HEADQUARTERS: Somerville, MA
YEAR FOUNDED: 2013
2015 REVENUE: Undisclosed
In 2013, when he was a senior at MIT, Jamie Byron bought $500 worth of supplies at Home Depot and used them to build a fish tank and food-growing ecosystem in the bay window of his Sigma Chi dorm room. Out of intellectual curiosity, he had been reading about aquaponics, which--in oversimplified terms--is the concept of using a fish ecosystem to grow plants in a soil-free setting. The fish waste becomes an organic food source for the plants.
Within weeks, Byron's window was filled with more than 20 crops, including string beans, lettuce, and kiwis. What was more, the fish tank had become the social center of the fraternity. "The hallway usually smelled like stale beer. Suddenly we were hit with this wave of fresh air--a forest as you opened the door to our room," recalls Byron's roommate at the time, Gabe Blanchet.
Blanchet, for his part, had left MIT during his junior year to work at GrabCad, a rapidly growing, Boston-area startup whose software allows mechanical engineers to work together on projects. It was at GrabCad that Blanchet caught the fever for entrepreneurship. In Byron's experiment, Blanchet recognized the economic potential of a low-maintenance aquarium-as-ecosystem that made it simple to grow veggies--and added to the ambience of your home.
Three years later, Byron's dorm-room project has become a full-fledged business based in Somerville, Massachusetts, called Grove. So far, Grove has raised $3.7 million in funding from a mixture of decorated angel investors (Tim Ferriss, Jamie McCourt, Gary Vaynerchuk) and venture funds (Felicis Ventures, Galvanize Ventures, Upfront Ventures). You might ask yourself: On what basis is an aquarium-as-ecosystem so promising? But Grove's valuation--which it will not reveal--is based on much more than its first product.
To be sure, the bookshelf-size ecosystem is a potentially game-changing consumer product, in and of itself: For $4,500, you gain an aesthetically pleasing home aquarium and the ability to home-grow organic herbs, fruits, and vegetables. While the up front cost is far from cheap, the system is designed to ultimately pay for itself in grocery savings. If you consider the ecosystem a unique point of entry in the $27 billion U.S. produce market, you can begin to see why Grove has such appeal to investors. "If it works well, it could end up decentralizing food production, and that's enormous. It could be to the food sector what home solar panels have become to the energy sector," says Bill Aulet, managing director of the Martin Trust Center for MIT Entrepreneurship and senior lecturer at the MIT Sloan School of Management. Aulet was also one of the co-founders' first advisers.
The founders say they are shipping out the first few orders of the aquarium in April, with another 12 scheduled for May. An earlier iteration of the aquarium was largely a success with 50 early adopters in the Boston area, giving the company its first taste of revenue in 2015 (though it won't disclose how much). What's more, the aquarium is in three schools, two restaurants, and one office, auguring well for Grove's goal to have sales channels outside the home. Several private companies with cultures built around employee health have approached Grove about installing ecosystems in their offices. In addition, the company has launched an education division. By selling the ecosystem to schools as a teaching tool for biology and botany (along with a full curriculum and support from the Grove team), the company hopes to cultivate a sales channel and make its ecological concept a familiar one to teachers and children.
As promising as the home ecosystem is, there's more to Grove's business potential than that. Customers can control the ecosystem from a smartphone app called Grove OS, or gOS for short. If you tell gOS what you'd like to grow, it will automatically optimize the ecosystem's settings for those plants. You can even snap a photo of a leaf and use a feature called VegiEye for insight into the plant's health. Grove OS also monitors the aquarium's water level, temperature, pumps, lights, and fans. If your aquarium gets low on water, you'll receive a text letting you know--and telling you how many liters you need to add. In gOS, the founders believe they're on to another high-potential product--something any gardener or small-scale home-grower could use to care for their plants and flowers remotely. From this perspective, you can view Grove's upside not only in terms of the U.S. produce market, but also in terms of the $5.5 billion U.S. home automation and controls market. In other words, you can view Grove as a company with the potential to be the next Nest.
Of course, the next few years won't be easy. Promising as the ecosystem and gOS are as entries into massive market segments, competition will be fierce. There are other aquaponics startups out there. As for large players, Whole Foods has shown an impressive ability to morph its business model in response to evolving consumer desires. What might happen if a ginormous retailer like Whole Foods decides to enter the home-growing arena? As for gOS, what remains to be seen is how willing customers will be to pay to for it. Nonetheless, what's clear for now is that Grove is off to a promising start--and the founders remain flexible about the company's direction. "Our plan is to evolve beyond the first product," says Byron, "and to help people grow their own food and live a more connected life."