Horticultural lighting is experiencing a rough patch at the moment — at least for a couple of large vendors — but that has not stopped investors from taking a longer view of strong growth potential, as evidenced by backers of Sollum Technologies.
The privately held 8-year-old Montreal-based company announced a fresh investment round of $30 million (Canadian; $22.3 million U.S.) from two Montreal-based entities: $25 million (CAD; $18.6 million U.S.) from Idealist Capital, and $5 million (CAD; $3.7 million U.S.) from Fondaction.
Sollum sells tunable, controllable horticultural LED lighting on both a product and service basis. It is known for its SUN as a Service offering, which includes a cloud platform loaded with information on light recipes for different crops, and on the sun’s morning-to-evening spectral patterns anywhere in the world, which users tap to optimize light intensity and spectra depending on their crop and location. (SUN as a Service won a 2021 LEDs Magazine Sapphire Award for horticultural lighting product innovation).
Since its founding in 2015, the company has built up a presence in Canada, the U.S., and the Netherlands. Canadian grower Rose Drummond, for instance, uses Sollum technology to apply five different spectra across five different crops. In Holland, Maarel Orchids is tapping the system to supplement natural light, especially in wintertime and on cloudy days.
The $30 million marks the third funding announcement in less than a year from Sollum. In April 2022, it received $2.5 million from Ottawa-based Sustainable Development Technology Canada (SDTC) to help boost a demonstration project for greenhouse tomatoes. SDTC is a Canadian government group that supports small and medium sized businesses.
Last February, Sollum announced an investment of an undisclosed amount from Fondaction, the minority investor in this week’s $30 million round.
A previous funding round in 2020 of CAD $12 million included an SDTC allocation of $5.25 million to help in what Sollum said was the first commercial crop of winter peppers in Canada. Other investors in the 2020 $12 million round, which spanned the year, were Investissement Québec (a Montreal investment company linked to the Quebec government), Montreal-based commercial bank National Bank, and what Sollum described as “its initial investors.”
The company’s first announced round of financing came in 2017, with CAD $1 million from Real Ventures, Alter Ego Capital, BoxOne Ventures, and individuals François Arbour and Jean-François Grenon.
Sollum declined to identify equity ownership stakes in the company.
This week’s infusion comes amid a slowdown in horticultural business for big players such as lighting vendor Signify and LED supplier ams Osram. A former Current horticultural customer, prominent Pittsburgh vertical farm Fifth Season, closed its doors late last year.
That slowdown appears to reach across growers of various crops. Certainly the cannabis sector — which has been an important driver in the horticultural lighting business — is enduring its share of difficulties at the moment.
Earlier this month, David Cohen, the CEO of Signify’s Fluence division, noted in reference to cannabis that “We’re seeing monumental changes negatively, almost at the same rate or faster than we were seeing monumental changes positively at the beginning of COVID.”
Whatever the crop, Sollum appears undeterred.
“This capital contribution will allow us to accelerate our penetration of a growing market by enhancing the competitiveness of our solution, and its flexibility through the addition of a multitude of spectral recipes,” said Sollum CEO, president and co-founder Louis Brun in announcing the funding round.
Idealist Capital focuses on energy and decarbonization investments. Fondaction is a Quebec-centric retirement savings group that bases its investment decisions on “sustainable,” green, and inclusive principles.
“We trust Sollum’s team and high-performance technology, which increases the energy efficiency of greenhouse operations and positively impacts crops throughout their growth cycle,” said Pierre Larochelle, Idealist co-managing partner. “We are excited to support the Sollum team for the next phase of its growth in Canada and internationally.”
“We are pleased to proceed with a second investment in Sollum,” said Fondaction’s Claire Bisson, deputy chief investment officer. “The goal of Fondaction’s contribution last year was to accelerate the commercialization of a smart light supporting the fight against climate change and the development of a safe and sustainable agri-food sector. The response from growers has been very positive, and we are convinced that this smart lighting solution, which reduces energy consumption and makes it possible to produce fresh, local food all year-round, will have an even greater impact, benefiting growers and the planet.”
*Current exchange rates via xe.com at time of publication.
MARK HALPER is a contributing editor for LEDs Magazine, and an energy, technology, and business journalist ([email protected]).
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