Tag: verticalfarming

New York-based urban greenhouse innovator Gotham Greens announced it has successfully raised a $29 million Series C, bringing total funding to date for the company to $45 million.

Launched by co-founders Viraj Puri, Eric Haley, and Jennifer Nelkin Frymark in 2009 with a single 15,000 square-foot greenhouse on the roof of a bowling alley in Brooklyn, New York, Gotham Greens produces premium-quality produce and fresh food products using hydroponic, ecologically-sustainable, technologically-sophisticated, climate-controlled methods in urban greenhouses.

“We’re disrupting the ag supply chain,” CEO and co-founder Viraj Puri told GAI News in 2015. “Our brand is an alternative to food shipped thousands of miles.”

Gotham’s greenhouses use 100 percent renewable electricity and 90 percent less water than traditional agriculture. Gotham’s use of proprietary cultivation techniques and proven hydronic-controlled environmental agriculture has resulted in best-in-class crop yields that are 30 times that of conventional agriculture on a per-acre basis without the harmful runoff of crop protection chemicals. These methods, along with the company’s urban locations meaning a much shorter supply chain, also eliminates the environmental impact and waste associated with shipping produce long distances.

Since its founding, Gotham has grown to be a leading consumer brand and now operates over 170,000 square feet of greenhouses across four facilities in New York and Chicago, with an additional 500,000 square feet of greenhouses under development in five U.S. states, announcing new greenhouses in Baltimore and Chicago earlier this year.   

“Indoor farming is one of the most exciting and promising sectors in the world of food and ag-tech. Gotham Greens is a clear market leader and is positioned for significant growth,” said Delphine Descamps, managing director, Creadev USA. “We were highly impressed by the company’s proven track record, greenhouse profitability, exceptional product quality and human-driven values. We believe that the Gotham Greens team will continue to significantly influence how fresh produce is grown and distributed both in the US and globally.”

This oversubscribed funding round was led by the company’s existing investors, including the Silverman Group, and included a significant new investment from Creadev, a global private equity firm controlled by the Mulliez family.

Gotham Greens plans to use the capital to finance its expansion trajectory, grow its team, expand its distribution, and to strengthen its R&D in controlled-environment food production, data science, and machine learning.

“The oversubscribed financing is strong validation of our proven farm unit economics, efficient utilization of capital, growth rate, and best-in-class brand,” said Eric Haley, co-founder and CFO of Gotham Greens. “We are excited to welcome Creadev to the Gotham Greens family and for this next phase of growth to bring local produce nationwide.”

-Lynda Kiernan

Square Roots, an innovative indoor, urban farming incubator launched in Brooklyn, New York, last year by Kimbal Musk – younger brother of Tesla and SpaceX founder Elon Musk and his business partner Tobias Peggs – has closed on a Seed Round totaling $5.4 million. The round was led by New York-based Collaborative Fund that committed $2 million.

Upon the incubator’s official launch last year, Musk said in a statement, “Our goal [with Square Roots] is to enable a whole new generation of real food entrepreneurs, ready to build thriving, responsible businesses. The opportunities in front of them will be endless.”

To help advance the urban indoor and vertical farming movement, Square Roots selects 10 entrepreneurs and offers them a 13-month program during which they are trained in a curriculum touching on four pillars: farming, business, community, and leadership. The course includes classes, workshops, coaching and training sessions, and practical experience gained through growing food in each of 10 hydroponic, climate controlled farming units, according to the incubator’s website.

Each participant must make a $5,000 deposit at the beginning of the program. However, each participant also has the ability to apply to the U.S. Department of Agriculture (USDA) to help cover the cost, and is able to sell the produce they grow. Square Roots’ current class of 10 entrepreneurs are producing leafy greens including chard and kale which are being sold to local restaurants and through online delivery.

“Our goal is to empower young people to become real food entrepreneurs—so selling the food they grow is a big part of that,” Peggs told  Food and Wine last year at time of launch. “We will encourage them to build direct relationships with customers and sell food locally—to families at farmers’ markets, to chefs at restaurants, and more.”

The funding raised through this seed round will help support Square Roots as it looks to expand to include a second campus next year, and foresees a future with a Square Roots campus in every city providing food to local restaurants, including his own. But the main goal of the incubator is to engage innovative, young entrepreneurs who can leverage technology to answer the challenges faced in agricultural production.

“You have these 180-acre family farms where you might only make $23,000 a year, and it’s so unattractive to the younger generation,” Musk told Venture Beat. “It’s about how do we get farmers to have a higher crop yield, to get more profitable? I’ve gotten to spend a lot of time with farmers, but I don’t have all the answers.”

An Indoor Field of Rivals

Virtually unheard of only a few years ago, the production of food utilizing highly controlled, closed systems has seen startups evolve on multiple continents and is beginning to gain investor attention.

Canada-based TruLeaf – a company that has leveraged farming technologies to create an indoor production system for leafy greens called the Smart Plant System – plans to produce basil, arugula, kale, spinach, and its own east coast salad mix for year-round supply to retail outlets.

Paris-based container farming startup Agricool announced in December 2016 that it had raised $4.3 million in a round led by recently launched French venture capital firm Daphni, along with Henri Seydoux, the founder of drone company Parrot, and Jean-Daniel Guyot, co-founder of Captain Train.

By the end of this year, the company plans to deploy 75 farming production containers throughout the city of Paris with a production goal of 91 tons of strawberries. Longer term, Agricool plans to expand into the production of fruit and nuts as it also expands geographically.

Boston-based Freight Farms is the developer of the Leafy Green Machine, a complete vertical, hydroponic farming system built inside a shipping container that is capable of growing a range of lettuces, herbs, and hearty greens, and has a production capacity equal to 1.8 acres of farmland.

This year however, the investment numbers in the sector began to get noticeably larger. In June of this year high tech indoor, ‘post organic’ vertical farming startup Bowery Farming announced it had raised $20 million in a Series A1 co-led by General Catalyst and GGV Capital, and including GV, First Round Capital, and other seed round investors. This round brings the company’s total earning to $27.5 million.

As advances in LED technology, robotics, and data management make intensive, indoor agriculture more viable, with software and hardware being able to work together to integrate levels of automation into indoor agricultural production systems, eliminating human labor and allowing for urban vertical farming to operate at scale, the industry is attracting more investor dollars.

This became evident this July, when San Francisco-based indoor vertical farming startup Plenty raised the largest agtech funding round in history – a $200 million Series B led by SoftBank Vision Fund – the $93 billion all-stage tech fund headed by Japanese billionaire Masayoshi Son. Other participants in the round include affiliates of Louis M. Bacon, the founder of Moore Capital Management, and existing investors Eric Schmidt’s Innovation Endeavors, Finistere, DCM, Data Collective, and Bezos Expeditions. This round brought  total funding for the startup to $226 million.

-Lynda Kiernan

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.

Indiana-based Co-Alliance LLP, a partnership of agricultural cooperatives, and one of the largest agricultural companies in the U.S., has deepened its relationship with Indoor Farms of America, taking an undisclosed equity stake in the company.

Indoor Farms of America, founded four years ago by a team with farming roots that reach back through multiple generations, is striving to advance the development of controlled environment farming systems. Through its cost-effective business model, Indoor Farms of America designs aeroponic vertical farming modules and products that have the potential to improve existing farmers’ ability to earn revenue by extending the growing season to a year-round cycle.

This investment by Co-Alliance comes only weeks after the group purchased two “warehouse” style farming units from the company which it plans to use in pilot programs with traditional farmers looking to diversify their income streams and mitigate risk.

“When we had our first visit from the folks at Co-Alliance late last year, we expressed our commitment to having traditional agriculture in the U.S. embrace this technology in a manner that would benefit them, and we discussed in detail just how that would take shape,” explained David Martin, CEO of Indoor Farms of America.

“We are evaluating the commercial application and income generating potential of the farms here in Indiana so when we introduce the technology to our member-growers on a larger scale, we have a turnkey, replicable, scalable complete production process in place,” noted John Graham, CFO of Co-Alliance.

Co-Alliance sees this technology as key to helping traditional farmers gain exposure and benefit from the “locally grown” food movement, while benefitting their overall business through year-round production.

“Co-Alliance is positioning itself and its farmer owners to be able to capitalize on the growing consumer demands for truly fresh, locally grown, and high-quality products available to them from local farmers they know and trust, year-round,” said Co-Alliance CEO Kevin Still. “And to do so, we believe investing in Indoor Farms of America is the right way to go about it.”

The Indoor Ag Arena

Population trends, and the ability to extend traditional farmers’ production year-round aside, there are various macro dynamics behind the decision to invest in indoor agriculture.

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 states 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.

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 – all factors that Bowery Farming feels its business model can alleviate.

“In agriculture, everyone agrees that maybe not right away but say in 15 years, water will be expensive, healthy soil will be scarce, and it will be more expensive to farm outdoors than inside. Why wait to work on that problem until it’s a crisis?” Rob Hayes, partner with First Round, pointed out to Tech Crunch in February of this year.

Reflecting the attention this segment of the agtech world is gaining in the investment space – in August of last year, Kimbal Musk,  younger brother of Tesla and SpaceX founder, Elon Musk, and his business partner, Tobias Peggs, announced the planned launch of Square Roots– an accelerator for urban, vertical farming startups.

Key investors and backers of the accelerator include Los Angeles-based Powerplant Ventures, Lightbank, FoodTech Angels, GroundUp, Techstars CTO Jud Valeski, and Ann Marie Gardner, the founder of Modern Farmer.

A Summer to Remember

This summer has been one to remember for investment in the vertical and indoor farming industry as rounds grow in size.

In June of this year, New Jersey-based vertical farming startup Bowery Farming announced it had raised $20 million in a Series A1 co-led by General Catalyst and GGV Capital, and including GV, First Round Capital, and other seed round investors. This round brought the company’s total earning to $27.5 million.

Just one month later, Paris-based container farming startup, Agricool, announced it had raised US$9.1 million1 through a funding round that includes Jacques-Antoine Granjon, the founder of  Vente-Privee.com; entrepreneur, Thibault Elziere; and existing investors, Henri Seydoux, the founder of drone company, Parrot, and venture capital firm, Daphni.

This round came only a matter of months after the company announced it had raised $4.3 million in the fourth quarter of 2016 through a round led by Daphni, and included Hemri Seydoux and Jean-Daniel Guyot, a co-founder of Capital Train.

However, it was San Francisco-based indoor vertical farming startup Plenty which set the benchmark in July when it announced it had raised the largest agtech funding round in history – raising $200 million in a Series B led by SoftBank Vision Fund – the $93 billion all-stage tech fund headed by Japanese billionaire Masayoshi Son. Other participants in the round include affiliates of Louis M. Bacon, the founder of Moore Capital Management, and existing investors Eric Schmidt’s Innovation Endeavors, Finistere, DCM, Data Collective, and Bezos Expeditions.

-Lynda Kiernan

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.

San Francisco-based indoor vertical farming startup Plenty has raised a $200 million Series B led by SoftBank Vision Fund – the $93 billion all-stage tech fund headed by Japanese billionaire Masayoshi Son.  Other participants in the round include affiliates of Louis M. Bacon, the founder of Moore Capital Management, and existing investors Eric Schmidt’s Innovation Endeavors, Finistere, DCM, Data Collective, and Bezos Expeditions.

This round brings total funding for the startup to $226 million.

“Indoor farming isn’t new, but Plenty has developed the next critical contribution to the global food supply evolution, creating a healthier crop economy with fresher, more nutrient-rich produce. As an early investor in Plenty, we saw the potential of indoor farming from the start,” Finistere told GAI News. “…not only to dramatically increase and improve food production, but also to accelerate AgTech innovation and R&D in adjacent areas like breeding, high-value ingredient production and genomics.”

Founded in 2014 by Matt Barnard and Nate Storey, Plenty is headquartered in a 52,000 square-foot facility. There it grows leafy greens including purple Siberian kale, red leaf lettuce, sorrel, and varieties of basil and chives using a highly-efficient vertical system that grows plants in rows of 20-foot tall columns rather than horizontally. This configuration is highly efficient as it allows water to trickle down the column, and enables nutrients to be gravity fed rather than pumped into the system. Plenty also uses cutting-edge LED lighting systems that emit less heat than traditional LEDs, along with microsensor technology and big data processing, that together can be used to produce high-quality produce at lower prices.

“Because we work with physics, not against it, we save a lot of money,” Barnard told Bloomberg. Barnard also went on to note that because of its innovative methods, Plenty can grow up to 350 times more produce compared to the same area of traditional farmland, while using only 1 percent of the water.

“The world is out of land in the places it’s most economical to grow these crops,” said Barnard. “After a decade of development driven by one of our founders, our technology is uniquely capable of growing hyper-organic food with no pesticides nor GMOs while cutting water consumption by 99 percent, making locally-grown produce possible anywhere.”

All produce that is grown is chosen by Plenty is based on consumer taste tests and the opinions of professional chefs, reports Bloomberg. And although vegetables such as tomatoes and carrots are not well suited to vertical growing systems, Plenty says that it is in the process of exploring the production of cucumbers.

“We select stuff that people love because we have the freedom to do that because our supply chain is so short and simple,” Barnard said. “The field doesn’t have that option. It has to grow things that can survive 3,000 miles in a truck. That’s why the field grows iceberg lettuce.”

The capital gained through this Series B will be used by the company to fund the global expansion of its hyper-organic, hyper-yielding farm network, and to support its mission to answer the challenge of making fresh produce available and affordable in all locations through a predictable and perpetual system.

A New Record

Plenty’s $200 million Series B follows only a month after Bowery Farming, another high-tech, indoor, ‘post organic’ vertical farming startup announced its completion of a $20 million Series A co-led by General Catalyst and GGV Capital, and including GV, First Round Capital, and other seed round investors.

Founded in 2014 in Kearny, New Jersey, by Irving Fain, David Golden, and Brian Falther, Plenty has leveraged advances in LED technology, robotics, and data management to make intensive, indoor agriculture more viable than ever, with software and hardware being able to work together to integrate levels of automation into indoor agricultural production systems.

These technological advances have come together in Bowery’s FarmOS – a proprietary fully-integrated software system that uses vision technology and machine learning to monitor crops around the clock while collecting data that can drive actionable insight.

At $200 million, this Series B is also twice the size of the previously standing largest agtech investment – Indigo’s $100 million Series C raised last July. Indigo’s round was led by Alaska Permanent Fund and including Flagship Ventures, members of the company’s board and management, and other unnamed previous investors.

Originally created through Flagship’s in-house incubator, VentureLabs, Indigo has collected a diverse sampling of plants from around the world including predecessors of today’s crops, wild varieties, and grasses. Studying the most successful and hearty plants, the company has sequenced the genome of more than 40,000 microbes that can help ward off disease, be more resistant to drought, and better utilize nutrients.

Why Go Indoors?

Population trends aside, there are various macro dynamics behind the decision to invest in indoor agriculture.

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 states 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.

It is the ability of indoor farming to meet and alleviate these challenges that is driving the market to have an expected CAGR of 30.7 percent between 2015 and 2020, to reach a value of US$3.88 billion by 2020, according to ReportsnReports.

“The sector has been troubled by the impact of consolidation in the Big Six as a distraction, but deals like this show that disruptive capital and companies are continuing to redefine and shake up the AgTech industry,” Finistere told GAI News. “The way in which farmers grow crops is changing, and disruptors like Plenty understand that the production, distribution and business models need to change to keep pace. This investment shows that there is tremendous capital from non-traditional Ag investors for truly transformational AgTech players like Plenty.”

-Lynda Kiernan

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.