From Finland to the U.S. - Naava in the city that never sleeps
Finnish smart green wall manufacturer Naava set up a factory in the United States. The factory's first big delivery of smart green walls is headed to an office building in Manhattan.
This is a translation of a Finnish article originally published in Finnish business daily Kauppalehti on 15.6.2017, written by Paul Öhrnberg.
Air purifying smart green wall company Naava has quickly made its way from Jyväskylä, Finland to the United States. The idea of branching out to the US came to be a year ago in the spring, and now the company has production running in its New Jersey factory.
“Last November we started looking for suitable premises and in the eve of Christmas Eve we signed the lease. It was quite a hectic process,” CEO Aki Soudunsaari and CTO Niko Järvinen chuckled. The two have actively traveled back and forth over the Atlantic in the last year.
A quick start - Niko Järvinen and Aki Soudunsaari kickstarted the operations in the US. Image: Paul Öhrnberg
Naava's new office and production premises are located in Springfield, New Jersey, in an area of small industries and offices. The drive to Manhattan takes about half an hour to an hour, depending on the traffic, meaning that the enormous office space market is right next door.
As can be expected from a company specializing in plants and green building, the lawn outside Naava’s premises is neatly cut and the street is full of trees and greenery.
“There is room to grow here,” explained Niko Järvinen.
Naava has hired six people from the US at the start of the process, two for sales and four for production. The paperwork is done by an accounting firm, so the office and showroom spaces still have a lot of room for growth.
However, there is already a lot of action going on in the giant production hall. It is there that the Naava smart green walls are manufactured and the plants are grown. Only a fraction of the production hall is currently in use, but Järvinen assures that once it is in full swing, it will fill up quickly.
“We decided to rent big enough premises so that we wouldn’t have to move to a bigger venue after just a couple of years. That would cost us a lot more than starting off with less capacity in use.”
On the outskirts of the Big Apple - Naava's office and productions spaces are located in Springfield, New Jersey, half an hour away from the market of NYC. Image: Paul Öhrnberg
There is a high threshold for many Finnish companies to venture out to the US market. The distance, bureaucracy and costs intimidate many, but Soudunsaari and Järvinen say that everything has worked out rather straightforwardly.
“Renting out the premises took quite a lot of effort, but happened rather quickly in the end. Hiring the staff also went without a hitch. We found some great people and had the firm running in three months,” they explained.
According to Järvinen, setting everything up so quickly couldn’t have happened without the help of local assistance from a real estate agency, an accounting firm and a recruitment agency, to name a few.
The establishment has also been substantially supported by wellness real estate pioneer Delos Living LLC, which is one of Naava’s most significant investors.
The American firm, Delos, was the main investor in the €3.2 million funding round, which took place in the end of 2016.
Delos is specialized in innovations advancing health and wellbeing in built environments. It has developed the WELL-building standard. The company researched different green wall suppliers and ended up choosing Naava as their partner.
In the New Jersey production hall, there is now a workshop where the frames of the green walls are assembled. In addition, there is a plant treatment station that has been developed by Naava itself. At this workstation, soil is washed off the plants’ roots before planting them in the growth medium and pots, which are also developed by the company.
Finished green walls and plants are now in temporary small greenhouses, but once the construction permit process is over, a large integrated and automated greenhouse will be built into the hall.
"If we are developing something people think cannot work, we are most likely on the right track"
Niko Järvinen, CTO, Naava
The story of Naava began seven years ago, when Aki Suodunsaari started to wonder how he could reduce his own symptoms caused by indoor air problems.
Soudunsaari and Järvinen met each other in a business accelerator program at the University of Jyväskylä, Finland. Järvinen had been researching how water could be purified with algae, and the duo started to investigate how plants could be used to effectively purify indoor air as well.
“It was already known that plants purify air. However, the purification efficiency of the plants’ leaves and other parts above the ground is very weak, which is why the green walls on the market were mostly interior design elements.”
“Instead, the roots and their microbes have a much better purification efficiency. This was already realized in the 1980s when NASA examined the matter. The problem was getting air to circulate through the roots.”
Soudunsaari and Järvinen built a prototype of a functional green wall, where indoor air was lead through the roots of the plants with negative pressure. The test wall was placed in a nearby school that had struggled with indoor air problems.
Bill Seavey is putting the final touch on finished smart green walls. Image: Paul Öhrnberg
“The green wall was placed in a classroom where the teacher had been suffering from sensitivity issues caused by poor indoor air. After two weeks the symptoms were completely gone. The green wall was only meant to stay in the classroom temporarily, but as the results were so outstanding, we left the green wall there and the symptoms didn’t return throughout the entire semester.”
However, in the next semester, after summer holidays, the teacher’s symptoms returned. Soudunsaari and Järvinen were scared that the project that started off promising was about to fail. They went back to the school to check their prototype. It turned out that the fans creating the negative pressure were not functioning, causing indoor air to not go through the roots of the plants like it was supposed to.
“We fixed the error straight away and after two weeks the teacher was symptom-free again. This further supported our faith in the fact that we were developing a product that really works.”
The school also got even more excited over the green wall. All of the students who suffered from symptoms were placed in the classroom with the green wall.
“Yet again, all the symptoms and rashes disappeared.”
The duo realized they were on the verge of a significant innovation. They decided to start developing it determinedly: the company was officially founded. Until then, they had funded the cause themselves and with the help of friends and family, but now they started looking for outside funding to be able to grow.
It was at this point that the third co-founder, Mika Tyrväinen, joined the company. Tyrväinen took charge of sales and marketing.
“Our development has been quite massive. We have carried out three funding rounds, from which we have collected over €5 million. In addition, we entered the Swedish market with a crowdfunding campaign of €2 million.”
Bhargav Rajkhowa prepares the plants and replants them in pots. Image: Paul Öhrnberg
Naava’s revenue is still rather small in relation to the scope of its operations, as is the case with most growth businesses, as the investments are big. There are 60 employees working for the company, but the revenue was only €1.8 million last year.
Now the operations are in good enough shape for a growth spurt to be expected.
Soudunsaari and Järvinen are actively trying to differentiate Naava’s products from regular green walls.
“Almost all of the green walls on the market are primarily aesthetic. Of course plants make a space cozier, which is important in itself, but they don’t purify air like our functional green walls do,” they emphasized.
The intelligence of Naava lies not only in the patented growth medium and air circulation technique, but also in the artificial intelligence which automates lighting, air circulation, temperature and humidity.
The smart green walls also have a remote monitoring system, which passes the information on to a cloud service, which in turn informs the Naava specialists of the green wall’s functions and circumstances. Based on this information, the smart green wall is serviced by the maintenance team whenever needed. In addition, its sensors measure the quality of the indoor air as well.
“Our automatism can also tell if someone unplugs the green wall, for instance, or has left the window open in the winter, causing the plants to freeze. We can then notify the customer or send someone over from maintenance.”
Optimizing the maintenance service is also vital for Naava’s business as unnecessary visits cause extra costs. This is important because Naava doesn’t just sell products to customers, they lease them with a full service. For example, in the US, the monthly fee for one smart green wall and its maintenance is $249.
Worksite meeting - Bill Seavey, Niko Järvinen and Jon Magee plan the placement of pots on the frame. Image: Paul Öhrnberg
The first major delivery of the US factory will soon be heading over to Delos’ Manhattan based office. It will also function as Naava’s very own display window for the local market.
“Our goal is now to get the production and sales up and running here in New York. After that we will scope out other cities in the US. Miami and Los Angeles, for example, are interesting markets.”
For now, the smart green walls in the US contain many imported components from Finland, Sweden and Estonia. In the future, the company aims to cut freight costs by resorting primarily to local, American suppliers.
Finland and Sweden are Naava’s biggest markets for the time being, but Järvinen believes that the US may become the biggest market within the next year or so, due to the investment in New Jersey.
“The market here is huge, there is a great deal of demand and powerful trends which highlight healthy indoor air. We are aiming for big deals here.”
According to Järvinen, there are many green wall suppliers in North America but he hasn’t yet come across smart green walls similar to Naava. However, it is only a matter of time when competitors step into the market. That is why the company strongly invests in product development.
“We have the advantage of years of product development and patents for our most important innovations but we can’t simply rely on that. In Finland, we have eight people working for research and product development, who aim to constantly improve the purification efficiency of the green wall and develop new products.”
Järvinen believes that in the upcoming years Naava will be able to drastically multiply the purification efficiency of the smart green walls.
“We are also trying out completely new solutions. If we are developing something people think cannot work, we are most likely on the right track.”
Imports - many of the components are imported from Finland, Sweden, and Estonia, but the company is planning on using an American supplier in the future. Image: Paul Öhrnberg
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