Pandemic changed start-up aeroponic farm’s model

Clayton Mooney appeared as part of 1 Million Cups in April 2019 in Cedar Rapids to discuss his experience launching Nebullam and detailing the company’s plan to help commercial indoor farmers grow crops efficiently with high-pressure aeroponic equipment and the software to operate it.

He’ll return next week to talk about the same company’s entirely different plan.

“Everything has changed, for the better,” Mooney said this past week. “We have almost an entirely different team.”

Two years ago, “our business model was focused on becoming the John Deere of indoor farming,” Mooney recalled. “We would sell the equipment and we would license the software that runs the equipment.”

To prove its concept, Nebullam built a model indoor farm at Iowa State University’s Research Park in Ames, providing lettuce and micro-greens — pea shoots, radishes, and broccoli sprouts — to stores and restaurants.

“Right before COVID hit, our revenue was coming from wholesaling to area groceries and restaurants,” Mooney said.

“That was three-fourths of our revenue.”

As with so many other plans, Mooney’s was disrupted by 2020’s pandemic and its ongoing aftereffects.

“We said, ‘What are our options if the restaurants are closing and we don’t know when they’re reopening?’” Mooney recalled.

“We had all this food growing and no place for it to go. We had to innovate on our business model.”

So instead of becoming the indoor-farm equipment company, Nebullam became the indoor-farm food company, selling directly to consumers. Its crops are now delivered directly to customers in Ames and Des Moines, with plans for expansion into other markets.

“Instead of just selling the technology and licensing the software, we’ve decided to become the farm itself,” Mooney said. “That allows us to not only control the product quality, but the experience quality as well.”

Although he grew up on a farm in southeast Iowa, Mooney didn’t set out for a career in agriculture when he enrolled at ISU in 2008.

He’d planned to become a lawyer, but discovered he was very good at playing poker online. Applying mathematical science, he made a living until the federal government shut down major poker websites and seized their assets in 2011.

Mooney majored in English and landed a job as a marketing and technical writer. He later moved to Ireland, where online poker still was legal, for a year. That’s where he met investors who prompted his return to ISU in 2014 to look into tech start-ups.

Mooney and Danen Pool, now the company’s chief technical officer, launched Nebullam in 2016. The name came from nebula, Latin for mist — how food is grown aeroponically — and nullam, “a word that means ‘sustainable’ in other languages,” Mooney wrote in an email. “Smash ’em together and Nebullam was born, and the domain was available.”

The COVID-induced shift from selling turnkey indoor farm systems to a direct-to-consumer provider of healthy local food meant developing new skills in marketing and delivery.

“We went from a website that was all technology-focused to having a consumer-facing food brand,” Mooney said. “How do we build out a fulfillment technology staff? We were kind of forced to figure that out and build it ourselves.”

Mooney said Nebullam’s subscriber base more than tripled over the past year. He plans to launch a second indoor farm in Des Moines early next year, with three more to follow at other locations by the end of 2022.

By the end of 2023, 16 Nebullam farms in such Midwest markets as Chicago, Kansas City, Omaha and the Twin Cities.

Nebullam now employs eight people, five full-time. Mooney figures new farms can be operated by three full-time and one part-time employees.

A 1,000-square-foot Nebullam farm can produce 300 pounds of lettuce a week, enough to supply 300 households.

Mooney monitors customer feedback to develop new Nebullam crops.

“We’re very focused on making data-driven decisions,” Mooney said. “We don’t grow something unless our customers or prospective customers point out that they want it.”

That’s led to the recent introduction of fresh tomatoes, and Nebullam is testing indoor-raised spinach, kale, and arugula.

“We’re also looking into peppers, cucumbers, and strawberries,” Mooney said.

Eric Engelmann, Iowa Startup Accelerator Ventures general partner, will interview Mooney for the Oct. 20 Founder Fireside series of 1 Million Cups. The Gazette is a media sponsor.