October 9, 2019

By Lynda Kiernan

Indoor farming pioneer Fifth Season, which was originally founded as RoBotany Ltd and incubated at Carnegie Mellon University’s (CMU) Swartz Center for Entrepreneurship, has raised $35 million to-date in funding led by Drive Capital and including additional investors with ties to CMU.

With this funding behind it, Fifth Season has also announced its plans to build a 60,000 square-foot, commercial-scale indoor vertical farm in Braddock, Pennsylvania, (just outside of Pittsburgh) with expectations for an opening in early 2020. 

The company developed its technology platform through two R&D vertical farms located in Pittsburgh to create a controlled growing environment that outperforms existing vertical farming operations through the use of dozens of robots to control the entire production process, from seeding, scouting, and pest management, to harvesting and packaging. This high-level of automation will not only ensure consistency and quality, but also cuts human labor costs incurred by traditional vertical operations.

This savings on labor can also help to offset other capital-intensive burdens associated with vertical farming as outlined in a full report and investment thesis on indoor vertical farming released in August by Agroecology Capital, which include production inputs, (light, air, CO2, water) which can reach twice the cost of traditional agriculture, and the cost of sufficiently scaling the business to maintain pricing power.

However, Fifth Season’s novel business model may position it to more easily overcome these challenges.

“Indoor vertical farming’s value chain might ultimately parallel that of traditional farming. Most of the value creation might be captured either by oligopolistic players at critical steps of the value chain (seeds bioengineering platforms, mass-market brand builders, and production technology providers) or by players with compelling business models,” noted Djalil Reghis and Nicolas Denjoy,  Agroecology Capital, in their report summary published in GAI News on August 30. 

The greens produced at these two locations are currently sold through local retailers, including Whole Foods and Giant Eagle, and to local restaurants. Once the startup’s Braddock facility is up and running, the produce grown on-site will also be sold through local grocery chains and restaurants.

“The goal through our first three years of development was to prove we could bring fresh food to urban customers at prices competitive with conventionally grown produce,” said Austin Webb, co-founder and CEO of Fifth Season.

“We have developed fully-integrated, proprietary technology to completely control the hydroponic growing process and optimize key factors such as energy, labor usage and crop output,” Webb added. “The result is a vertical farm design that has over twice the efficiency and grow capacity of traditional vertical farms. Our unprecedented low costs set a new standard for the future of the industry.”

Expectations are that during its first year of operations, the Braddock location will produce 500,000 pounds of lettuce, spinach, kale, arugula, and herbs from its 25,000 square-foot grow room, which will be partially powered by solar power, and will require 95 percent less water compared to traditional growing methods.

– 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.