IMM Investment strengthens 'Agritech' biz portfolio

gettyimagesbank

By Lee Kyung-min

IMM Investment Corp, a local venture capital investment firm, is strengthening its “Agritech” business portfolio by investing in a smart technology-enabled tomato producer in the United Arab Emirates (UAE) called Pure Harvest, widely known for its competitive product prices and stable distribution channels.

A combination of agriculture and technology, the term “Agritech” refers to businesses run by firms that utilize advanced technologies in agriculture. The entire production process ― from cultivation to harvest, processing and distribution ― is part of the Agritech industry.

The Korean investment firm is expected to model a value creation plan after Farm8, a Korean industry leader whose annual sales increased seven-fold from 10 billion won ($8 million) to 70 billion won in just seven years with an initial investment of 3 billion won.

IMM decided to invest $50 million in Pure Harvest, a producer of locally grown tomatoes using high-tech greenhouses overcoming challenges unsuitable to a year-round harvest of tomatoes due to weather conditions.

The growth potential for the UAE firm was highly assessed, because it was able to sell the fresh produce at prices up to 20 percent lower than those imported from Europe ― mostly France, the Netherlands and Turkey. Imported ones were costly due mostly to cargo freight charges needed to preserve freshness.

IMM expects the latest investment to result in a success equally stellar or even greater than Farm8, the Korean Agritech firm that gained popularity with a controlled environment optimal for cultivation without disruptions from weather and pests.

The firm's technologies utilizing the internet of things (IoT) and big data in farming began in 2008, when IMM joined with a 3 billion won investment drawn from venture capital funds.

Farm8 grew explosively with the financing of 16.2 billion won over the next few years, with IMM's stakes in the firm rising to 49 percent as of this year.

The growth was backed by a variety of market distribution channels including Homeplus, Lotte Mart and Costco. Other than large retailers, e-commerce operators Coupang and SSG as well as major fast-food franchises and convenience stores were among their partners.