Private Market Opportunity
Local Grown Salads - Investing in Sustainable and High-Return Indoor Farming
Today, we bring to your attention an intriguing private market security offering within the burgeoning AgTech sector: Local Grown Salads. This is not a direct endorsement or investment recommendation from Helix Research, but rather a presentation of an opportunity as conveyed by the issuer for your own due diligence.
Suitability Statement: Sophisticated investors, professional investors, or Qualified Institutional Buyers Only
Local Grown Salads is aiming to revolutionize food production through a decentralized network of indoor vertical farms. Their business model draws inspiration from the resilient and real estate-backed approach of McDonald's, wherein an SPV acquires land, buildings, and equipment for over two hundred indoor farms. Unlike traditional agriculture, this approach aims to tackle the inefficiencies, waste, and unsustainability of current global food systems.
Key Highlights of the Opportunity
Strong Market Potential: Local Grown Salads is targeting an $875 billion market with a 6.60% growth rate, driven by rising consumer demand for organic, healthy, and locally grown produce.
Disruptive Business Model: By focusing on local distribution networks rather than large retailers, Local Grown Salads aims for better pricing and healthier margins, capturing profits typically distributed across the supply chain.
Technological Edge: The company boasts a patent-pending seed cartridge technology contributing to lower capital expenditure (capex) and operational expenditure (opex) compared to earlier indoor farming models that relied on expensive stack systems and hydroponics. Their focus on high-margin crops like herbs, microgreens, and specialty leafy greens further enhances revenue potential.
Sustainable Financing: Local Grown Salads will finance growth by offering $100 million year-on-year through Green Bonds, using access to cheaper debt financing. The climate mitigation benefits and alignment with ICMA Green Bond Principles and EU Article 9 Dark Green Funds enhances the opportunity. These bonds are reported to be 3-5x oversubscribed, indicating a strong market appetite for such sustainable investments.
Attractive Returns: The current offering seeks $10 million in equity funding from Limited Partners (LPs) for 80% of the SPV. This equity is projected to be ten times, leveraged by Green Bonds annually. LPs are projected to receive a 165x return over 10 years, equating to a 67% Internal Rate of Return (IRR). Returns are anticipated from farm profits and property appreciation.
Asset-Backed Security: A significant portion of the projected returns are underpinned by solid, appreciating assets in the form of real estate (land and buildings) acquired by the SPV.
Addressing Key Challenges: Local Grown Salads differentiates itself from previous, unsuccessful indoor farming ventures by focusing on profitability from the outset, better CapEx, better OpEx, focusing on costs, patent pending improved growing technology, and integrating with existing local distribution infrastructure rather than competing with it directly.
The Investment Proposition
This offering presents an opportunity to invest in a company aiming to address critical issues of food security and climate change while targeting substantial financial returns. The strategic use of Green Bonds for financing and a business model focused on unit economics and asset ownership offers a potentially de-risked approach within the innovative indoor farming space.
Should you wish to learn more about Local Grown Salads and their securities issuance, you may find further information in their investor presentation here.
Disclaimer: Please note that Helix Research does not act as an advisor to Local Grown Salads or this securities issuance. This material is published as presented by the issuer for informational purposes only and should not be considered investment advice. Professional investors should conduct their own thorough due diligence before considering any investment in private market securities, which inherently carry risks including illiquidity and potential loss of capital.
We encourage you to review the provided materials carefully and conduct your own independent analysis.