July 20, 2017

San Francisco-based indoor vertical farming startup Plenty has raised a $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 include 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.

This round brings total funding for the startup to $226 million.

“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. “…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.”

Founded in 2014 by Matt Barnard and Nate Storey, Plenty is headquartered in a 52,000 square-foot facility. 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.

“Because we work with physics, not against it, we save a lot of money,” Barnard told Bloomberg. Barnard also went on to note that because of its innovative methods, Plenty can grow up to 350 times more produce compared to the same area of traditional farmland, while using only 1 percent of the water.

“The world is out of land in the places it’s most economical to grow these crops,” said Barnard. “After a decade of development driven by one of our founders, our technology is uniquely capable of growing hyper-organic food with no pesticides nor GMOs while cutting water consumption by 99 percent, making locally-grown produce possible anywhere.”

All produce that is grown is chosen by Plenty is based on consumer taste tests and the opinions of professional chefs, reports Bloomberg. And although vegetables such as tomatoes and carrots are not well suited to vertical growing systems, Plenty says that it is in the process of exploring the production of cucumbers.

“We select stuff that people love because we have the freedom to do that because our supply chain is so short and simple,” Barnard said. “The field doesn’t have that option. It has to grow things that can survive 3,000 miles in a truck. That’s why the field grows iceberg lettuce.”

The capital gained through this Series B will be used by the company to fund the global expansion of its hyper-organic, hyper-yielding farm network, and to support its mission to answer the challenge of making fresh produce available and affordable in all locations through a predictable and perpetual system.

A New Record

Plenty’s $200 million Series B follows only a month after Bowery Farming, another high-tech, indoor, ‘post organic’ vertical farming startup announced its completion of a $20 million Series A co-led by General Catalyst and GGV Capital, and including GV, First Round Capital, and other seed round investors.

Founded in 2014 in Kearny, New Jersey, by Irving Fain, David Golden, and Brian Falther, Plenty has leveraged advances in LED technology, robotics, and data management to make intensive, indoor agriculture more viable than ever, with software and hardware being able to work together to integrate levels of automation into indoor agricultural production systems.

These technological advances have come together in Bowery’s FarmOS – a proprietary fully-integrated software system that uses vision technology and machine learning to monitor crops around the clock while collecting data that can drive actionable insight.

At $200 million, this Series B is also twice the size of the previously standing largest agtech investment – Indigo’s $100 million Series C raised last July. Indigo’s round was led by Alaska Permanent Fund and including Flagship Ventures, members of the company’s board and management, and other unnamed previous investors.

Originally created through Flagship’s in-house incubator, VentureLabs, Indigo has collected a diverse sampling of plants from around the world including predecessors of today’s crops, wild varieties, and grasses. Studying the most successful and hearty plants, the company has sequenced the genome of more than 40,000 microbes that can help ward off disease, be more resistant to drought, and better utilize nutrients.

Why Go Indoors?

Population trends aside, there are various macro dynamics behind the decision to invest in indoor agriculture.

Since 1982, 24 million acres of U.S. farmland have been lost to development, and the loss continues at a rate of 40 acres of farm and ranch land every hour, according to the American Farmland Trust. More specifically, the California Climate & Agriculture Network states that California, one of the top-producing agricultural states in the country, has lost an average of 50,000 acres of farmland each year for the past 30 years due to urbanization and development.

It is the ability of indoor farming to meet and alleviate these challenges that is driving the market to have an expected CAGR of 30.7 percent between 2015 and 2020, to reach a value of US$3.88 billion by 2020, according to ReportsnReports.

“The sector has been troubled by the impact of consolidation in the Big Six as a distraction, but deals like this show that disruptive capital and companies are continuing to redefine and shake up the AgTech industry,” Finistere told GAI News. “The way in which farmers grow crops is changing, and disruptors like Plenty understand that the production, distribution and business models need to change to keep pace. This investment shows that there is tremendous capital from non-traditional Ag investors for truly transformational AgTech players like Plenty.”

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.