First Stage Investor

New Pick: A Better, Fresher Take on Indoor Gardens

New Pick: A Better, Fresher Take on Indoor Gardens
By Andy Gordon
Date July 29, 2021

Modgarden produces elegantly designed modular gardens so that people can grow fresh produce in their homes. It has garnered awards and a growing number of believers since its founding in 2015. And CEO and founder Aamar Khwaja feels great about what he’s doing. But just as importantly, he feels great… period. 

That wasn’t the case that long ago. 

In fact, Aamar’s health struggles inspired him to start modgarden.

Aamar had a high-paying Wall Street job and the respect of his colleagues. And he was good at what he did. His future prospects looked bright. On the surface, Aamar had it made.

But then he got sick. He couldn’t eat and had no energy. Medications didn’t work. Aamar thought he might never get better. 

Out of desperation, he decided to eat only local, farm-fresh food. He avoided everything that was processed or packaged. And he slowly got better. Aamar had cured himself. 

Now, through modgarden, he wants you to eat as healthily as he does. 

Healthy eating, Aamar explains, isn’t possible if the food isn’t fresh. And the meaning of “fresh” has evolved over time. A hundred years ago, the food people bought and ate had no pesticides or chemicals. It was grown locally in rich, truly organic soil. Nowadays, the word “fresh” virtually guarantees that the food has been sprayed with pesticides.

Modgarden comes as close as you can get to bringing this past back. Take a look at this one-minute video to better understand the full scope of Aamar’s vision.

Aamar and his team have designed the tinyFarm, an organic indoor herb and leafy greens garden that’s about the size of a microwave oven. Because of its modular design (think of it like LEGOs), you can make it taller, wider or longer to grow taller, bushier or deeper-rooted plants.

It holds eight tiny square pods. Modgarden provides the soil cartridges that go in each pod. Its proprietary formula offers living soil teeming with healthy microbes and minerals. You choose what each pod will grow, laying the corresponding seed sheet on top of each soil block. And the tinyFarm app does the rest — including alerting you when it’s time to harvest. 

The eight pods make 32 super-fresh farm-to-table servings each month. The company sends you new pods, soil packs and seeds every month. The best part is that it costs half of what you’d pay at the grocery store.

A TinyFarm in Every Kitchen

It reminds me of the once-ubiquitous bread box. Modgarden’s tinyFarm has much cooler tech. But there are a lot of similarities. It’s about the same size as a bread box. And both solve the basic problem of keeping a diet staple as fresh as possible. 

But modgarden’s tiny indoor farm takes the traditional bread box one step further. It doesn’t merely preserve leafy greens. It grows them. So users can pick their vegetables as soon as they’re ready. It doesn’t get fresher — or healthier — than that. 

Once upon a time, every kitchen had a bread box. In the same spirit, Aamar envisions a modgarden tinyFarm in every home. Can tinyFarms reach that level of adoption? 

If you think it has a shot (which I absolutely do), how could you not invest? That would place modgarden’s tinyFarm in the same category as coffee makers and toasters. Of course, there are dozens of coffee and toaster makers. But there is only one tinyFarm. Modgarden’s product is unique. Other companies use hydroponics, which Aamar says is the equivalent of “fake” or “dead” soil. Modgarden is the only company in the indoor garden space to use living soil that’s rich in microbes — and the only one to focus on growing food at home.

Modgarden’s vision is ambitious. But it has several things boosting its chances for success.

  • Affordability: The basic tinyFarm model goes for $199. There’s also an additional $25 monthly subscription fee (for seed and soil deliveries). Because the product replaces more expensive grocery store purchases, it’s cheaper than it sounds. The upfront cost is equivalent to a high-end toaster oven or coffee maker. But neither of those help you save money. The tinyFarm, on the other hand, pays for itself within several months. The company will at some point be able to reduce upfront costs as production scales. If modgarden can employ a razor-razor blade model — in which a dependent good (the razor or garden pods) is sold at a loss (or at cost) and a paired good (the razor blade or soil packs and seeds) generates the profits — that’s its best chance of putting a tinyFarm in every home.
  • Two Powerful Trends: Modgarden is riding the dual trends of eating healthier and eating fresher. Both trends are only getting stronger. They’ll play a big role in shaping eating habits for the next 10 years, if not more. In the meantime, these trends have already created one of the fastest-growing restaurant genres out there — farm-to-table dining. These restaurants tend to be on the expensive side, but people are flocking to them because they provide a healthier, better-tasting eating experience. And that’s exactly what will drive the farm-to-table dining in phase.
  • Sustainability: I bet that half your grocery items come from Mexico and South America. Most fruits and vegetables are now available all year long, which is convenient. But flying food across the country and across the planet exacts a hefty carbon cost. Growing fresh food in your kitchen has the opposite effect. Modgarden is already being recognized for the role it can play in the fast-rising green tech industry. It’s been approved as an “expert preferred vendor” to participate in a carbon-trading program that meets strict UN criteria. If all goes according to plan, it will finance tens of millions of dollars of tinyFarm sales in Europe, South America, Africa and Canada. The first project is in Portugal. Just the cost of the tinyFarms themselves (not including the monthly delivery fees) will give modgarden more than $10 million in revenue. The company expects to sign a contract any day now. The Portuguese project, already fully funded, is scheduled to begin early next year. 

While the modgarden prototype has won design awards, it hasn’t gone through beta testing yet. The company will spend the remainder of this year tweaking its technology and getting ready for manufacturing. modgarden wants to begin selling in the first quarter of next year. And modgarden will be launching directly to consumers here in the U.S. But much needs to be done over the next few months. It’s going to be an exciting time, but also one that demands a high level of execution. If modgarden’s team executes well, come January 1 its enormous upside will be much closer to being realized. 

This is where Aamar comes in. He’s a man on a mission. To investors, massive adoption is part of a winning formula for growth and profits. For Aamar, it’s much more than that. For him, massive adoption — or in his words, “a tinyFarm in every home” — also means improving the health of the planet and global population. Impact matters to him as much as profits. 

I get the feeling he’s not going to stop until he reaches both milestones. 

Deal Details
Startup: modgarden
Security type: *Convertible Promissory Note (converts into non-voting common stock at $1 million*)
Maturity Date: 2 years from closing
Valuation Cap: $9.5 million
Discount Rate: 20%
Minimum investment: $350
Interest Rate: 5%
Where to invest: Title3Funds
Deadline: August 31, 2021

How to Invest

Modgarden is raising up to $1.07 million in this round of funding on Title3Funds. You’ll need to sign up for an account there if you haven’t yet.

Once you’re signed in to your Title3Funds account, head over to the modgarden raise page. Now enter the amount you want to invest and click the orange “Invest” button on the right-hand side of the screen. The minimum investment on this deal is $350.

*Modgarden convertible note: A convertible note offers you the right to receive Non-Voting Common Stock (equity) in Modgarden USA, Inc. The amount of equity you will receive is determined at the next equity round in which the Company raises at least $1 million in financing, and is calculated based on the following formula:

1. The highest conversion price per security is set based on a $9.5 million valuation cap or if less, then you receive a 20% discount on the price the new investors are paying, i.e., whichever is lower.

2. You also receive 5% interest per year accrued to your investment. 


This opportunity, like all early-stage investments, is risky. Early-stage investments often fail. Modgarden will likely need to raise another round of funding in a year, if not sooner.

If it executes well, this shouldn’t be a problem. But that’s a risk worth considering when investing in early-stage companies. 

The investment you’re making is NOT liquid. Expect to hold your position for five to 10 years. An earlier exit is always possible but should not be expected.

All that said, I believe modgarden offers an attractive risk-reward ratio.

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