Gartenzwerg
Fully automated and nicely designed indoor gardening systems. Your personal farmer on the kitchen table.
- Location
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London,
United Kingdom
Categories: Food & Beverage Mixed Digital/Non-Digital B2C
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Investment
sought: - £50,000
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Equity
offered: - 5.88%
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Investment
amount: - £117,352
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Valuation
(pre-money): - £800,000
Idea
Introduction
Does this feel familiar? You buy one of those basil plants, because you love the idea of having fresh food from home. Soon you find out that it is not that easy to take care of it. It can be hard to know when your plant needs what. Even if you try, no matter what you do the plant eventually gives up on you and dies.
So, what if you had a little garden helper doing exactly that: Taking care and growing food for you year round?
Gartenzwerg, the German word for garden gnome, is a fully automated and nicely designed indoor garden with which you can have small nutritious fruit, vegetables and herbs anytime, right from your home.
Using a method called hydroponics, our smart technology can grow food with more nutrition and 3x faster whilst reducing water usage by 90% comparing to soil based planting and it aims to mimic the perfect growing conditions by controlling pH and water level, light intensity, temperature and humidity. Gartenzwerg does the work and in case your plants need anything, the little helper will communicate with you over an app to let you know exactly what to do.
Intended impact
Gartenzwerg was born from a common personal frustration.
At first the founders had the idea for Gartenzwerg during one of their MBA classes in China where they learnt that NASA was growing food in space using a method called hydroponics.
Both loving fresh food, they started discussing over some dumplings and beer how awesome it would be to have easy-to-use hydroponic indoor gardens for home.
From there, they decided to build a product that would enable people to grow food effortlessly, no matter the living environment, available time or knowledge with the goal to give anyone around the world access to nutritious fresh food.
Substantial accomplishments to date
Gartenzwerg has been running for about a year. The team has secured seed capital in October an just started their Entrepreneurial Spark accelerator programme in London. With minimal spend on Marketing, Gartenzwerg has achieved good traction amongst all its channels reaching followers on social media and waiting list subscribers totalling over 610 combined.
The seed capital secured to date is a £100,000 convertible loan with a direct investor which will convert into ordinary shares immediately prior to the next round. The price for conversion will be based on a pre-money valuation of £900k, and this convertible debt has been taken into account in the pre-money for this round. In addition, the company currently intends to offer this investor the right to subscribe for a portion of the next round at a discount. If these rights are taken up Seedrs investor will also be given the opportunity to pre-empt on any next round on the same terms
Monetisation strategy
Gartenzwerg will make money via three revenue streams: sales of devices, sales of supplies and tools (online store) and our membership plan called Gartenzwerg Prime.
DEVICES
Customers will be able to purchase any model of Gartenzwerg for £120, sold through our website, social media, retailers, partners and events;
SUPPLIES
Through our online store, we intend to sell new seedlings, pH regulator, nutrients, indoor gardening tools and items for customisation like decorative stones and different wooden back panels. Prices are likely to range from £3 - £15.
GARTENZWERG PRIME
We aim to build long-term customer value by offering a Prime membership where customers pay £15/month and have a Gartenzwerg and monthly supplies included. Prime members will also have other perks like discounted gardens and access to exclusive offers and events.
Use of proceeds
Having successfully built and tested a Gartenzwerg prototype, the team is now focused on getting the product ready for mass production and on growing their research capabilities.
The proceeds will be used for the following:
• New hires for plants research and marketing (36%);
• Production of Beta-units for final tests (10%);
• Kick-Starter campaign + customer acquisition UK and EU (27%);
• Final app development and website integration (18%);
• Product certifications for mass-production (9%).
Market
Target market
The vertical garden industry is expected to have CAGR of 31.6% by 2025. As of 2012, one third of Brits are already growing their own food. However, for the other two thirds the main hurdles that stop them are a lack of time, space or knowledge. Gartenzwerg takes these hurdles away.
We believe that the indoor gardening market is quite untapped, especially in Europe. Hence there are few official references. To get a good understanding on the opportunity we’ve broken down the market in a top-bottom approach.
We are operating in the organic and ethical food segment which is worth £9B in the UK (as of 2015) and constitutes 8.5% of total household food sales. We are targeting those of the two thirds of Brits who do not grow their own food but like organic and ethical products.
Characteristics of target market
Minimum Viable Segment - Fresh Food Lovers
Love the idea of having fresh home-grown food, but feel frustrated because they have little space, knowledge or time. They care much about where food is coming from and how this affects their health.
Secondary Segment - Hobby-Cooks
Value much to have everything in their kitchen including their favorite spices, herbs and ingredients always at hand. Don’t mind to spend extra on food and love to experiment.
Secondary Segment – Conscious Cook
Cook often not just for them, but for others and want to provide fresh food for their family and loved ones. They care much about nutrition and variety. For young families, educating about food plays a strong role too.
Marketing strategy
Our target market is very active online and offline. They research information about recipes, ingredients, nutrition and food trends and then go and test new dishes, restaurants and products. Based on this information, our route to market strategy focuses on paid & owned social media, SEO, Influencer Marketing, PR and events.
To make sure we do not only reach out to potential customers but also capture them before our product launch, people can join the waiting list on our website.
The Kickstarter campaign which we are intending on launching after this raise will be our first sales-channel to fund production and simultaneously to serve as platform to maximise market awareness.
Competition strategy
There are several smart indoor garden start-ups around the world but we believe that none of them have been able to unlock this untapped market. We see this as validation for the trend and demand existing, but we believe the existing products don't speak to the target audience.
Our analysis shows that our competitors focus primarily on the technology of their smart indoor-gardens and a more futuristic branding.
Although Gartenzwerg is a FoodTech solution and the only indoor-gardening system to our knowledge that will run completely automated with a natural design, our main focus is on the experience of growing food as opposed to the technology inside it. Our bottom up research shows this is what our customers are looking for.
This is reflected through the Gartenzwerg character as the little helper, our communications strategy and the design of our products.
To give a reference, Gartenzwerg’s main direct competitors are Click and Grow, Aerogardens, Agrilution and Tregren.
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