July 22, 2024

By Gerelyn Terzo, Global AgInvesting Media

GrowUp, a London-based vertical farm startup, has secured a £38 million (US$49.1 million) investment from Generate Capital, a San Francisco-headquartered sustainable infrastructure platform, to produce locally grown, pesticide-free greens. GrowUp will direct the proceeds, which represent Generate Capital’s second allocation to the startup, to meet rising U.K. retailer demand after becoming the first vertical farm to launch its ready-to-eat salad product line in Tesco stores earlier this year.

GrowUp, which was founded in 2013, is behind the Unbeleafable and Fresh Leaf Co. brands, comprising a mix of sorrel leaves and green and red baby lettuce leaves grown in the company’s vertical farm in Kent.

Generate Capital believes GrowUp is strategically positioned to capture more share in the U.K. salad market, owing to the interest it has generated among retailers since starting operations at industrial scale less than a year ago. The firm’s early backing, which occurred in 2021, helped GrowUp prove the viability of its energy-efficient growing system as well commence the conversion of a five-acre brownfield site into the equivalent of 1,000 acres of grade 1 farmland in Kent. In addition to grocery retailer Tesco, GrowUp has also supplied its bagged salads to Iceland, SPAR and other major food service customers.

GrowUp CEO Marcus Whately called the latest backing “a fantastic boost” for the company and recognition of its talent, noting that Generate Capital’s mission to ‘rebuild the world together’ aligns with its ethos. He added, “With Generate Capital’s support, we have proved that vertically farmed salads are sustainable, cost competitive, and commercially viable, as well as tasty, healthy and long lasting. Together we can unlock a new salad category and meet growing consumer demand.”

Generate Capital’s CEO and Co-founder Scott Jacobs pointed out that GrowUp’s vertical farming operations have experienced sales growth of nearly 800 percent year-over-year, adding: “Their ability to quickly earn the trust of the UK’s largest retailers shows the appeal of their product lines, the strength of their team, and their ability to meet rising consumer demand for healthy, locally grown food. We look forward to working with them to keep accelerating the decarbonization of the food system by providing nutritious, affordable and sustainable greens to UK consumers and food manufacturers.”

As the name suggests, vertical farming is an innovative way of farming in which crops are grown in vertical stacks using soilless, artificial growing systems as opposed to conventional horizontal rows. The process commands less space than traditional farming and produces higher yields per acre owing to greater control over the growing conditions and longer planting seasons, in some cases as much as 365 days per year.

Despite the hype, vertical farming faces major challenges to wide-scale adoption, not least the capital intensive nature of building vertical farms coupled with maintenance costs as well as the limited types of crops that are conducive to vertical practices. While leafy greens and berries are compatible with vertical farming systems, crops like rice and corn are not, owing in part to the high acreage they command.

Nevertheless, vertical farming is a niche that has been gaining momentum of late, including a recently announced joint venture between San Francisco-based vertical farming startup Plenty Unlimited and Mawarid Holding Investment, an Alpha Dhabi Holding subsidiary, for fresh strawberry production in the UAE. The partners have earmarked $680 million over the next five years to grow fresh produce locally in Gulf Cooperation Council (GCC) nations using Plenty’s vertical farming technology.

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