First Tap: Vahaa ‘Sustainable farming in the comfort of your home’
Note to myself; if you ever write a blog, write 2–3 posts before you start publishing. The last weeks have been crazy, yet here I am writing my first tap story during the Ramadan holiday.
The first startup I will be writing about is; Vahaa (meaning Oasis)
About Vahaa
Vahaa is an IoT-based, traceable, controllable smart farming startup. It sells one product; an indoor vertical smart farming box. After buying the box, you have to subscribe to a monthly seed delivery. The price of the box is 3,500 TRY (410 USD at the moment), while the monthly subscription is 55 TRY for the 12 months period. Also you can track the growth of your crop from Vahaa app.
There are different types of vertical farming systems; hydroponics (without soil), aeroponics (without soil and less water), aquaponics (farming and fishing), plantscapers (farming in the skyscrapers), etc. These systems are seen as promising as they consume less water than conventional farming systems and they can yield more products because of the physical layout and seasonality factor (that is you can plant every seed in every season in these systems).
Well, I can hear you saying what makes Vahaa special. After doing market research, I encountered lots of players in the vertical farming sector. But, they were all offering solutions on a B2B basis, while Vahaa aims to reach the individual consumers who want to make a salad with their own fresh crop. Most probably he/she lives in an apartment in the city and has a bachelor degree. At this point I feel like I do not have to say that he/she is white collar, you all knew it, right? My point here is that Vahaa takes an already available solution and presents it in another way. And I believe this may lead Vahaa to become a global trend.
The Business Model
As mentioned, customers make one time purchase of the farming box and then need to subscribe for every month seed delivery. Hence, when a customer buys a box, it becomes a life-long Vahaa customer.
The demand for the farming box is highly elastic, therefore I believe when the market is saturated, it will be hard to sell the box. But at that point, the subscription system and the seed portfolio will be more important, they can enhance their profitability with new seeds added to their portfolio.
The Sector
Unfortunately, some sectors were hurt immensely by the Covid-19, yet some saw a growth opportunity. One of them is the in-house planting sector, which was on the rise even before the pandemic. According to an article; ‘The UK’s Garden Centre Association deemed 2019 the “year of the houseplant” with impressive year-over-year growth, but the pandemic further pushed the industry forward. According to the plant retailer Breck’s, the gardening industry saw close to 9% in growth in 2020, and a survey says that more than 50% of businesses experienced a bump in profits over 2019.’
Moreover, this trend is likely to survive after the pandemic as humans have ‘biophilia’ (human’s innate need for connection with the environment). That means the urge to feel the earth is in our blood. No wonder that the more we industrialized and urbanized, we rolled up our sleeves to create more green spaces in our modern apartments. Another fancy term is ‘plant parenting’. It is simply used for the millennials who don’t want to take the responsibility of a dog or a baby, but furnish their homes with plenty of plants. In this kind of parenting, they have an air filtration, a reprieve from constant screen fatigue, and an indoor oasis when they can’t go outside. Plus they have a companion who listens without judgement. In return, they only need to water and maybe fertilize. Some experts suggest it is yet another example of the millennial generation’s shifting norms: offering a chance for caretaking when investing in a home and starting a family might be cost-prohibitive.
The Competition
Right now, they do not have a competitor in the B2C vertical farming industry. Yet, B2B players who envisaged the opportunity in the B2C sector may step up with their expertise to seize the market. At that moment, I am not expecting new players from Turkey, but from Western Europe especially Nordic countries who have experienced vertical farming providers.
Moreover, IKEA, Swedish furniture conglomerate, announced that it launches an indoor farm in its innovation lab. It would not be a surprise if they start selling hydroponic vertically stacked trays in their stores soon.
Right now, Vahaa is welcomed warmly by the Turkish customers since the stocks are all sold out on Vahaa’s website. According to my observation, their inventory stockout takes nearly two weeks and there is no information on when it will be renewed. It looks like they have problems with either production nor inventory. I hope they will fix these problems and launch their european operations soon. I believe they may be a huge success there as Europeans are highly environmentally conscious.
The Team
All startups have the possibility to become a failure even though they have a good management team. Yet, it is obvious that good management increases the chances to become a success.
Vahaa has four co-founders all graduated from reputable universities in Turkey and has corporate experiences for nearly 7–8 years. They are a small team, yet ambitious. I have seen their interviews on youtube. They sounded confident to me. They look like they know what they are doing and did the necessary market research.
Lately, the startup had an investment from angel investors with 14 Million TRY valuation.
The Future
As mentioned, the growth in the indoor planting is expected to continue. Also, the environmental wave is likely to keep its momentum post covid-19 as the concerns on health issues will give its place to the concerns on climate change.
The future of Vahaa looks promising and I cannot wait to see where it will be in 3 years. Will it be acquired or expand into new geographies with a new product portfolio? It is something we’ll see and analyze in this blog in the future.
Have a nice week-end tappers!
