By Lynda Kiernan
High-tech, indoor, vertical farming startup Bowery Farming announced it has raised $50 million through a Series B-plus round led by Singapore’s sovereign wealth fund, Temasek, and Henry Kravis, co-founder of Kohlberg Kravis Roberts & Co. of New York.
This round, which the company states is the result “of significant momentum in the business”, brings total funding to-date for the four-year-old startup to $172.5 million.
It also comes little less than a year after Bowery raised $90 million through a financing round led by Alphabet Inc.’s GV, and including Temasek, Almanac Ventures, General Catalyst, GGV Capital, First Round Capital, and a number of returning seed investors.
Founded in 2015 in Kearny, New Jersey, by Irving Fain, David Golden, and Brian Falther, Bowery Farming uses advances in LED technology, robotics, and data management to make intensive, indoor agriculture more viable than ever. Within their operation, software and hardware work together through its BoweryOS platform to integrate levels of automation into indoor agricultural production systems, eliminating human labor and allowing for urban vertical farming to operate at scale.
Bowery’s proprietary, fully-integrated software system uses vision technology and machine learning to monitor crops around the clock while collecting data that can drive actionable insight. By controlling the production process from germination to harvest, Bowery is able to produce non-GMO leafy greens and herbs 365 days a year, using zero pesticides and 95 percent less water, and at a rate that is 100 times more productive than traditional agriculture. Additionally, because indoor facilities can be located in urban settings, Bowery’s produce can be delivered to retail stores and restaurants within one day of harvest compared to weeks from remote fields.
Striving to sustainably grow high-quality produce, Bowery currently operates two urban farming sites in Kearny, New Jersey – the first opened in 2017, and the second, which is approximately 30 times larger than the first, opened the following year.
Along with this new funding, the company concurrently announced its plans for a third farm, which will be about 3.5 times larger than its last, in Baltimore, Maryland. The company noted that each of the three farms will benefit from years of data generation, and will communicate with each other through BoweryOS.
“We are excited to share that Bowery’s third (and biggest) farm yet is launching in the DC-Baltimore area in early 2020,” stated the company.
Since its $90 million raise last year, the company has undertaken an upgrade to its computer vision and automation technologies. And with this additional capital, Bowery plans to drive innovation and scale across its operations.
“We’ve been really measured and thoughtful at Bowery in the way that we’ve scaled and grown the business, and that’s not just the farms themselves but the development around our technology . . . I think that really is rooted in the recognition that the problem that we’re solving and the opportunity that we’re focusing on is a large one, and ultimately, we’re running a marathon, not a sprint,” said Irving Fain, CEO, Bowery.
This announcement is reflective of how vertical farming is seeming to gain further traction this year with investors, as well as consumers.
“Strong consumer interest in indoor farming has been matched by a sizable amount of venture capital investment in this sector,” said Adam Bergman, Wells Fargo Head of AgTech and FoodTech Investment Banking Practice, in his article, Is Indoor Farming Poised to Challenge the Status Quo?, published in GAI News on September 18.
“A number of companies, including AeroFarms, AppHarvest, BrightFarms, Bowery Farming, Plenty Ag, and Shenandoah Growers each have raised over $50 million in equity, demonstrating the growing commitment to a variety of indoor farming techniques,” Bergman said. “Significantly more capital is likely to be raised in the coming years as indoor farms are positioned for rapid growth, and investors bet on new entrants with unique technologies that might result in lower production costs than those realized with field-grown produce.”
Indeed, only months before Bergman penned these words, AeroFarms raised a $100 million Series E led by Ingka Group, the parent company of IKEA, bringing the company’s funding to $238 million, and its valuation to $500 million.
Additionally, one month earlier, in June in Berlin, Germany-based urban farming startup InFarm raised $100 million in equity funding and debt financing through a round led by London-based Atomico.
Despite challenges for the industry laid out by Bergman including the need to achieve competitive cost structures compared to traditional agriculture, brand recognition issues, and the need to secure market share, he said that indoor farming has the ability to carve out a place for itself.
“I believe the indoor farming sector is poised to create significant disruption in a number of high-margin specialty crop segments,” said Bergman. “I foresee that, over time, the indoor farming sector will experience consolidation, leading to indoor farming companies with regional brands achieving a more national presence.”
– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.