by Lynda Kiernan

Ingka Group, the parent company of IKEA, has led a $100 million Series E for vertical farming startup AeroFarms, bringing total funding for the startup to $238 million, and raising its valuation to $500 million. Joining Ingka were existing investors Wheatsheaf and ADM Capital, along with Mission Point Capital, GSR Ventures, and AllianceBernstein. 

IKEA Group previously joined chef David Chang – who is also the founder of Momofuku Group – and retired U.S. Army General David Petraeus in AeroFarms’ Series D announced in November 2017 which raised the company $40 million. 

Founded in 2004 in Newark, New Jersey, AeroFarms uses advanced technologies to take agricultural production to the next level without the use of soil, herbicides, pesticides, or fungicides. Employing proprietary technologies and software-controlled LED grow lights, AeroFarms’ vertical indoor farms grow crops suspended above a nutrient rich solution with water, oxygen, and nutrients misted onto the plants’ roots. This system allows AeroFarms to produce crops twice as fast as traditional farming, reflecting productivity 390 times greater per square foot.

Nutrient uptake is closely monitored, and the company’s horticulturalists and engineers employ sensors and algorithms to collect plant data which is then analyzed to understand what inputs and factors cause certain crops to include particular traits and attributes, such as flavor or leaf texture – meaning AeroFarms can create bespoke crops  grown for customers’ particular needs.

Confidence and a Consortium

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 noted 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. Meanwhile, in the next 30 years, we will have to produce more food than has been produced in the last 10,000 years.

Furthermore, traditional agriculture accounts for the use of 70 percent of all the available global water supply, and the U.S. alone uses over 700 million pounds of pesticides per year.

“We are at a major inflection point globally as we think about the challenges of increasing population and urbanization, loss of fresh water and arable land, worker welfare, food safety, and food security, and AeroFarms is uniquely positioned to address each of these areas with proprietary growing technology and unmatched growing history and expertise,” David Rosenberg, co-founder and CEO of AeroFarms, said in 2017 upon announcing the company’s Series D.

These combined factors are leading to greater investor confidence in the vertical ag production model.

Just last month, Berlin, Germany-based urban farming startup InFarm raised $100 million in equity funding and debt financing through a round led by London-based Atomico. Other recent rounds in the space include $40 million for Ohio-based vertical farming startup 80 Acres; $90 million raised by Bowery Farming from Alphabet Inc.’s GV,  and including Temasek, Almanac Ventures, General Catalyst, GGV Capital, First Round Capital, and a number of returning seed investors; and, of course, the record-breaking $200 million Series B raised by Plenty in July 2017. 

Along with raising significant capital, earlier this year AeroFarms joined BASF, Priva, Benson Hill Biosystems, Intrexon, Japan Plant Factory Association, and Fluence Bioengineering to participate in the Precision Indoor Plants (PIP) Consortium – a public-private partnership launched by the Foundation for Food and Agriculture Research (FFAR) with the goal of developing new crops for indoor production that offer optimized flavor and traits. FFAR invested $7.5 million to the consortium, and together with matching funds from the participants, PIP has a minimum $15 million for the development of nutritious crops that can be produced year-round in indoor facilities. 

 

– 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.