EASY• No farming knowledge required
SUSTAINABLE HOME FARMING• Multiple cropping • 10 kilograms of produces / month in 0.8 m by 0.5 m • 13 months to break even cost
samuelmarket identification
market identification
market - the fresh food peopleConsumers who value fresh quality food
TOTAL ADDRESSABLE MARKET: Expenditure
on Fresh Produce by Urban Cities in USA.
US$ 45 Billion
Average per capita expenditure on vegetables and fruits per week: US$ 4.00
81.45% of 306 million Americans live in urban cities.
market - the fresh food peopleConsumers who value fresh quality food
TOTAL ADDRESSABLE
MARKET: US$ 45 Billion
TARGET MARKET:
Health Conscious & Quality Food Consumers
US$ 11.7 Billion
“Food packaging and convenience which used to be all the rage, are being quickly replaced by food lovers’ desire to know where their food comes from and how to prepare it in the simplest, most natural way possible.”
5 Food Trends: flexitarianism, locally grown food, functional food, organic food, slow food
The Market is growing very quickly at a rate of 23%
market - the fresh food peopleConsumers who value fresh quality food
TOTAL ADDRESSABLE
MARKET: US$ 45 Billion
TARGET SEGMENT:
Chicago, Detroit,
Philadelphia, New York.
Middle Income Households.
US$ 750 million
Even in food desert, not everyone is poor. For e.g. in Chicago food deserts:• 63,355 or 31% have an annual income of $50,000 or more• 29,561 or 14% have an annual income of $75,000 or more• 14,194 or 7% have an annual income of $100,000 or more
List of United States cities by population
Rank City State Population Density (per
mi2) 1 New York City New York 8,274,527 26,4042 Los Angeles California 3,834,340 7,8763 Chicago Illinois 2,836,658 12,7524 Houston Texas 2,208,180 3,3725 Phoenix Arizona 1,552,259 2,7826 Philadelphia Pennsylvania 1,449,634 11,2337 San Antonio Texas 1,328,984 2,8088 San Diego California 1,266,731 3,7729 Dallas Texas 1,240,499 3,470
10 San Jose California 939,899 5,11711 Detroit Michigan 916,952 6,85412 Jacksonville Florida 805,605 97113 San Francisco California 799,183 16,63214 Indianapolis Indiana 795,458 2,16315 Columbus Ohio 747,755 3,38316 Austin Texas 743,074 2,61117 Fort Worth Texas 681,818 1,82818 Memphis Tennessee 674,028 2,32819 Charlotte North Carolina 671,588 2,23220 Baltimore Maryland 637,455 8,059
US TOTAL (avg)Selected Cities
306,168,000 633213,477,771 6% of urban popn
Customers. consumer behaviourOur target profile
They are families. Homemakers. and of course, mothers.
…who make buying decisions based on price (value), nutritional benefits and ease of consumption.
Current issues include travel distance, food quality freshness and storage issue. Safe food increasingly difficult to differentiate.
Furthermore, underserved needs include interest in agritainment, lack of arable plot in apartments. Educate children about home grown food and healthy eating habits.
Competition. the Growers.DIRECT competition
Aero Grow• Aimed at hobbyist gardeners.• Countertop design• Small aesthetic pleasing• US$200++
Omega Garden• Large scale• High production rate• Bulky (industrial focus)• Professional• Expensive• US$2000++
AeroGarden Pro200
OmegaGarden Volksgarden
OmegaGarden Carousel
Competition. the Grocers.INDIRECT competition
Veggie Mobile Project
Community Supported Agriculture and local producers
Gourmet Groceries Stores• Walmart Organics• Safeway Supermart• Wegman’s Grocery
future market - skyscrapersAnd schools and commercials. (B2B)
Rooftop farming and expansion of integration of edible crops into Urban Architecture.
Current experiments and future plans: Left - Rooftop gardening (Earthbox), Right – EDITT Tower SIngapore)
product & services
FreshCube (Standard)Product features
FreshCubeTM Micro-farming system Specifications• Dimensions: 750 x 600 mm x 1.80m• Average water consumption,
3.2-4itres/day.• 60 growing pods• High-powered lighting system, 4 x 40 W • Circulating pump for recycling water and
nutrients,115W • Break Even – 13 months*
(based on a family of 4)
1800mm
Supply container for nutrients
600mm750mm
Lights
Trays for growing plants
Circulating Pump
TRAY Suggested Crop Species
Tray 1 Sweet Basil, Chives, Garlic Coriander, Curly Parsley, Lavender, Rosemary, Dill, Fennel, Oregano, Sweet Majoram, Mint, Sage, Thyme.
Tray 2 ButterHead Lettuce, Romaine Lettuce, Crisphead Lettuce, Iceberg Lettuce, Chinese Lettuce, Spinach, Celery.
Tray 3 Cherry Tomatos, Egg Tomatoes, Egg Plant, Red Chillies.
Tray 4 Iowa Potatoes, Red Onions, Baby Carrots, Japanese Sweet Potatoes, Alfafa sprouts.
Suggested Vegetable CropsDiversity and quality + freshness
• A supply chain community
• A supply of heritage/heirloom plants and seeds.
Our ServicesBeyond the hardware
Required Ingredients:Lettuce (Iceberg / Romaine)Cherry TomatoesRed OnionsFresh CeleryCroutonsGrilled Chicken BreastVinaigrette DressingBlue Cheese Cubes
A Suggested Day Serving (by FreshCube)Garden Salad Recipe
the product Architecture the standard freshCube design
market & sales
FreshCubeTM - Grow what you eat The family companion
ideal indoor garden unit for families encouraging healthy food
consumption decent food portion for households education tool a family product : cultivate strong
family bonds
Distribution ChannelsWhere FreshCubeTM is made available
Phase IE-Commerce• Official Website
Phase IIDealers and Retailers• Home Appliances
and Gadgets Concept Stores/Retailers
• Agritainment Farms• Community
Supported Agriculture (CSA) Groups
Phase IIIDistributors to
'Big Box Retailers' such as Wal-Mart,
Costco, Home Depot etc.
Channel StrategyChannel map – managing channels
Inform
Interact
Transact
Deliver
Service
Official Website(UrbanGrange) UrbanGrange
Phase I
Official Website(UrbanGrange) Authorized Retailers
UrbanGrange
Authorized Retailers
Official Website(UrbanGrange) Authorized Retailers
UrbanGrangeAuthorized Retailers
Authorized ‘Big Box’ Retailers ( E.g.: Wal-Mart, Home Depot etc.)
Phase II
Phase III
Low entry price to attract new customers Aim to increase market share/sales volume
Penetration PricingFarming made affordable: High yield, Low cost
The “Push” StrategyNew product acceptance, sales, positioning, creation of brand equity
Strategic Alliances
Marketing Kit and Collaterals
Reach Out Programs : Demonstrations & Exhibitions
Tagline: “Grow What You Eat”
Money-Back Guarantee: 30 days
Free-Trial Period( First month)
Create consumer demand Convince retailers and distributors to carry the
product hence “pushed” to the consumer Consumer promotions and advertising
STRATEGIC ALLIANCES WITH RELATED STAKEHOLDERS Reach out to our first target market Install demo-units at no cost for the first 3 months Create awareness and understanding: aim to achieve initial sales
Initial Sales Strategy reaching out to the first customer
(I) Community-Supported Agriculture (CSA) Groups
- A socio-economic food distribution community- Partner: Angelic Organics, largest CSA in Chicago
(II) Agritainment Farms- Partner: Siegel’s Cottonwood Farms
(for families and gardening enthusiast)
(III) Gourmet Restaurants- Partner: Frontera Restaurant Chain
( 3 branches in Chicago)
MARKETING KIT AND COLLATERALS Product Demo Video Official Website
REACH OUT PROGRAMS: DEMONSTRATIONS & EXHIBITIONS Chicago Food Policy Advisory Council
(CFPAC) Annual Food Summit Chicago Food Desert Campaigns Health & Wellness Events in Chicago Education Institutions:
(First target: Chicago Vocational Career Academy)
Initial Sales Strategy reaching out to the first customer
UrbanGrange[Ur-buhn Greynj]
Competitive Advantage
Sustainable Competitive Advantage
Protecting of Proprietary Technologies:Patent Filing, Trade Secret, Exclusive Tech licensing
Network Externalities: Peer-to- Peer groceries trading
Control Resources: Sole Distributorship for blue potato seeds and dwarf papaya seeds
Control of Key Resources. Heritage and Hybrid seeds
Tainung No.6 (Ju Yu): Released in 1998, dwarf, low bearing, adaption for nethouse culture, high yield, flesh is beautiful deep red when fruit ripe, flesh thickness, more than 400 grams pear fruit.
Groceries redistribution networkCommunity produce exchange/trade system
• By community, for community.• Veggie and Fruits Redistribution network system
Operation & Expansion
Manufacturing•Produced in GuangDong, China
•Shipped to warehouse in Chicago, IL, USA
Distribution•e-Commence •Dealers & Retailers
•Distributors
Service•UrbanGrange Community
•Supply Chain Community
How will it come about?Manufacture. Distribution. Service Provision
How will we make it happen?Execution. First year detail timeline
Year 2009 2010Month 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
Phase 1 - Strategic Plan
Phase 2a - Market Research
Phase 2b - Develop Business Plan
Phase 3 - New Product Dev (R&D)
Phase 4 - New Product Dev (Pilot)
Phase 5 -Business Development
Phase 6a - Setup Infrastructure
Phase 6b - Promotional Campaign
Phase 7 - Commercialization
What other products will we make?Product expansion.
Jun 2010 - Health Food Market
Oct 2013 - Corporate Agriculture
Where will we go?Geographical expansion.
Jun 2010 - Chicago
Jan 2012 – East USA
TimeLine:
Financial Plan
Financial Plan. Business ModelMultiple Revenue Streams
7000 Units
$300/ Unit
30800 Units
$30 /Unit
700 Units
$45/ Unit
22400 Units
$35/ Unit
350 Units
$150 / Unit
Transactions
$0.50/ Transaction
350 Service Call
$100/ Service Call
Total Revenue$3.9mm
(SGD5.9mm)
FreshCube™Revenue$2.1mm
Seeds Revenue$0.95mm
Nutrient Revenue$0.78mm
Addon Revenue$0.05mm
Trading Commission
Revenue
Maintenance Revenue
$0.04mm
Regular Seeds(with pods)
Revenue$0.92mm
Premium Seeds(with pods)
Revenue$0.03mm
* Year 2 Projections
Financial Plan. Business ModelCost Drivers
Total Cost$0.81mm
(SGD1.2mm)
Cost of Goods & Services
R&D$0.36mm
Professional Services
$0.10mm
Facilities$0.04mm
Payroll$0.18mm
Marketing$0.09mm
General Admin$0.04mm
Production Cost
Inventory
Shipping
Office Space
Warehouse
Online Advertising
Promotions
* Year 1 Projections
Financial Plan. Business Model
UrbanGrange
FreshCube™
Money
RevenueCost Drivers
Consumables
Money
Services
Money
Product Refinement
Money
Work
Money
Production
Money
Facilities
Money
Add-ons
Money
Customers
Production
R&D
Staff
Infrastructure
Financial Plan. ProjectionCritical Success Factors
• Low cost of production enabling higher margins• Recurring revenue from complimentary consumables• Network effect created from peer-to-peer crop
exchange
Financial Plan. Projection$49mm Revenue by 2013
Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 $(10,000,000)
$-
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
5-year financial projections
Revenues Net income Free cash flow
• $49mm (SGD74mm) revenue by 2013
• $20mm (SGD30mm) net income
• $10mm (SGD15mm) free cash flow
Financial Plan. Funding & EquityRequired Funding Size of $1.09million
Funding required and equity offered
Post-money valuation 3.19 $MMFunding required 1.09 $MMEquity offered 34%
• Founder’s initial contribution of $90K (SGD136K)
• First round funding required is $1.09mm (SGD1.65mm)
• Second round funding of $2.57mm (SGD3.88mm)
• Equity offered - 34%
Financial Plan. Use of Proceeds
22%
5%
12%
11%
43%
6%
Fund Allocation
Manpower
Infrastructure
Professional services
Marketing and BizDev
R&D
Other SG&A
R&D and Product Development Phase in Year 1
Financial Plan. Exit strategy & ROI
• Primary Strategy: IPO• Alternative Strategy: Exit through acquisition
Exit valuation and ROI
Projected sale price of company 150 $MM Exit multiple of earnings 8 times earnings Investor ROI 39 times investment
IPO by 2013
OUR UrbanGrange teamThe Advisory Team
Douglas AbramsPrimary advisor. Owner of Parallax Capital Management, a funds management company based in Singapore. Adjunct Associate Professor at the National University of Singapore. CEO of First Meta, CEO of Expara IDM Ventures
Allan LimAdvisor, CEO of Alpha Biofuels Pte Ltd, awarded Spirit of Enterprise Award by SR Nathan. Mentors for youth start-ups.
Tan Hai WoonAdvisor, Tan Hai Woon is the CTO of Alpha Biofuels Pte Ltd, a local biodiesel producer.
Teo Ai LingManager of Oh’s Hydroponics farm in Singapore. 10 years experience in managing one of Singapore’s largest hydroponic farm.
Grow what you eat.
Food Concerns
Emerging
Agri-tainmen
t
Urban
EcoDesign
Funding Rqd: US$1.09 m (SGD1.65m)
Investor ROI: 38 timesTOTAL
ADDRESS: US$ 45 Billion
TARGET Mkt: US$ 12 Billion
TARGET SEGMENT
: US$ 750 million
“We enable people to grow their own fresh produce in the urban environment, promoting healthy eating, and educating children, in a sustainable, innovative and cost effective method.”
SUMMARY