January 17, 2018

San Francisco-based indoor vertical farming startup Plenty is taking the initial steps toward its planned expansion into China and Japan.

The company is currently adding to its team on the ground in China, and is scouting out locations and distributors in Beijing, Shanghai, and Shenzhen for up to 300 of its vertical indoor farms across the country. The startup has also already established a team in Japan, and has secured farm sites in that country, company CEO Matt Barnard told Reuters.

Founded in 2014 by Matt Barnard and Nate Storey, Plenty is headquartered in a 52,000 square-foot facility in San Francisco. There it grows leafy greens including purple Siberian kale, red leaf lettuce, sorrel, and varieties of basil and chives using a highly-efficient vertical system that grows plants in rows of 20-foot tall columns rather than horizontally. This configuration is highly efficient as it allows water to trickle down the column, and enables nutrients to be gravity fed rather than pumped into the system. Plenty also uses cutting-edge LED lighting systems that emit less heat than traditional LEDs, along with microsensor technology and big data processing, that together can be used to produce high-quality produce at lower prices. And because of the configuration of this production system, (which can produce up to 350 times more produce compared to the same area of traditional farmland while using only 1 percent of the water), Plenty is able to work with the forces of physics, not against them, enabling the company to save significantly on cost of production.

This past year has been notable for Plenty; most markedly due to its securing of record setting funding from a range of high-profile investors, and a top-tier addition to its team.

In July of last year Plenty made headlines after raising a record-setting $200 million Series B led by SoftBank Vision Fund – the $93 billion all-stage tech fund headed by Japanese billionaire Masayoshi Son.  Other participants in the round which brought total funding for the startup to $226 milion, included affiliates of Louis M. Bacon, the founder of Moore Capital Management, and existing investors Eric Schmidt’s Innovation Endeavors, Finistere, DCM, Data Collective, and Bezos Expeditions.

“Indoor farming isn’t new, but Plenty has developed the next critical contribution to the global food supply evolution, creating a healthier crop economy with fresher, more nutrient-rich produce. As an early investor in Plenty, we saw the potential of indoor farming from the start,” Finistere told GAI News last year. “…not only to dramatically increase and improve food production, but also to accelerate AgTech innovation and R&D in adjacent areas like breeding, high-value ingredient production and genomics.”

A Fitting Landscape

Despite the fact that Chinese consumers don’t often opt to eat raw vegetables, China is a highly strategic market to move into for Plenty. It’s production system provides the perfect answer to two of China’s largest food challenges – safety and quality, and land degradation.

The reason that Chinese consumers don’t opt for raw foods is directly tied to safety concerns, with most fresh foods being fried or boiled to combat any possible agri-chemical or pollution residues. In contrast, Plenty’s produce is organic and non-GMO, and is grown without the use of chemicals. To help consumers make the jump to trusting its produce, Plenty is also planning the integration of “experience centers” with each of its farms where consumers can sample the produce and learn how it is grown.

“After a decade of development driven by one of our founders, our technology is uniquely capable of growing hyper-organic food with no pesticides or GMOs while cutting water consumption by 99 percent, making locally-grown produce possible anywhere,” said Barnard.

China is home to 1.3 billion people, however it is also home to only 7 percent of the world’s arable land. And of this land, 40 percent is negatively affected by moderate to severe degradation brought on by excessive use of fertilizers and other non-sustainable production practices, reports Time. Compounding this problem is rampant urbanization, and the expectation that over the next 30 years, 300 million Chinese people will leave agriculture for cities – all while consumption rates continue to climb.

Amid these trends, Plenty foresees a future where every urban area with more than 1 million people will have one of their 100,000 square-foot vertical farms. Behind this goal is Plenty’s roster of investors. However, the startup is also negotiating with insurers and institutional investors for lines of credit to fund its expansion into some of the world’s areas with the least arable land, such as regions of Asia and the Middle East, according to Bloomberg, with the expectation to pay down the debt in three to five years, compared to a timeline of multiple decades for traditional agricultural operations.

From Cars to Kale

Another large announcement came from Plenty in October 2017, when Kurt Kelty, the former director of battery technology for Tesla,  joined the vertical farming startup as its senior vice president of operations and market development.

Kelty’s move from Tesla into the agtech space is indicative of the growing traction agtech has been rapidly gaining in recent years, with not only investors, but farmers and consumers as well.

“At Tesla I was employee number fifty or sixty,” Kelty told Bloomberg. “It’s a very different company from when I joined. I wanted to figure out where I would contribute to the next big wave. I see my next 10-year-run as growing Plenty.”

-Lynda Kiernan