August 13, 2020

By Lynda Kiernan, Global AgInvesting Media

Singapore’s sovereign wealth fund Temasek and the investment arm of Bayer, Leaps by Bayer, have partnered to create Unfold, a new venture that will focus on the development of new vegetable varieties that will play a role in enhancing the quality, sustainability, and efficiency of vertical farming. 

Unfold will address the needs and gaps holding back vertical farming from fully meeting its potential from a different angle. As most innovation in the space attempts to develop advanced infrastructure, Unfold will instead use the germplasm from vegetable crops to explore the genetic potential for new varieties of seeds, and new approaches to agronomy uniquely tailored for indoor and vertical farming.

At this point, Unfold has already raised $30 million in initial funding and has forged an agreement through which it will gain rights to certain germplasm from Bayer’s vegetable portfolio. 

Jürgen Eckhardt, head of Leaps by Bayer, which was created to drive fundamental breakthroughs in agriculture and health through new technologies, said, “The investment in Unfold is a great example of a transformative, creative approach to developing agricultural products that meets the needs of consumers, farmers and the planet by increasing access to fresh fruits and vegetables, supporting sustainably grown, hyperlocal production and addressing food security challenges faced by growing urban populations.”

Djalil Reghis and Nicolas Denjoy of Agroecology Capital stated in an article published in GAI News in August 2019 titled, New Report: Can Indoor Vertical Farming Deliver Exceptional Returns For The Planet, Consumers, And Investors? “Food security, food quality, and resources scarcity are the main challenges the global agri-food system is facing. Indoor vertical farming promises to partially address these challenges by producing locally and efficiently fresh, chemical-free, and nutritious food. New farming systems increase yields, use less land and water, and allow a close quality and safety monitoring.”

“These promises and the ability of indoor vertical farming to industrialize high-value crop production have created a perfect window of opportunity to disrupt a multi-billion market (just for the U.S. leafy greens market), leading investors to respond favorably by investing large amounts in this industry.”

The business of vertical farming and investment in the space also aligns with Bayer’s vision of Health for All and Hunger for None – the group’s commitment to the Sustainable Development Goals outlined by the UN for 2030, particularly the goals of ensuring healthy lifestyles and the end of hunger. 

Indeed, in recent years investment has significantly increased in the vertical farming market which is expected to grow at a CAGR of 24.8 percent to expand from a value of $2.13 billion in 2018 to $12.04 billion by 2026, according to Fortune Business Insights. This growth will be driven by decreasing arable land, strong demand for local, sustainable produce, and population migration towards mega-cities such as Singapore, where Temasek is headquartered. 

Indoor vertical farming has represented a significant and increasing share of total AgTech venture capital investments, according to Agroecology Capital Research, 2019. Large rounds such as AeroFarms (2013 and 2017) and Plenty ($200 million in 2017) led this vertical’s share to boost in 2013 and 2017 (10 percent in 2013 and 15 percent in 2017). Unsurprisingly, the U.S. has concentrated 89 percent of total investments between 2010 and 2019.

“The global food challenges we increasingly face require us to rethink traditional farming practices,” said John Vaske, head of Agribusiness at Temasek. “We need to ensure secure farm-to-fork supply chains in urban settings while we also work to reduce the overall environmental impact of farming.”

Vaske continued, “Reducing food waste and improving the safety, traceability and nutritional value of food are all the more important as populations grow and demands for food expand. Investments in companies such as Unfold allow us and our partners to support innovative, sustainable solutions that will benefit all of us over the long term.”

As an entity, Unfold will be led by CEO John Purcell and will be headquartered in Davis, California, with commercial and R&D operations located in both California and Singapore.

“As the first and only company with unparalleled assets to unlock the genetic components of vertical farming, Unfold has a greenfield opportunity within the industry to drive its continued growth and success,” said Purcell in a piece published on Medium. 

“While vertical farming has tremendous potential, it has lacked the power of seeds and digital solutions developed specifically for this sector. Enter Unfold, which offers a unique value proposition to unlock the true potential for vertical farms/farmers, the retail industry, and consumers.”

“We look forward to serving the market through partnerships with vertical farming operators, technology providers and others across the produce supply chain.”

– 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.