GREEN LABS will focus on bolt on acquisitions this year
By: Green Labs
Tags: Farming, Platform, Agriculture, Agritech, Farmers

29 JAN 2021 / Mergermarket

GREEN LABS, a South Korean digital agriculture platform developer, will focus on acquisition opportunities in Korea this year to strengthen its leading position in the digital agriculture platform market, co-CEO Shin Sang-hoon said.

The Seoul-based company is currently reviewing two to three targets, he added. It is eyeing targets engaged in agricultural businesses such as agri-logistics companies, IoT developers in smart farming, agricultural film manufacturers, agriculture pipe manufacturers, seed companies, fertilizer companies, pesticide companies, and others involved in relevant sectors, he noted.

The ideal deal value is below KRW 10bn (USD 9m), Shin added.

For future bolt-ons, it would finance the deals through its cash, he said.

GREEN LABS recently acquired two domestic firms,Happy Farmer and RUNean, Shin continued. Happy Farmer, acquired in November last year, specializes in processing and distributing agricultural products. RUNean, acquired in January this year, estimates the cost of farmhouse construction via automatic algorithms and databases, according to the company’s press release.

Additionally, the company plans to expand its IoT-based smart farming service to East Asia and Southeast Asia. Thus, it is looking for investors from these regions for its next funding round, the CEO continued.

The ideal investors would be local investors that have solid networks with agriculture and ag-tech businesses, as they can help GREEN LABS connect with relevant industrial partners and customers, the CEO added.

The proceeds will be earmarked for R&D and to hire employees including data engineers and computer engineers, he continued.

The firm remains receptive to investors’ approaches to this end, but details have not been determined as it just closed a KRW 20bn Series B fundraise this month, Shin noted. GREEN LABS is in a position where it does not need to raise money right now, but is in a comfortable position to do so at an appropriate time, he added.

Organic growth on track

While the company will focus on inorganic growth this year, it will also seek organic growth to strengthen its dominant position in the country’s ag-tech market, Shin said.

The number of users of its Farm Morning app has increased exponentially, and the company expects to meet the target of securing more than 100,000 users by 1H21, the CEO noted.

Given this rapid growth rate, it expects all domestic farmers to use the app by 2022, he added. Farm Morning app is a digital farming platform that GREEN LABS launched in July last year.

GREEN LABS uses data analytics to help farmers cut costs, increase profitability and distribute their crops. It offers objective farmer-driven information on seeds, fertility, soils backed by the company’s agronomic data. Additionally, its users are given data-backed recommendations as to how to create the perfect environment for the crops to grow, Shin said. With its central control panel and IoT devices installed in their greenhouses, farmers can view and change the settings of the greenhouses, even if they are away.

On the digital front, GREEN LABS plans to provide advanced B2B IoT-based smart farming services to agricultural companies by the end of this year, as part of its efforts to help farmers maximize their profits, the CEO continued.

GREEN LABS expects to record sales of KRW 100bn this year, up from sales of KRW 25bn last year, Shin said.

The founders including Shin, Ahn Dong-hyun and Choi Sung-woo, hold a majority stake, followed by, domestic VC HASHED, which had participated in the Series B fundraise, he continued.

The company’s overall business has not been impacted by the novel corona virus outbreak. Rather the COVID-19 outbreak has created a positive atmosphere as smart farm technology has garnered attention from investors, he said.

Founded in May 2017, the company had 160 full-time employees as of 26 January, Shin said. GREEN LABS’ global peers include California-based Farmers Business Network. It is the first digital agriculture company in South Korea, he noted.

by Haejin Choi in Seoul

Write to Haejin Choi athaejin.choi@acuris.com