The Edinburgh-based company was founded in 2013, saying it has harnessed decades of farming and engineering know-how “to create an agritech company with a vision to revolutionize the indoor growing market”.
Mr. Farquhar joined IGS as CEO in November 2017, but first went to hotel/restaurant school. This industry “wasn’t for me, so I took the Queen’s shilling and joined the army”, then graduating from the Royal Military Academy Sandhurst and “accidentally” finding my calling as leader.
In 1990 he returned home to Scotland, started his first software company and has since run, invested in, built and sold “or sometimes lost” various start-ups, mostly in the business software space.
2016 saw the sale of private equity (PE) backed Workplace Systems at a significant investment multiple and he retired. The following year, a PE fund partner asked him to look into a research and development (R&D) project.
“Having never heard of vertical farming, I was reluctant at first, but…when I saw the site, I was blown away. I called old friends who found it equally appealing, helped me raise Series A’s and Series B’s of the world’s leading agritech venture capitalists – and here we are!”
Can you explain what your role as CEO is and why you came out of retirement to join the company and help advance its goal to help feed the world and fight climate change?
My role is to make sure everyone is very clear on our long-term vision, our strategic position, our three-year plan and our mission for the current year. As a chef by training, married to a chef, we are a family of foodies and we care about what we eat. As a mountaineer, I am also passionate about the environment, so these two obsessions reflect exactly the good that our technology can bring to the world.
Global food supply chains are just that: global. In fact, 72% of everything we consume is grown in a different region or continent and then shipped. It’s not sustainable. As a result, agri-food and transport are the two most polluting industries on the planet.
We simply need to grow more of our food much closer to home and in ways that reduce emissions. This cannot be done with traditional methods alone, due to local weather and climate restrictions. We can positively impact some of this by replacing imports of certain foods and offering existing farmers the option to grow their starter plants on-site inside vertical farms powered by IGS.
Can you elaborate on how vertical farming and the wider agritech industry complements existing farming methods…for example, you have highlighted how IGS can help extend the grow day to 6pm, all year ?
We believe very strongly in the hybrid model described above: start in the vertical farm, then plant in a field or under glass or poly tunnels. It’s not one or the other – we’re not competing with farmers.
We can provide them with a whole new set of tools. We are starting to work with our fellow NFU Scotland members to tackle the combined challenges of food security and climate change, while creating jobs and helping to diversify their businesses, including animal husbandry, dairy farmers and foresters .
The ability to create perfect growing season weather for 18 hours a day dramatically reduces the time it takes to grow crops until harvest time. For the first time in the 10,000 year history of agriculture, the farmer is master of the weather.
At COP26, IGS announced both a partnership with Therme Group to create large-scale urban farms at the latteraquatic wellness sites », and a Series B funding round which later closed at £42.2m and was hosted by Prime Minister Nicola Sturgeon. How do these milestones help accelerate business growth?
Therme is a global IGS customer with sites committed to deployment in new urban destinations across Europe, North America and East Asia. Beyond that, they will grow plants for use in the wellness-focused dishes available in their restaurants, and their health and beauty products, extending the application of our technology. The range of crops they will grow will also broaden our overall portfolio.
Indoor farming company IGS strikes new deal
Our Series B fundraising – concluded in November last year – allows us to complete recruitment for the wide range of skills we need at IGS (nearly 60 different roles and counting) but also capacity. 2021 has seen a massive increase in our sales, we are 50% over budget and we now have approximately 200 grow towers – the precisely controlled vertical farms we use to grow crops – to deploy across four continents.
In addition, we have a major commitment to investing in R&D on behalf of our customers and developing leading edge best practices in engineering, crop science and horticulture.
How has IGS been affected by the pandemic and what is your biggest challenge going forward? And some research has highlighted the reluctance of consumers to fully agree with growing food through less conventional natural methods – how can this be addressed?
National lockdowns due to the pandemic, combined with Brexit and the invasion of Ukraine, have driven up prices and slowed manufacturing, while affecting supply chains and limiting the availability of components such as the steel. It has been more difficult to visit export markets, bring potential customers to Scotland to experience our technology first hand, deploy products, attend live events, recruit and open offices around the world.
The question of consumer reaction is interesting: our partners at the James Hutton Institute [an Invergowrie-based research organisation focused on the sustainable use of land and natural resources] have a social science group whose research does not suggest a groundswell of negative backlash.
The US Department of Agriculture has declared that foods grown this way are organic: a new standard is being proposed in the EU to call them “post-organic”. In Japan, China and other highly urbanized countries, consumers pay a premium because they perceive food grown outdoors as much more likely to be polluted. We do not use or plan to use techniques such as genetic modification – because we control the climate for our farmers, it is simply not necessary.
IGS said it is continuing its global growth strategy – how is it progressing, for example, the company has made announcements regarding developments in Germany, Australia and the Middle East…
Our job is to support, empower and empower local farmers, wherever we can. When I took over the business, my first decision was that IGS would never grow crops for commercial sale, only for product or crop development. The investment required to develop your own technology on a serious international scale is simply too great to generate economic or shareholder returns.
We are now sought after by a growing percentage of well-established producers with a significant regional market share. In Germany, we work with real estate developers, sustainable asset investors and existing producers. In Australia, we are helping a client launch the country’s first fully solar-powered vertical farm, and in the Middle East, our first client is a large tomato grower in the United Arab Emirates.
I would also love for us to help ensure food security in more of Asia, Latin America and Africa.
More generally, what are the company’s main objectives over the next two years – as IGS is branded as a “futurecorn” [fast-growing businesses set to achieve a $1 billion ($764m) valuation]…?
Our goals for now remain firmly focused on delivering for our customers, with growing teams doing this wherever we sell trusses. Of course, we want to continue to develop our sales, our geographical coverage, the range and quality of crops, thus contributing to guaranteeing food security and combating climate change.
Maybe IGS can become a “unicorn” one day and we have extensive employee ownership, but our goal for now is to enable our team to achieve the goals we share with our customers, partners and investors.
You say your family comes first in how you run your life and the decisions you make – something you don’t often hear from CEOs…why did you take that position and how do you approach the leadership ?
With humility, respect and gratitude. It really takes 15 players to score a try, and one of them is made captain: for me, that’s just another role in the team. If I’m ever the smartest person in a meeting, we have a serious recruiting problem.
I also believe in management by moving, making myself available and listening. Celebrating success is a great way to boost morale, but I encourage people to question what they see, raise concerns, and highlight things they disagree with.
As for the family, mine is my foundation and therefore I consider it my duty to put it first because without it I could not do my job: everyone at IGS knows this because I am open to about it, and they also know that I imagine they will feel the same or have their own version of it. To me, that’s real leadership.