October 26, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Advanced U.S. indoor agricultural grower Local Bounti announced it has secured $23.3 million in funding through a PIPE (private investment in public equity) agreement with existing investors Fidelity Management & Research Company, BNP Paribas, additional unnamed existing backers, and management.

This agreement follows a year after the company closed on a $200 million debt financing facility with Cargill in September 2021.

Launched in 2018 in Hamilton, Montana, by former energy industry executives Travis Joyner and Craig Hurlburt, Local Bounti combines the best aspects of vertical and greenhouse growing through its innovative and proprietary Stack & Flow Technology, which has shown to significantly improve crop turns, increase output, and improve unit economics.

The company estimates that the U.S. market for herbs and vegetables will reach a value of $30 billion by 2025, with less than 1 percent of that produce currently being produced through indoor systems. 

Over the course of its rather short existence, the company has established indoor growing facilities across the U.S., employing a sustainable, hybrid approach to production that integrates the best of CEA (controlled environment agriculture) and natural elements.

As a leader in CEA, the company produces greens delivering superior taste and quality through its innovative proprietary modular and scalable system that incorporates environmental, social, and governance (ESG) standards and USDA Harmonized Good Agricultural Practices (GAP Plus+), using 90 percent less land and water than conventional farming methods.

Today, Local Bounti operates advanced indoor growing facilities across the U.S. producing food that is fresher, more nutritious, and longer lasting than its traditionally produced counterparts, being sold under two brands: Local Bounti and Pete’s, through approximately 10,000 retail locations.

Through this arrangement, Local Bounti has agreed to structure a $23.3 million PIPE offering, meaning the securities sold, or to be sold, are not involved in a public offering and have not been registered under the Securities Act of 1933, nor may they be offered or sold in the U.S. except pursuant to an exemption from the registration requirements.

Under the agreed-upon terms, Local Bounti was to issue and sell in a private placement approximately 9.3 million shares of common stock at $2.50 per share – the closing price noted on October 20, 2022.

The capital gained through this transaction will be used to support the continued scale-up of Local Bounti’s organization, and to finance the build-out of its network of highly advanced CEA facilities.

“We are pleased to enter into this equity investment with the support of many of our marquee long-term shareholders, including our management team,” said Kathleen Valiasek, CFO, Local Bounti.

“We are very focused on delivering high quality, great tasting produce grown locally and closer to the consumer and this financing allows us to continue to strategically expand our national footprint to meet robust demand from our existing customer base.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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