October 20, 2020

By Lynda Kiernan, Global AgInvesting Media

Next-generation hydroponic greenhouse farming company BrightFarms announced it has secured more than $100 million in debt and new equity capital through a Series E round led by Cox Enterprises.

This round now makes Cox a majority owner in BrightFarms, and brings back Catalyst Investors, which made a follow-on investment in the company.

Based in New York, BrightFarms is tapping into the farm-to-table consumer movement – financing, building, and operating local state-of-the-art commercially scaleable greenhouses farms in partnership with supermarkets, cities, vendors, and investors. In doing so, BrightFarms is able to establish a sustainable food production model that eliminates waste, time, cost, and distance from the supply chain.

Recognized as one of the “100 Most Consumer Centric Companies” by Forbes, and “One of World’s 50 Most Innovative Companies” and one of the “Top 10 Most Innovative Companies in Food” by Fast Company. BrightFarms currently distributes its packaged salad greens to more than 2,000 stores across the U.S., with expectations that its network will expand to 15,000 stores by 2025.

Currently, the company has indoor farms in Illinois, Ohio, Pennsylvania, and Virginia, with new facilities under developments in Massachusetts, North Carolina, and Texas. With the capital from this round, BrightFarms plans to invest in its existing assets and retail programs, and to continue the expansion of its regional indoor farms across the U.S.

“Our goal over the next five years is to make quality, locally-grown greens a staple on grocery shelves and in refrigerators nationwide,” said Steve Platt, CEO, BrightFarms.

“We are thrilled to have the strong financial backing of Cox Enterprises, an organization that closely aligns with our mission to build a healthier and more sustainable future, and to have the additional support of our long-term partners at Catalyst Investors,” continued Platt. “Together we are ready to scale our model for local indoor farming in every major market in the U.S.”

It’s been two years since BrightFarms announced its last funding round, when the company secured a $55 million Series D in July 2018 – also led by Cox Enterprises – and including Catalysts Investors, WP Global Partners, and NGEN Partners. A $30.1 million Series C led by Catalyst was raised by the company in September 2016. 

And with time, and the maturation of the indoor farming industry, funding rounds continue to grow, with more than $1 billion dollars invested in the industry over the past five years, and BrightFarms’ total capital commitments to-date exceeding $200 million.

A study conducted by Nielsen found that for nearly half, or 46 percent, of U.S. consumers, buying locally produced food is a priority, and food labels noting local production reflect $239 million in sales. 

However, another survey conducted by Blue Yonder found that 67 percent of consumers are dissatisfied with the local produce at their market. This dissatisfaction opens a window of opportunity for growers such as BrightFarms that focus on leveraging technologies to not only reduce its carbon footprint, but to produce the highest quality produce. 

BrightFarms’ growing model uses 80 percent less water, 90 percent less land, and 95 percent less shipping fuel, while yielding 10 times more leafy greens per acre compared to traditional field agriculture. And by growing its greens within the communities where it is sold, its products can be delivered to markets within 24 hours of harvest.

For investors, committing capital to indoor operations such as BrightFarms not only ties them into this food demand narrative, but presents them with an opportunity that allows them to back startups focused on sustainability and social responsibility.

As climate change intensifies, populations numbers climb, and arable land shrinks, threats to traditional agriculture mount. Some threats are sudden and unpredictable, however, such as COVID-19, which left traditional farms and traditional supply chains unable to adjust to a new reality. BrightFarms however, with its decentralized supply chain, rapidly increased production, entering 800 new stores and increasing sales by 25 percent in the beginning months of the pandemic.

“Cox Cleantech’s goal is to build meaningful businesses that solve fundamental problems facing society and our environment,” said Steve Bradley, vice president of cleantech, Cox Enterprises.

“BrightFarms provides this opportunity through its sustainable model of growing food in the same communities where it’s consumed, resulting in food that’s fresher, safer, better tasting and better for the environment.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.