As part of our series profiling women making waves in the field of cleantech innovation, the Grantham Institute’s Linsey Wynton chats to Kate Hofman, Founder of GrowUp Farms (which progressed through Undaunted‘s accelerator, now known as The Greenhouse, back in 2014),and CEO and Co-Founder of Pesto.
After studying for a Master’s in Environmental Technology at Imperial College London, Kate Hofman founded GrowUp Farms – the UK’s first vertical farm selling bagged salad to a UK supermarket.
She’s a fellow of the Barclays Unreasonable Impact Accelerator, a network focused on scaling socially impactful solutions for a more inclusive economy and cleaner future. And she’s recently launched her second startup, Pesto, to support food manufacturers improve their margins through supply chain optimisation and AI-driven profitability analysis.
Kate knows only too well that the food industry is under intense pressure, responsible for 25% of global carbon emissions and adding £268 billion of cost to the UK economy through unhealthy diets. So why did innovation appeal to her and how has she confronted the barriers female founders face in winning investment? Read on to find out.
You previously worked for global technology behemoth IBM – why did you decide to quit and launch a startup?
I worked at IBM before I did my Master’s. Although I loved it – it was interesting work and the people were great – all I was really doing was helping a big company make more money, so that wasn’t very satisfying. I took a sabbatical to do the Master’s at Imperial, which gave me an insight into the role of business in sustainability.
The summer before my Master’s started, I joined the ClimateKIC summer school through Imperial. We spent the summer at ETH Zurich, TU Berlin and Imperial, and in Zurich I came across the concept of vertical farming and got interested. I ended up writing my dissertation on the commercialisation of urban farming in London.
After my Master’s, I went back to IBM. I lasted about six months before deciding that I wanted to do my own thing. Part of the reason why I ended up meeting my co-founder and setting up our own business was because there wasn’t anyone doing vertical farming in the UK, so there wasn’t anyone to go to work for and I’d found the thing I was passionate about.
What were the key ingredients of your success and some of the highs and lows in creating the UK’s first vertical farm?
The best way to succeed is to find the right people to support you to avoid you making the same mistakes that other people might have made.
We were very early to the market with what we were doing. That is very exciting, but it’s also difficult to do something where there isn’t a predefined business model or best practice. The commercial world of vertical farming overtook because there was not a body of academic knowledge or a talent pool of people from the research side who were looking at commercialisations.
How did you get investment?
I’ve successfully raised various kinds of funding, from grant-funding from Innovate UK, to non-dilutive funding from ClimateKIC. We also did some early crowdfunding, before raising equity and debt investment from different institutions.
It’s really important to only raise investment when you really need it and not for the sake of it. It’s easy to get caught up in the startup tech world that measures success by how much money you’ve raised. But that’s not really success – it’s just a metric of how much money you’ve raised! Lots of entrepreneurs are interested in the impact that they can have with their products or business, and that’s really what your success metric is.
The more you can do without taking external investment, the better. External investment basically dilutes your control of the business as, once you take investment from other people, their business model becomes your business model – and their business model is to make a return on their investment.
My advice is to do your research to make sure that the investment that you’re going after is a good fit for the ambitions you have for your business. Don’t be tempted to tell a story about where you want to take your business because you think that’s what an investor wants to hear. Tell the story of where you want to take your business, and then find investors who share that vision.
Why did you decide to exit GrowUp Farms and create your new business Pesto?
With GrowUp Farms, I had done the thing that everyone said was impossible – getting a branded range of vertically farmed salads onto the shelf in Tesco at an affordable price. The next commercial job to scale the business required someone with a different skill set from me. So, I hired someone fantastic to come and take over that from me. I realised the bit that I was really good at, and really liked, was the early stages of building a business and I was ready for that challenge again.
Pesto helps food manufacturers improve their margins and impact through supply chain optimisation and AI driven profitability analysis. That came from my 12 years of experience in sustainable food production, seeing how much work there is to be done to transform the food system, and realising that, to put it frankly, the thing that makes the world go round is money. If we want people to build environmentally and socially sustainable businesses, we have to build that into core business activities in the same way that commercial success is a core business activity.
What challenges have you noticed that women face getting investment in green innovations?
In the UK, investors give 98% of funding to men. I’m interested in changing the narrative around this. I don’t think it’s anything to do with women. This is an investor problem. Until the investment community is willing to look at how they can structure the investment system to better support women, and so benefit from the skills that women bring to business leadership and commercial success, nobody wins – neither investors nor entrepreneurs.
What system changes would you like to see to encourage more women to launch sustainable startups?
There needs to be more support and more diverse kinds of funding. The idea that the only way to define business success is along venture capital metrics is bonkers. There needs to be more investment that aligns with the actual needs and ambitions of climate tech businesses. So if you’re developing a piece of hardware or technology, you will need longer to bring it to market. There is a difference between impact businesses and regular tech businesses, because impact businesses are building for the world as they know it needs to be, not the world as it is now. We should be supporting those businesses to do that, not trying to hold them to the same broken standards that created the system.
The investment community and systems around them also need to better support a more diverse background of founders. Raising investment is incredibly competitive. Only the top 1% of businesses are ever going to be suitable for venture capital investment in terms of their ability to scale. But that shouldn’t be the only measure of success, there should be other ways of measuring success.
What tips would you offer to women, including mothers, considering careers as entrepreneurs or who are at an early stage in their career in this field?
Peer support networks are great. I am part of a quarterly motherhood and CEO group via Unreasonable Impact. I am also part the Voyagers network. And there are programmes, like the one that I’ve just done through Antler, where you can actually have some of that scaffolding around you as you’re at that early stage of building your business.
It is incredibly hard and incredibly demanding to build a business, so you need to have good support in place, both paid and unpaid, to give you the ability to focus on your business, and to be the parent and partner that you want to be. Or you need to be prepared to spend money on childcare and other support, such as a cleaner for your home or an admin assistant. Sadly, the reality is that money makes these problems go away. Sometimes women are unwilling to spend that money because they feel like they have to do everything themselves. And you absolutely don’t! The best thing you can do for your family and your business is to prioritise yourself and your value, and subcontract the things you don’t want to do to people you trust to do them well enough.
Applications for Undaunted’s flagship accelerator program, The Greenhouse, are now open. Over 12-months, successful applicants will receive expert guidance, a £20k equity-free grant, and access to Imperial’s world-class facilities and networks to help validate their business model, land pilots, raise investment. Applications close on 31 August.
Read more about women leading the field in cleantech innovation.
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