By Yousef Saba
DUBAI, March 15 (Reuters) - UAE agriculture technology
start-up Pure Harvest Smart Farms has raised $50 million via
sukuk, or Islamic bonds, the first time an early-stage company
in the region has secured venture capital through debt on the
market, its chief executive said on Monday.
It also raised $10 million in equity capital in January,
founder and CEO Sky Kurtz told Reuters.
The combined $60 million capital will be used to build two
"high-tech hybrid greenhouses" in the United Arab Emirates to
produce tomatoes, currently the firm's main product, and leafy
greens in year-round warmth and sunshine.
The financing will also allow the company to retrofit an
existing facility for berry production in the UAE and build a
tomato production facility in Saudi Arabia in partnership with
the National Agricultural Development Company (NADEC) 6010.SE ,
20% owned by Saudi Arabia's Public Investment Fund.
Pure Harvest's overall production will be around 75 metric
tonnes per week by June, up from between 10 and 14 tonnes now,
Kurtz said.
The $50 million three-year sukuk issue has a coupon of 8%,
with 7% payment-in-kind at maturity. It also has embedded
warrants that investors can exercise, subject to certain events,
to take equity in the company.
The company aims eventually to export its produce, but Kurtz
said it had a "long way to go" before it covers imports in the
Gulf, where around 80-90% of fresh produce is currently
imported.
The company is planning to return to capital markets in less
than three months with an instrument to complete a 39 million
euro ($47 million) multi-crop project in Kuwait.
Pure Harvest has raised total commitments of $216 million,
of which $151.5 million is in various forms of debt and the rest
is equity, including incentives from the Abu Dhabi Investment
Office (ADIO), which Kurtz said were "substantial", without
specifying.
Pure Harvest expects to enter markets outside the region
next year or in 2023 and is in discussions to build projects in
Southeast Asia in partnership with a wealthy individual from the
Philippines, Kurtz said.