BrightFarms Doubles Funding with $55m Series D
BrightFarms Doubles Funding with $55m Series D
BrightFarms, the controlled environment agriculture (CEA) company, has raised a $55 million Series D round, bringing the greenhouse grower’s total funding to more than $100 million.
BrightFarms grows salad greens and herbs in hydroponic greenhouses in Illinois, Pennsylvania, Virginia, and Ohio. The new funds will largely go toward building more greenhouse facilities and expanding the company’s geographical footprint. A new farm in Ohio will open this summer, followed by a Texas facility in early 2019, according to a statement.
This latest round was led by communications, media, and automotive services companyCox Enterprises, with existing investors Catalyst Investors, WP Global Partners and NGEN Partners also participating.
Like other indoor farming operations, BrightFarms produces locally-grown fresh food to densely populated urban communities. But, BrightFarms has historically been more focused on business model innovation that technological innovation, especially compared to its set of high-tech indoor competitors like AeroFarms, Bowery, and Plenty. BrightFarmsCEO Paul Lightfoot said at the recent Indoor AgTech Summit in Brooklyn, NY, that using sunlight is a more sustainable choice than artificial light (as vertical, warehouse farms do).
Though Bright Farms’ funding hasn’t quite caught up to its higher raising counterparts in AeroFarms and Plenty, the company appears to be the closest US venture-backed CEA startup to being a national brand. The Texas farm will also bring BrightFarms closer to the center of salad green agriculture in the US, Salinas, CA and Yuma, Arizona.
“We have always competed directly with West Coast field grown products at the shelf. When we enter new retailers, we are replacing the shelf space of West Coast distributors. Our program drives incremental category growth while attracting our retailers’ most valuable consumers. We will deliver that growth in Texas and throughout the US as we expand. This is a huge category and we are just getting started,” Lightfoot told AgFunderNews.
It has made this progress by insisting on forward purchase agreements with clients, meaning retailers must commit to purchasing a certain quality of BrightFarms product over a period of time in order to sell it at all, which is not usual practice for most retailers, especially when buying produce.
“Our [forward purchasing] model has enabled deep and meaningful partnerships with retailers. We will continue to leverage that model as we scale,” Lightfoot said.
Neal Parikh, former vice president of finance at BrightFarms told AgFunderNews in 2016 that the upfront legal costs of drafting these contracts and convincing supermarket retailers to deviate from their usual buying patterns can prove difficult, especially when it comes to securing a long-term purchasing commitment. But, CEA means that prices and supply should be consistent and BrightFarms was able to convince some of grocery’s largest players. Current clients include Kroger, Wegmans, Walmart, ShopRite, and Jet.com among others.
Lead investor Cox Enterprises is a 120-year-old company with $18 billion in revenue. The company launched a national sustainability initiative in 2007 and has since invested more than $100 million toward environmental goals, according to a statement. The company is also an investor in FarmCrowdy, a digital agriculture platform focused on connecting farm sponsors with real farmers, based in Nigeria.
Cox Enterprise’s David Blau, vice president of strategy & corporate development and Lacey Lewis, senior vice president of finance, have joined the BrightFarms board of directors.