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Contain Inc Announces Finance Arrangement With Edible Beats For FarmBox Foods Container Farm
The container farm is being built and customized for Edible Beats, and will produce ingredients for all of the EB concepts, Linger, Root Down, Vital Root, El Five, and Ophelais
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July 07, 2021
Contain Inc announces a financing agreement arranged between Edible Beats Restaurant Group & a prominent lender for a FarmBox Foods container farm.
Image courtesy of FarmBox Foods
With the FarmBox Food container, we can grow hyper-local, organic, year-round produce that will be featured at all of our restaurants. We feel this is just the beginning of what we can grow”— Justin Cucci of Edible Beats Restaurant Group
RENO, NV, UNITED STATES, July 7, 2021 /EINPresswire.com/ -- Contain Inc is pleased to announce a financing agreement arranged between Edible Beats Restaurant Group and a prominent lender for a controlled-environment container farm, FarmBox Foods. Edible Beats is a locally owned Denver-based restaurant group known for its diverse menus and healthy, plant-based dishes that highlight local and seasonal ingredients. Edible Beats will be able to grow herbs, leafy greens, salad greens, and various produce organically and year-round with the container farm that will be attached to their Vital Root location.
“We have always sought opportunities to be more responsible to the sourcing, growing, and handling of the incredible ingredients that we get,” said Justin Cucci of Edible Beats Restaurant Group. “With the FarmBox Food container, we can grow hyper-local, organic, year-round produce that will be featured at all of our restaurants. We feel this is just the beginning of what we can grow, and we are eager to add the mushroom grow operation in the future”
Image courtesy of Unsplash
Edible Beats purchased the container from FarmBox Foods, a Colorado-based company that builds automated farms that grow gourmet mushrooms, leafy greens, and culinary herbs. To FarmBox, controlled-environment agriculture is the future, and this deal is one of many leading us towards a more decentralized and eco-friendly food system.
“I think we’re going to see a lot more of these types of programs going forward,” said Chris Michlewicz, Chief Public Relations Officer at FarmBox. “Restaurants are realizing that their produce is fresher and has a longer shelf life when they have a container farm on site. It’s a reliable and sustainable source of food, and it’s more eco-friendly because you no longer have to transport food in from elsewhere.”
Image courtesy of Unsplash
Likewise, Contain Inc is thrilled to support Edible Beats as it ventures into indoor ag. “We're delighted to have assisted SemiMojo and FarmBox Foods in this innovative initiative. Contain is always excited to see more fresh food made available to consumers. Customers appreciate freshness and quality produce, year round. Restaurants and container farms make this possible”, said Doug Harding, Head of Leasing & Vendor Relations at Contain Inc. “We are thrilled to have collaborated with Edible Beets and Farm Box Foods on this project. It aligns perfectly with Contain's mission of supporting the controlled environment agriculture industry in its financing needs”.
The container farm is being built and customized for Edible Beats, and will produce ingredients for all of the EB concepts, Linger, Root Down, Vital Root, El Five, and Ophelais.
About Contain Inc
Contain is out to empower the indoor ag industry of tomorrow. Our first and key mission is bringing easier and faster financing to controlled environment agriculture, but we aren't stopping there. We create platforms to move the industry forward, and most importantly, find ways to make indoor ag more accessible to farmers of all stripes.
Contact Contain:
Doug Harding, Leasing & Vendor Relations
doug@contain.ag | 760-330-1199
About Edible Beats
Edible Beats is a locally owned independent restaurant group that operates such diverse concepts as Linger, Root Down, El Five, Ophelais, and Vital Root. “Walking the walk” is important to us and the various aspects of sustainable & local food sourcing, up-cycled design, and authentic Hospitality.
About FarmBox Foods
FarmBox Foods was founded to help provide a sustainable, eco-friendly food source to places where there is a lack of access to farm-fresh produce. The company’s mission is to use container farms to decentralize the food supply chain and empower local communities.
Doug Harding
Contain Inc
doug@contain.ag
Visit us on social media:
Twitter
LinkedIn
Can Vertical Farms Be Profitable?
Basically, we’re skeptical of both the economics and the save-the-world ethos that many companies preach. We enlisted an industry insider to help us separate the wheat from the chaff
Earlier this year, we covered a couple of indoor farming companies going public through mergers with special purpose acquisition companies (SPACs). Neither seemed very appetizing for retail investors, with negligible revenues to date. As we predicted, more indoor farming startups (referring to both large-scale greenhouses and vertical farming operations) are jumping on the SPAC crazy train. The latest is a Montana company called Local Bounti that had generated little buzz until this month’s announcement, which included news that Cargill is providing $200 million in debt financing in the deal.
In this article, we want to take a step back and look a little more closely at the indoor farming industry, sometimes referred to as controlled environment agriculture (CEA), particularly on the vertical farming side of things. Basically, we’re skeptical of both the economics and the save-the-world ethos that many companies preach. We enlisted an industry insider to help us separate the wheat from the chaff.
Saving the World from BS
Mark Korzilius
Mark Korzilius is the founder and chief strategy officer of &ever, a vertical farming startup based in Germany, with its first mega-farm located in the desert of Kuwait. Korzilius was also the co-founder in 2002 of a chain of fast-casual Italian restaurants, Vapiano, with more than 200 locations in about 30 countries. He reached out to us, as founders sometimes do after reading a story that didn’t include them, to tell us about all of the cool things their company is doing. In the case of Korzilius, he also wanted to set the record straight on all of the things that competitors like AeroFarms and other indoor vertical farming companies aren’t doing despite claims to the contrary.
Obviously, Mr. Korzilius is biased, but he also confirmed one of our chief suspicions: Many indoor farming companies claim they are on a mission to help feed the world, which seems incongruous with the fact that most are growing leafy greens, herbs, berries, and maybe tomatoes. Hardly the sorts of staples that are going to keep the estimated 800 million people in the world from going hungry at the end of the day. He also argues that claims of automation using artificial intelligence and sensor-rich environments are also overblown.
“We truly believe to become farmers and to be successful farmers for some crops, we can prove that [vertical farming] is, in the end, a way forward,” he says. “Hopefully, we can find some technologies to really overcome some issues that have been created by others … that will help solve problems that have been the result of technologies that have been created 50 years ago.”
In the second half of that comment, Korzilius is obviously referring to the modern industrial farming system, with its reliance on pesticides, herbicides, and fertilizers that deplete and poison soils and water supplies. That’s why you see so many companies developing natural fertilizers using microbes or biomanufacturing solutions for non-chemical pesticides. Outdoor agriculture is also water intensive, especially for products like almonds, which require one gallon of water per nut. Various technologies are in development to use water more efficiently, from soil sensors to aerial imagery from drones and satellites. Vertical farming gets at the root of the problem by moving the growing operation indoors, employing LED lights and hydroponics to deliver nutrients using only water rather than soil. That eliminates both pesticides and many traditional fertilizers, and reportedly cuts down on water usage by as much as 95%. Let’s take a look at the specific technology behind Korzilius’ company.
Creating the Right Climate for Vertical Farms
Founded in 2015, &ever (formerly known as Farmers Cut) has raised an undisclosed amount of money, originally through bootstrapping and Seed funding, before raising a Series A from partners in Kuwait for its mega-farm, a joint venture with a local investment company called NOX Management. Korzilius said &ever is currently raising a Series B but declined to offer any details.
There are two key parts to the company’s technology, as we understand it: Dryponics and climate cells.
Dryponics is a new riff on hydroponics, which involves growing plants without soil. The company uses a proprietary growth substrate to keep the roots dry. In effect, the root system stays on top of the substrate, while absorbing the nutrients in the water. This setup reportedly has several advantages, including using 68% less water than common hydroponic systems and 37% less water than aeroponic systems, which grow plants in the air using a mist environment or similar system. Less water means the basins underneath the substrates are flatter, allowing more compact layering of crops.
Each crop requires different growing conditions, Korzilius explains, so his team developed climate cells – microenvironments optimized for temperature, light, humidity, and CO2, among other factors. Controlling the environment also helps control energy costs, especially in the large structures that house many of today’s vertical farms, including the company’s flagship facility in Kuwait.
Credit: &ever
“Within the same premises, we can create different climates. In our Kuwait farm, we have four climate cells next to each other. So, we could potentially create California climate next to Denmark climate next to Singapore climate,” he explains. “By creating climate cells within one premise, we save energy [and] only climatize what needs to be climatized.”
Take spinach, a notoriously difficult plant to grow indoors that took the company two years to figure out the right combination of substrate and climate. But that work has paid off by reducing the amount of growth time by 15%, which translates into 18 grow cycles a year, which is good enough for Popeye to be an investor (if only he hadn’t blown his retirement on canned spinach).
Betting the Farm on Indoor Farming
The value proposition is that products from &ever leave the farm as living plants with the roots intact, continuing to grow while staying fresh and retaining maximum freshness, according to Korzilius. The Kuwait farm is the first large-scale effort to prove the business model, though the company also has smaller grow towers for on-site retail locations like grocery stores, including one in Munich. A second mega-farm is in development in Singapore.
A &ever grow tower. Credit: &ever
The Kuwait farm, which went live shortly before the Rona hit, is designed to grow up to 250 varieties of greens and herbs. The 30,000-square-foot facility can reportedly produce up to 1,200 pounds of green stuff. Korzilius says the pandemic continues to hinder full-scale operations of the farm, which is overseen by just six employees. However, he claims the vertical farm is profitable from an operations standpoint (in other words, without accounting for the original capital expenditure). “So, we are not selling below cost. Yes, it’s a prototype, but it’s working nicely.”
Tasty greens from a vertical farm in Kuwait. Credit: &ever
However, there is a reason why the mega-farm is located in Kuwait and not in Munich or elsewhere in Europe. Energy is simply cheaper in the Middle East, so it was a no-brainer to plug into the grid there. In Singapore, where electricity doesn’t come as cheaply, the local government has stepped in with grant money to subsidize the project. Currently, Singapore imports more than 90% of its food, so the government is motivated to find ways to be more self-sufficient, especially in the wake of the pandemic.
The bigger implication is that vertical farms will require cheap sources of energy to be economically viable. That goes against the current narrative of locating large-scale operations in the middle of big urban centers where electricity is usually pretty expensive. Of course, there are other economics to consider: Centrally located growing facilities will incur lower shipping costs and can theoretically deliver fresher, tastier products to consumers, who may be willing to pay the premium for what Korzilius calls harvest on demand.
“I strongly believe in consumers being at the center of all activities,” he says. “The consumer, in the end, has to pay for this. And, if he doesn’t, then all of this is just a stupid bubble.”
Conclusion
The bubble is certainly ballooning. The three indoor farming companies that are going (or have gone) public that we are aware of are valued at nearly $4 billion. Last year, the top three indoor farming startups in 2020 funding brought in more than $400 million between them, according to AgFunder News. These companies claim to be building a sustainable food system, but it seems unlikely that a business built on microgreens can be sustainable at that scale and cost. As always, the market will decide which model will succeed.
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Sowing Season For Vertical Farms
Growing fresh produce in a controlled indoor environment using technology inputs has, in some cases, been around for almost two decades. But it has only recently started to gain traction linked to climate change and sustainability concerns. However, can it be profitable and competitive?
June 29, 2021
Concerns over climate change and food security have fuelled optimism over controlled-environment farming but operators face questions over their forecasts for profitability. Simon Harvey digs into the sector’s prospects.
Growing fresh produce in a controlled indoor environment using technology inputs has, in some cases, been around for almost two decades. But it has only recently started to gain traction linked to climate change and sustainability concerns. However, can it be profitable and competitive?
Indoor or controlled-environment farming is a niche yet expanding sector, but questions have been raised over whether these operations are profitable, and are able to compete with traditional field-grown crops, given the capital-intensive nature of the industry.
Much, however, depends on individual operations, and the objectives in terms of scale – whether it be targeting mass-market consumers or local buyers, the geographical location, etc – whether the farm is in a hot or cold climate, along with the types of crops grown and, most importantly, the technologies employed to replicate the natural environment at the lowest cost possible.
Vertical farming, per se, is the most popular system where crops are grown on stacked units in a warehouse, underground tunnel, or even in shipping containers, requiring artificial lighting, usually through expensive LEDs to mimic sunlight. But some operators, particularly in hot countries such as the Middle East and Asia, are growing crops in high-tech greenhouses using mostly natural light.
Nonetheless, even the companies in those hot climates need LED lighting to supplement the daylight hours, and, generally speaking, all operators within controlled-environment farming are similar in terms of the inputs such as labour, ventilation, irrigation, and cooling. And all require huge capital investment to purchase land, build the farm, put in the appropriate technology, and run it.
Despite the costs, indoor farming is viewed through a longer-term lens to address environmental concerns like the decreasing availability of land, unpredictable weather patterns and climate change, and the limited resources on hand to feed the world’s growing population.
Securing future harvests
Fraser Black, the CEO of UK-based Crop Health and Protection (CHAP), one of the country’s Aagri-tech centres and funded by Innovate UK, a government-backed agency, gives his interpretation of the current landscape.
“I think it is going to be a while before you see millionaires in vertical farming,” Black says. “It's still at that point where you are justifying the costs and developing the market.
"I think there are enough people around now that are breaking even and starting to become profitable, but we are not there yet. Look at electric cars, we are sort of following that same trajectory.”
Controlled-environment farming comes with advantages: less water than regular agriculture and without the need for pesticides, and higher yields linked to year-round production. And, from the consumer perspective, better-quality produce because the nutrient inputs can be controlled, and freshness, because the crops tend to be grown close to source.
For food importers like those in the Middle East and some parts of Asia, the technology offers food security, too.
All those benefits stack up through the eyes of private equity and venture-capital funds, which are ploughing vast sums of money into the sector.
This is no doubt in the hope of reaping profits when indoor farming has reached scale and matured beyond the current leafy greens and herbs – although soft fruits such as strawberries and blueberries, and tomatoes, cucumbers, and mushrooms, are starting to emerge.
I think it is going to be a while before you see millionaires in vertical farming.
Black also addresses the consumer angle and how controlled-environment farming is likely to develop over the coming years.
“The first decades are going to see people getting involved, learning how to do it, and leading the charge, and it will be niche. But, as they learn and as they build, and they learn how to get the costs down, and control the costs, the more mainstream it will become, and then more people pile in and the bigger the scale.
“There are other points of differentiation people are picking up on, which I think will project it forward until such time that the volume is big enough and people recognise all of the benefits that it will become profitable like other systems.
“Trying to compete with the major growers and put it all in the major supermarkets right now is more difficult because they don't have the volume. But I think those sort of trends are starting to shift.’”
Sky Greens in Singapore is one of the oldest vertical-farming businesses in Asia, founded in 2012 by Jack Ng to grow leafy greens under glasshouses using hydroponic systems and natural light. While Ng points out that labour is the biggest operational cost, he also says that Sky Greens saves money by not employing LEDs, enabling the business to focus on yield and productivity.
“Our energy use is similar to traditional farming, so we can save about 75% on labour,” Ng says. “Our running costs are cheaper than traditional farming, the only thing is the investment cost. Because our output is ten times higher than traditional farming, the investment costs average out.”
He adds: “We have proven in Singapore that we can grow and sell mass-market vegetables. The reason many vertical farms aren't competitive is because they are using artificial lighting, which is a high energy cost, so your payback is high and your overheads are high, plus you have the replacement costs because LED lights only have a two to three-year lifespan.”
Harvesting time at the Sky Greens farm. Credit: Sky Greens
Ng says that the price of locally-grown crops is important given that Singapore is an import-dependent economy when it comes to food, having to contend with cheap products coming in from Malaysia, Indonesia, and China, but its optimum yield gives Sky Greens the ability to compete.
“Our farm operation is profitable. Using our system, based on studies, the payback is about five years but your crop price has to be at a certain level. Therefore, what we produce is usually the higher-end vegetables like pak choi, which is, in a sense, a smaller market.”
Indicative of the costs, Plenty Unlimited in California, a vertical-farming business set up in 2014, has raised $500m to date from investors as it seeks to scale up production of leafy greens such as lettuce, kale, and rocket, along with tomatoes and strawberries.
Others, like AeroFarms, established in 2004 in New Jersey, and Infarm in Berlin founded in 2013, are turning to special purpose acquisition companies, or SPACs, to raise funds and gain public listings.
AeroFarms, which grows leafy greens, herbs, blueberries, and raspberries using aeroponic systems, recently entered a SPAC deal with Spring Valley Acquisition Company valued at $1.2bn, which will give the business access to more than $300m in cash to invest.
Infarm is also proposing a SPAC, said to be valued at $1bn, to expand from herbs and greens into chillies, mushrooms, and tomatoes, all grown using hydroponic technology. The company has so far raised around $400m.
Expensive seeds to sow
Nonetheless, the chief executive of Intelligent Growth Solutions (IGS) in Scotland, a tech-firm that designs and patents controlled-environment platforms using artificial intelligence and robotics, with a particular focus on productivity and efficiencies, is critical of the sums being raised relative to the individual revenues generated, and the technologies employed.
IGS CEO David Farquhar says that many of the vertical-farm operators “are still a long way from being profitable”.
“The first important thing is to get our positioning in the market right. There are a lot of very big and noisy companies that have had to raise a huge amount of money because they are trying to reinvent the wheel,” he explains.
“There is no one magic bullet that makes these things economically competitive. It is a combination of about six subsystems. There are two major costs in commercial agriculture in an enclosed environment.
"One is energy and the other one is labour. If you can take the labour out, and we've managed to reduce it by about 80%, that is a major cost-saving and will make you much more economically efficient.”
Farquhar argues that there is no need to have numerous people tending to these farms, as is depicted on many a website, if AI technology and robotics are employed, which reduce costs and ultimately helps with profitability.
He continues: “We give recipes of weather to the AI and the computer does all that work and the mechanical handling system does all that work. Once you have put the seed into the substrate, in the inserts that go into the growth trays, there is really no need for human intervention at all.
“And if you don't put humans in, you are not going to introduce bugs and disease and things, and therefore you don't need to use fungicides and herbicides, whatever. That means you don't need to wash the crop, which means that you are saving more money but also you are going to increase the shelf life by about 50%-100% and you are also going to reduce waste.”
The IGS ‘Growth Towers’ use a multitude of technologies. Credit: IGS
Dr. Nate Storey, a co-founder of Plenty, says it’s surprising how quickly a vertical farm operator can become profitable, compared to those in field crops, but it’s more difficult for a “company that's raised a couple of hundred million dollars – it takes time for them to grow into that investment than it does for a farm that you just stood up”.
“Agriculture has historically been a low-margin industry, especially field production. And one thing we want to correct as we move into a new era of agriculture is to make it much more profitable. Having a better margin also makes you more investable.
“If we can get the flywheel spinning, we can drive costs out of the business faster and pull capital into the business in a way that allows us to expand much more quickly than you could probably imagine today,” Storey suggests.
“We are on a cost curve, more so than some of the other folks in the space, because we have invested very heavily in R&D. That builds our own internal cost curve, which allows us to drive yield up by seven times and costs out by 50% over the course of two years. So we have this kind of crazy economic curve that we get to ride towards higher profitability.”
Storey says that Plenty is competitive with field crops: “I know that's not true for everyone but again, people have some catch up to play. People are just waiting for these external cost curves to drive their costs down.”
Jonathan Webb, the CEO who founded US vertical-farming business AppHarvest in 2017, says that scale is key to profitability.
The company, based in Kentucky, grows a wide range of tomatoes in glass houses and has recently invested $60m to buy artificial intelligence and robotics firm Root AI, which has the technology to predict yields and evaluate crop health.
While Webb admits that one of its farms in the city of Morehead is a user of LED lighting, it mainly uses natural sunlight, and it also recycles rainwater to save on costs.
“If you are just in a warehouse then you can't use sunlight. So, for us, the two free inputs would be sunlight and rainwater. We are only adding in technology when we need it,” Webb says.
“If you package all that and go at scale, which ends up getting our construction costs down and our operating costs down, we can compete with conventional pricing today. If you are not using sunlight and you are not using rainwater how are you possibly going to compete with conventional crops and keep your costs low? It doesn't make sense.”
Webb adds AppHarvest’s new Morehead facility is going through the ramp-up stage and costs usually level out in year two. “Year three on is where you really start to drive profitability,” he concedes.
“As the industry matures and scales, we are going to see our costs for lighting come down, you'll see costs for steel and glass come down, and then it becomes that self-fulfilling prophecy because, as the industry scales, your material costs are going to be lower and the business models themselves will be fine-tuned to better perform.”
Smart applications of technology
In the Middle East, Pure Harvest is growing tomatoes and strawberries in high-tech glass houses using natural sunlight and only uses LEDs to a small degree because they have more daylight hours and more intense sunlight than other parts of the world.
The business, founded in 2016 in Abu Dhabi, is about to move into leafy greens, with capsicums, cucumbers, and other berry fruits in the pipeline.
Majed Halawi, the vice president for growth at Pure Harvest, says that “it's completely uneconomical” to use artificial lighting, although LEDs are used for “control and steering… but only to supplement the natural light”.
However, Pure Harvest doesn’t use stacked units like vertical-farm operators, and the company is very different in its objective, which is mainly to address food security and reduce the Emirates’ reliance on food imports.
Over the next ten years, our estimation is you will see tens of billions of dollars flood into controlled-environment agriculture.
“Where we compete and where we position ourselves is that we are this local, very high-quality product that is at a discounted price to what comes from Europe and outside of the market,” Halawi explains.
“We have a lot of similarities to a vertical farm in terms of climate management, however, our operating strategy and our set up of the greenhouses and the facilities is different. We find we have a more efficient set-up.
“Vertical farms bank on selling their produce at a very high cost, assuming the customers would pay them a premium for the fact they are grown on a vertical farm.
"However, what we find in this market in the Middle East is it doesn't make any sense to be growing using vertical farms because firstly, the consumer is very price-conscious, so you need to be able to compete with your traditional farms and imports, and, secondly, we have such an abundance of natural light.”
AppHarvest’s Webb believes that controlled-environment farming has a bright future, given the unpredictability of the weather and climate change, and will eventually become a necessity to ensure the long-term supply of fresh produce. As the sector expands and scales, the cost of borrowing is likely to come down too, he says.
“We feel we are really at that tipping point. Over the next ten years, our estimation is you will see tens of billions of dollars flood into controlled-environment agriculture globally, and it's because of the need. You will see scale and you will see profitability immediately because the industry can be profitable if you design the right facility in the right region.”
A Primer On Vertical Farming As The Industry Gains Steam
The modern concept of vertical farming was put forth in 1999 by Columbia University microbiologist Dickson Despommier, who along with his students, came up with a design of a skyscraper farm that could feed 50,000 people
MAY 28, 2021
The modern concept of vertical farming was put forth in 1999 by Columbia University microbiologist Dickson Despommier, who along with his students, came up with a design of a skyscraper farm that could feed 50,000 people.
Since then, vertical farming has become a multi-billion-dollar industry. And it’s growing rapidly.
According to PitchBook data, nearly $1.9 billion of global venture capital was invested in indoor farming in 2020, nearly tripling investment in 2019. And just this week, New York-based vertical farming startup Bowery Farming raised $300 million in its latest funding round, valuing the company at $2.3 billion.
Vertical farming growth may be accelerating at the ideal time, as concerns about population growth and climate change push the food industry to innovate to meet tomorrow’s challenges.
By 2050, around 68% of the world population is expected to live in urban areas, and this growth will lead to an increased demand for food. The use of vertical farming could play a role in preparing for such a challenge. At the same time, it could help restore forests depleted by commercialized agriculture and curb planet-warming emissions caused by farming and transportation. Agriculture and forestry alone account for about a quarter of the world’s greenhouse gases.
What is it?
Vertical farming is the practice of growing crops in vertically stacked layers as opposed to a single level, like a field or greenhouse.
Through the artificial control of temperature, light, humidity, and gases, food can be produced indoors in a way that optimizes plant growth and soilless farming techniques such as hydroponics, aquaponics, and aeroponics. The benefits of which are reliable, environmentally friendly, year-round crop production, significantly reduced water usage (by some estimates up to 95% less), efficient land use, and less exposure to chemicals and disease.
Among its downsides, vertical farms are costly to set up and operate and are too dependent on technologies that have yet to reach full maturity. Further, with its heavy reliance on electricity for lighting and climate control, it uses more energy than traditional farming methods and contributes to greenhouse gas emissions.
With that, the sector continues to innovate. And with vertical farming merely in its infancy, it’s reasonable to expect big things in the coming decades.
Investors certainly think so.
In fact, the global vertical farming market is projected to reach $12.77 billion by 2026, growing at a CAGR of 24.6%, according to Allied Market Research.
Top 4 Vertical Farming Stocks
As the world’s population grows, there are more mouths to feed. This has presented some big challenges in agriculture. Although, we’ve continued to innovate and overcome. There have been some great investing opportunities and vertical farming stocks are up next
By Rob Otman
Originally posted May 26, 2021
As the world’s population grows, there are more mouths to feed. This has presented some big challenges in agriculture. Although, we’ve continued to innovate and overcome. There have been some great investing opportunities and vertical farming stocks are up next.
In general, farmland has been a great area to invest. To help explain why this is the case, here’s a quote from Mark Twain…
Buy land, they’re not making it anymore.
That’s been a good rule for investors to live by. Although, we’re now managing land in much different ways. New forms of precision farming are taking root and crop yields are increasing. On top of that, we now have the technology to grow produce more efficiently indoors.
To benefit from these big trends, you can check out this list of the top agriculture stocks. And there’s a little overlap with the list of vertical farming stocks below. The companies on this list are delivering some unique farming products and solutions…
Top Vertical Farming Stocks
AppHarvest (Nasdaq: APPH)
Scotts Miracle-Gro (NYSE: SMG)
CubicFarm Systems (OTC: CUBXF)
AeroFarms (Nasdaq: ARFM)
AppHarvest
AppHarvest has a few of the largest indoor farms in the U.S. There are two 60-acre indoor farms. One is outside Richmond, Kentucky and the other is in Morehead, Kentucky. On top of that, the company has another 15 acre indoor farm in Berea, Kentucky.
With these farms, AppHarvest is working to cultivate fresh fruits, veggies, and leafy greens. It’s still early stages but the potential is huge. The company is using conventional agricultural techniques, along with cutting-edge technology. Without that, it wouldn’t be possible.
One big benefit to this vertical farming stock is sustainability. The indoor growing makes it climate-resilient and there’s no agricultural runoff. It also uses up to 80% less water than traditional agriculture.
Scotts Miracle-Gro
As far as vertical farming stocks go, Scotts Miracle-Gro isn’t a direct play. It has a wide range of products and services. Although, it has made some big strides into precision gardening and hydroponics. Both are vital for growing plants vertically indoors.
In 2018, Scotts Miracle-Gro announced the acquisition of Sunlight Supply Inc. It’s a hydroponics supplier and the deal came in at $450 million in cash and stock. In 2020, Scotts also acquired AeroGrow International, a hydroponics maker.
Scotts Miracle-Gro has many reputable brands but it’s not resting on its laurels. The company is beefing up its indoor farming products. It has more than 100 on-staff research scientists, specialists, and engineers, as well as partnerships with leading academic institutions.
This helps make Scotts Miracle-Gro one of the top vertical farming companies. It’s well-positioned to grow and caters to both small and large growers.
CubicFarm Systems
CubicFarm Systems points out that 1.3 billion tons of produce rots in transport every year. We’re shipping food great lengths but with modern technology, that’s not necessary. CubicFarm is building and selling automated growing machines. They’re used for fresh produce, nutritious livestock feed, and plant propagation.
CubicFarm also uses hydroponic technology. It provides complete indoor agricultural systems. The company also has vertical farm consultants. They help provide research and solutions for clients. On top of that, CubicFarm has an experienced leadership team.
If you decide to invest in CubicFarm stock, it’s a smaller Canadian company. It’s headquartered in British Columbia and its stock trades on the Toronto Stock Exchange (TSX). Although, you can buy shares in the U.S. over-the-counter (OTC) markets.
AeroFarms
There’s not much of a track record with AeroFarms, at least when it comes to trading publicly. This company is soon going public via a SPAC. To learn more about that process, feel free to click on that link.
Until this SPAC transaction closes, investors can buy into Spring Valley Acquisition Corp. (Nasdaq: SV). Once it closes, those shares will convert to AeroFarms with the ticker ARFM. This creates a unique opportunity to buy one of the best vertical farming stocks…
AeroFarms was founded in 2004 and is a world leader in vertical farming. It’s helping to solve issues from population growth, water scarcity, arable land loss, and supply chain risks. AeroFarms also achieves up to 390 times greater productivity per square foot versus traditional farming.
To accomplish this, AeroFarms takes a data-driven approach. Its plant scientists monitor millions of data points every harvest. The company has also gained some protection with patents.
Buying Vertical Farming Stocks and New Opportunities
The companies above give great exposure to innovative farming. Indoor growing will continue to expand, along with the world’s population. The push for green stocks and sustainability is helping as well.
Advancing technology is making this a reality. Some costs are dropping and output for produce is increasing. On top of that, quality control is becoming more fine-tuned. Indoor growing is also helping reduce food supply chain issues.
As a result, the vertical farming stocks above might see some high returns ahead. And whether you invest or not, you’ll likely benefit from these companies.
If you’re looking for even better investing opportunities, consider signing up for Manward Financial Digest. It’s a free e-letter that’s packed with investing insight. The founder and expert behind it, Andy Snyder, delivers big ideas that are easy to digest.
Bowery Farming Secures $300 Million To Continue US Expansion
The company has secured more than $472 million in funding to date, bringing its valuation to $2.3 billion
Bowery Farming has secured $300 million to continue the expansion of its network of indoor farms across the United States. The company has secured more than $472 million in funding to date, bringing its valuation to $2.3 billion.
The funding will provide resources to accelerate advancements in farm design and the BoweryOS, enabling more and more communities access to a reliable supply of locally-grown produce, year-round.
Accelerating technologies
“This infusion of new capital from Fidelity, other new investors, and the additional support of our long-term investor partners is an acknowledgment of the critical need for new solutions to our current agricultural system," said Irving Fain, CEO and Founder of Bowery Farming.
"Next to that, it's the enormous economic opportunity that comes with supporting our mission. This funding not only fuels our continued expansion but the ongoing development of our proprietary technology, which sits at the core of our business and our ability to rapidly and efficiently scale towards an increasingly important opportunity in front of us.”
“Bowery’s approach to indoor farming represents a meaningful disruption to the traditional produce supply chain, and its systems-based approach to engineering and farm design is unparalleled,” said Andy Wheeler, General Partner at GV. “I look forward to continuing to partner with the Bowery team as they build and scale the largest indoor farming network in the U.S. and bring more sustainable produce to consumers.”
Rapid growth
Now in over 850 grocery stores, Bowery has experienced more than 750% growth since January 2020 at brick-and-mortar retailers like Albertsons Companies, Giant Food, Walmart and Whole Foods Market, and more than quadrupled e-commerce sales through e-commerce platforms, including Amazon Fresh.
In January 2021, Injong Rhee (formerly VP at Google and CTO of Samsung Mobile) joined Bowery as Chief Technology Officer to oversee the seamless integration and ongoing development of technology across the growing network.
The Company is currently transforming an industrial site in Bethlehem, PA into its largest, most technologically advanced and sustainable farm yet, expanding its reach further into the Northeast and Pennsylvania region. Bowery will be breaking ground on additional large-scale commercial farms this year, and is actively engaged in identifying new farm locations in the United States with an eye towards global expansion.
25 May 2021
Indoor Vertical Farming Startup Bowery Farming Raises $300 Million
Vertical farming grows its produce in stacked arrangements in technologically controlled environments, reducing the need for vast expanses of land and bringing mass production right in to urban areas
MAY 25, 202
(Reuters) - New York-based indoor vertical farming startup Bowery Farming said on Tuesday it raised $300 million in its latest funding round, valuing the company at $2.3 billion as the pandemic shed light on the importance of securing the local food supply.
Vertical farming grows its produce in stacked arrangements in technologically controlled environments, reducing the need for vast expanses of land and bringing mass production right in to urban areas.
While the new industry has struggled to break even in the past, the drop in technology costs, such as LED lights, is changing the economics and fueling investor interest.
According to PitchBook data, nearly $1.9 billion of global venture capital was invested in indoor farming in 2020, nearly tripling investment in 2019. (Graphic: Global VC Funding in Indoor Farming, )
Bowery’s latest funding round, led by Fidelity Management & Research Company LLC, would be the largest vertical farming deal on record, based on previous such deals listed by PitchBook.
The company’s leafy greens are sold in over 800 grocery stores and it has two commercial farms in New York and Maryland, and a third coming online this year in Pennsylvania, said Irving Fain, Bowery’s CEO and Founder. Fain said the products are the same or lower in price than their organic rivals, but declined to say whether Bowery was selling them at a profit.
“The real benefit of what we’re growing at Bowery is, first of all, it’s completely pesticide-free,” said Fain, adding that a large part of the power used for the farms is renewable with an aim to eventually make it fully renewable.
He said the new funds will be used to expand farms across the United States, looking for global expansion opportunities, and developing new crops and technology to grow things like strawberries, tomatoes, and carrots indoors and near consumers as well.
Bowery’s investors include GV, formerly known as Google Ventures, General Catalyst, GGV Capital, and Temasek.
Reporting By Jane Lanhee Lee; Editing by Sam Holmes
Image Credits: Bowery Farming
Our Standards: The Thomson Reuters Trust Principles.
Florida Native Brick Street Farms Takes On Global Agriculture With Multi-Million Dollar Investment
The Ag Tech Innovator Scales its Local Approach to More Sustainably Feed Urban Communities
The Ag Tech Innovator Scales its Local Approach to More Sustainably Feed Urban Communities
St Petersburg, FL (May 19th, 2020)- Brick Street Farms announces their new investors, Lykes Bros., a milestone championed by Florida Department of Agriculture Commissioner Nicole “Nikki” Fried, Mayor Rick Kriseman, St. Petersburg, FL, and Mayor Jane Castor, Tampa, FL. With Lykes Bros financial commitment to Brick Street Farms, the AgTech leader will scale its mission to lead the way in disrupting agriculture and reinventing possibilities to sustainably feed more people from urban locations, offer Brick Street Farm’s expertise so we can bring farm to fork in cities and contribute to healthier lives.
COVID-19 and climate change have accelerated existing strains in global food accessibility and supply chains, highlighting the need to rethink the world’s agriculture systems, particularly in dense city areas. In response to this crisis, Crunchbase News has cited that agriculture technology investments have grown 250% in the past 5 years alone. Brick Street Farms has been at the forefront of this industry because of their unique experience in both design and manufacturing of their THRIVE Containers as well as the operation of those farms for financial sustainability.
The AgTech’s ground-breaking approach is to bring to life cultivation centers, also known as Brick Street Farms hubs, which will serve as an all-inclusive onsite farming and retail shopping experience in urban cores. Brick Street Farms is reinventing urban farming with our self-contained, environmentally sustainable THRIVE Containers placed in Hubs. These hubs will grow between 16-20 acres of farmland on 1/3 acre lots. This Climate-Controlled Agriculture (CEA) maximizes output and minimizes water resources.
Brick Street Farms Founder and CEO, Shannon O’Malley observed “We could not be more honored to have Lykes Bros. as our newest investor. Brick Street Farms hubs will be the first of its kind and we can’t wait to share this innovation with the world. Our farming expertise combined with Lykes 121 years of experience in agriculture brings unparalleled leadership to feed more people ‘farm to fork’.”
“Lykes Bros. is excited to be advancing and investing in the future of agriculture. We see Brick Street Farms’ leadership and innovation in the controlled environment sector as the perfect fit for our company. They share our commitment to pioneering the future, and their hub innovation is a bold blueprint for producing healthy food locally and sustainably,” says Mallory Dimmitt, VP of Strategic Partnerships, Lykes Bros.
For more information about Brick Street Farms visit www.brickstreetfarms.com.
About Brick Street Farms
Brick Street Farms produce is grown and sold out of its St. Petersburg, Florida headquarters with a mission to ignite a sustainable farm revolution by dramatically reshaping the global population’s ability to access to clean, healthy food. Built for farming in all environments, Brick Street Farms provides healthy, fresh greens, year-round.
About Lykes Bros.:
Founded by Dr. Howell Tyson Lykes and his seven sons in 1900, Lykes Bros. Inc. is a leading Florida-based agribusiness with cattle, citrus, farming, forestry, hunting, and land and water resources operations as well as major landholdings in Florida and Texas. www.lykes.com.
Widespread Investment In CEA Is An Important Piece of The Food Security Puzzle
It has become increasingly clear that traditional agriculture is simply not meeting the food demands of the future
Sky Kurtz, CEO, and Co-Founder, Pure Harvest Smart Farms
There is a commonly quoted statistic estimating that by 2050, we will have nearly 10 billion people on the planet and, in turn, 10 billion hungry mouths to feed. Aside from population factors, the world’s climate is changing in ways human beings have never seen before. Across the globe, our water sources are being diminished and arable landmasses are shrinking. Food security and sustainability is becoming an ever-more pressing issue. There are a number of pioneering companies worldwide working hard to address these critical issues.
The Problem with Traditional Agriculture
It has become increasingly clear that traditional agriculture is simply not meeting the food demands of the future. Food production is heavily driven by significant freshwater consumption and can be both labour intensive and inefficient. Alongside this, changes in climate are negatively impacting yields. This is being witnessed across the board by the food production industry, investors, and governments alike.
The Power of the Consumer
Increased awareness of these issues has led to changes in consumer demands. Consumers have become more discerning about the quality of the products they buy, specifically when it comes to pesticide use, sustainability, freshness, food safety, variety, and brands. They are ever more interested in having knowledge of and creating a relationship with the foods they consume. This is evidenced by the huge organic growth rates of organics over the past 10 years. People care about quality and are voting strongly with their wallets.
Cultural and socio-economic demographics heavily influence what can and should be grown. Some crops such as premium quality leafy greens tend to target more affluent demographics and palates, whereas tomatoes, cucumbers, and a number of other greenhouse vegetables are staples of many diets and can be produced affordably in most places in the world.
The Promise of Controlled-Environment Agriculture
Controlled-Environment Agriculture (CEA) facilitates the growth of sustainable, high-quality produce but not at the expense of the consumer. CEA allows for consistent, high quality production by eliminating the environmental impacts on food production, allowing for more localized production, and reducing, or even eliminating, the use of pesticides.
Reducing Risk
Since early 2020, COVID-19 has woken the world to the risks and fragility of global fresh fruit and vegetable supply chains. Given perishability, the fruit & vegetable market is uniquely vulnerable vs. other crops e.g. the likes of corn, wheat, rice which can be stored & siloed. Controlled-environment agriculture is a solution that addresses these issues facilitating more localized production and supply, offering high output, resource-efficient production capabilities, while meeting the consumer’s changing demands.
In March, the world’s gaze turned to the Suez Canal where a container ship, the Ever Given, became lodged, blocking the canal. On a daily basis, the Suez Canal carries 12% of global trade, around one million barrels of oil and roughly 8% of liquefied natural gas. The cost of the blockage was reportedly $14m-$15m every day!
The Local Promise
The local unique selling point (USP) is now possible pretty much anywhere. Solutions like ours at Pure Harvest Smart Farms have made it possible to affordably produce year-round, even in the harshest climates in the world for example, the UAE, Kuwait, and Malaysia serving Singapore.
Large-scale solutions are necessary for the food to be economic, due to economies of scale in what is ultimately a manufacturing process. Large-scale greenhouses are particularly suitable for dense urban populations, as just 1 or 2 large production sites within 100 – 500 kilometers of the city or town can serve a large group of people affordably.
Unfortunately for more distributed, rural populations, this becomes more challenging. If you scale-down the solutions to hyper-localize, you often lose efficiency (in terms of both capital expenditure/ m2 and operational expenditure/ m2 for production. With more of the world’s population urbanizing, this is another trend that supports widespread investment in CEA as an important piece of the puzzle to serve future food demands.
The Future
The challenge of feeding nearly 10 billion people by 2050 MUST be solved on both the supply side and demand side. From the supply side, adopting technologies that augment output and resource-efficient growing methods. From the demand side, via changing what we consume, reducing waste, and environmental consciousness. Addressing these issues means we can produce more food with less and less resources.
High-tech agriculture presents a multi-decade investment opportunity to contribute to food security, water conservation, economic diversification, and a more sustainable future for all.
Join Sky at the virtual Indoor AgTech Innovation Summit on June 24 and tune into his live panel discussion on ‘Scaling at Speed: Delivering the Promises of a Mission-Led Industry’ at 16.50 EST.
For more information about Pure Harvest Smart Farms, follow them on Facebook, LinkedIn, Instagram and Twitter.
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Widespread Investment in CEA is an Important Piece of the Food Security Puzzle
Workshop: Food for the Next Frontier
Connecting Retailers, Buyers, and Growers Across Indoor Farming
IGS enters UAE market, signing deal with Madar Farms to enhance food security in the GCC region
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Pure Harvest Is Not Just A Vertical Farm, But A ‘Veridical’ One, Says CEO
With desert making up the vast majority of its land – and most of the rest taken up by urban development – it’s easy to see why the UAE imports as much as 90% of its food from abroad. Just 5% of the country is considered cultivable
May 7, 2021
With desert making up the vast majority of its land – and most of the rest taken up by urban development – it’s easy to see why the UAE imports as much as 90% of its food from abroad. Just 5% of the country is considered cultivable.
The story is the same across much of the arid Middle East. But with the emergence and continued improvement of technologies in areas like indoor farming, irrigation, and water desalination, the region is beginning to contemplate a future in which it no longer relies as desperately on imports from more temperate, fecund climes.
While they’re short on arable land, something that the UAE and several of its neighbors do have in abundance is the money needed to invest in these technologies – or bring them in from overseas.
Pure Harvest “grows 26 commercial varieties of tomatoes, including six that have never before been seen,” according to CEO Sky Kurtz. Image credit: Pure Harvest Smart Farms
In 2019, the government of UAE constituent Abu Dhabi committed $272 million in financing and tax incentives to the development of a local agtech ecosystem. In April last year, the emirate’s Abu Dhabi Investment Office pumped $100 million of grant funding into startups including local controlled environment agriculture (CEA) grower Pure Harvest Smart Farms, with the startups sharing in a further $41 million injection last December. Also in April 2020, nearby Kuwait invested $10 million in Pure Harvest to bring the company’s desert-customized smart farming solutions to its own shores.
In March this year, Pure Harvest announced that it had closed a $60 million growth funding round, including a $50 million sharia-compliant, structured sukuk financing led by SHUAA Capital and anchored by Franklin Templeton. Sancta Capital made a “sizable” investment in the round, the startup said at the time.
AFN recently interviewed Pure Harvest founder and CEO Sky Kurtz about the company’s funding frenzy, its plans for expansion in the Middle East and beyond, and how it has managed to grow ‘green gold’ in the desert. Read on to hear more from Kurtz.
AFN: Pure Harvest recently raised $60 million in growth funding. How will Pure Harvest use this capital?
SK: This complements our earlier $29.3 million Series A capital to fund capital expenditures that will complete three new high-tech hybrid greenhouse projects, including two in the UAE and a beachhead in Saudi Arabia. The two farms in the UAE are nearly complete and will harvest late-Q2, while the Saudi Arabian farm is to be completed by Q3 and harvesting in Q4.
[We’re also making] additions to headcount, including key functions that further our capabilities, such as data science, machine learning, agronomists with specializations in new crops such as leafy greens and berries, and other high-skilled personnel.
The funding complements sizable R&D incentives received from the Abu Dhabi Investment Office to fund and further develop pilots of new technologies, enhancements to our climate control systems, and product development of new tools, equipment, and sub-systems that will improve the efficiency of our production systems.
AFN: What makes Pure Harvest different from competing indoor farming players in the market
SK: Pure Harvest Smart Farms designs, constructs, and operates high-tech growing systems equipped with proprietary climate management technology to enable year-round production of local, affordable, premium-quality fresh fruits and vegetables in the world’s harshest climates. We are also committed to supporting public initiatives focused on improved food security, water conservation, economic diversification, and sustainability. Through constant engagement with governments, schools, and research institutions, we believe that together, we can lead the Middle East into the next generation of sustainable agriculture.
Our representative differentiators are our proprietary climate management system design and system integration. We buy what we can build what we must. This is heavily informed by data from nearly three years of continuous production and operation in the UAE’s extreme heat and humidity. This is an extreme laboratory and we have unmatched insight into how to design systems to operate here and how to actually grow in this environment.
We have an exclusive design and IP [intellectual property] partnership with Larssen Greenhouse Consulting. [Its CEO Thomas Larssen] is a world-leading design consultant to the high-tech horticulture industry with over 30 years of experience and 1,000 successful projects worldwide. We co-develop designs and solutions; however, Pure Harvest maintains the IP. Thomas Larssen also serves as a director on our board and is a significant investor in the company.
We have regionally exclusive technology licenses with certain sub-suppliers that supply equipment or solutions that we deem to be head-and-shoulders above comparable solutions providers. With these partners we enter mutually exclusive relationships for [our] markets [and collaborate on R&D] efforts to modify their solutions for extreme climates.
We leverage our incumbency [in terms of] data, knowledge, and learning curves to both inform our future designs and procurements, but also to train agronomists. We can deploy them into existing assets within the extreme environment to train them before inserting them into new farms, benefiting from our institutional know-how and de-risking new projects and new market entry.
AFN: What differentiates Pure Harvest from a tech perspective?
SK: The technologies being utilized in Pure Harvest’s growing systems differ from existing systems used by growers in the Gulf region and abroad. Pure Harvest’s solution features an overpressure climate control system that not only serves to maintain the most optimal growing conditions but also helps to keep insects and diseases from breaching the growing area.
As pressurized air escapes from the rooftop vents [it] resists entry from particles and insects. This is a first-of-its-kind in the Gulf region but indeed exists in other parts of the world.
We also recapture condensation water created by our system to ‘create’ water, reducing our reliance upon groundwater and municipal water.
To maximize yields, carbon dioxide dosing is injected into the greenhouse which stimulates the photosynthesis process. Advanced hydroponic irrigation systems recirculate 100% of excess water, while sensors and advanced data analytics provide climate management. Many of these solutions are used in the Netherlands or the US, but are truly novel for the markets that we serve.
AFN: Are Pure Harvest products already available on general sale to the consumer? At what price point?
SK: Pure Harvest products are found in some of the most respected and far-reaching retailers in the Middle East — such as Spinneys, Waitrose, and Carrefour — as well as numerous reputable hotels and restaurants in the UAE. The company currently grows 26 commercial varieties of tomatoes — including six that have never before been seen — and six varieties of strawberries. Leafy greens, baby spinach, and much larger production of strawberries are coming by mid-year.
By early next year, upon completion of the company’s Kuwaiti facility, the product portfolio will broaden even further, including raspberries, blackberries, additional vine crops, and additional lettuces.
Pure Harvest’s products are typically at 20% to 40% lower cost versus comparable quality European imports, but a modest premium to lower cost, lower quality, seasonal regional production. We’ve created a new ‘premium local’ category that did not exist in our markets previously.
AFN: Can you explain what a structured sukuk financing is and why it was necessary in this instance?
Sukuks are a novel financial product whose terms and structures comply with Islamic [sharia] law, with the intention of creating risks and returns similar to those of conventional fixed-income instruments like loans or bonds.
Unlike a conventional bond, which represents the ‘debt’ obligation of the issuer, a sukuk technically represents an interest in an underlying funding arrangement structured according to sharia law, entitling the holder to a proportionate share of the returns generated by such arrangement and, at a defined future date, the return of the capital. It’s more like a sale-leaseback transaction, resulting in ‘profits’ being generated from leasing the property, plant, and equipment as opposed to ‘interest’ on capital, which is not permitted in Islam.
For a corporation tapping the sukuk market, there is a potential marketing benefit for issuers active in Islamic markets, if they are seeking investments in those markets. The investor base represented by sharia-compliant investors is still largely untapped and there has traditionally been significant unmet demand for products.
AFN: What is the biggest challenge that Pure Harvest has faced so far – and how has the team overcome that challenge?
The early challenge was securing capital – to convince investors to believe this was possible in unprecedented markets due to the extreme climate + deploying ‘unproven’ assets in an emerging market.
We have now raised approximately $45 million from the US, Asia, Europe, and the Middle East over the past four years. To do so has taken significant time, energy, and conviction in our vision. The GCC [Gulf Cooperation Council] region is a relatively new venture market with a limited number of venture investors, with smaller ticket sizes. We are pioneering agtech in an asset-intensive sector within an emerging market – it’s very, very hard being first. Now that we have proven our solution and our product-market fit, we are able to tap more established institutional investors and capital markets. Early on, however, there were no successful reference cases or analogs to point to. We entered truly uncharted territory.
Now, we are that analog, which new competitors are pointing to when pitching to investors [as to why they] should trust them to enter the GCC markets.
I cannot underscore just how hard it has been to be first. Even with consumers, convincing them that a premium local offering could be better than European imports – it was previously thought impossible, and ‘local’ was looked down on rather than celebrated.
[Operationally] the most difficult issues to overcome in the region are related to heat and humidity during the long summer months, to be able to deliver European product standards to customers. Developing and integrating world-leading horticulture technology has helped us to overcome the challenges presented by the extreme climate.
AFN: Pure Harvest appears to have raised quite a substantial amount of funding to date. What is the total funding figure and how is it all being deployed? Is building indoor farms in the UAE and Saudi Arabia more capital intensive than, say, Europe or the US?
Total funding commitments secured exceeds $216 million, including a performance-contingent $100 million commitment from our Series A lead investor, Wafra International Investment Company. This also includes the sizeable, non-dilutive incentive package received from the Abu Dhabi Investment Office, the exact value of which we can’t disclose.
Our core use of proceeds is indeed capex. Building these high-tech, ultra-high productivity farms is expensive – but it works [because] we have tremendous amounts of sunlight. We are able to harness that light to deliver world-leading yields, which helps absorb that capital and results in a favorable — often much more favorable — unit cost of production versus similar high-tech growing systems in the US, Europe, and Australia, for instance.
We call our solution ‘veridical’ farming rather than ‘vertical’ farming – ‘veridical’ meaning ‘truthful,’ or ‘realistic.’ We actually meet our claims to investors and to our customers, achieving about 10x to 15x the yield per square meter versus incumbent lower-tech CEA solutions while using a seventh to a tenth of the water.
AFN: What’s next for Pure Harvest?
We aim to be a regional leader in agribusiness in five years and to have expanded into at least two to three foreign markets, including within Southeast Asia. We will have advanced our solution to be 20% to 40% cheaper to build, build it in half the time, and deliver 20% to 40% greater output per unit of ‘light — that is, solar energy — that we can harvest. We will standardize our integrations with renewable infrastructure for our power and CO2 requirements, while utilizing treated wastewater in our cooling systems to reduce our environmental impact, and thus that of our customers when they buy our products.
The future of sustainable farming is here. We wish to serve the underserved billions who live within an eight-hour flight of Abu Dhabi and within 2,000 miles of the Equator, who have historically relied upon imports from other markets. Delivering to these nations is a true and tangible food security solution, and contributes to water conservation, economic diversification, and more sustainable, high-quality, safer, and tastier food.
Lead Photo: Pure Harvest founder and CEO Sky Kurtz. Image credit: Pure Harvest Smart Farms
Comment? News tip? Story idea? Email me at jack@agfunder.com or find me on LinkedIn and Twitter
Global Investment In Agri-Food-Tech Surged To $ 22.3 Billion
Finistere Ventures report reveals $ 5 billion invested in Agtech and $ 17.3 billion invested in Foodtech in 2020. Finistere Ventures expects 2021 to dwarf 2020 numbers as capital continues to flood into agtech.
5 May 2021
Finistere Ventures report reveals $ 5 billion invested in Agtech and $ 17.3 billion invested in Foodtech in 2020. Finistere Ventures expects 2021 to dwarf 2020 numbers as capital continues to flood into agtech.
According to Finistere Ventures’ 2020 AgriFood Tech Investment Review, a report developed in collaboration with PitchBook Data, total global investment in agrifood tech companies in 2020 surged to $ 22.3 billion – $ 5B in ag-tech and $ 17.3B in food-tech – continuing to grow at 50% CAGR (2010-2020); Finistere expects 2021 to exceed this record year based on early investment data.
Fear of missing out
“While 2020 presented some interesting and, at times, surprising outcomes for the agrifood sector, we saw fear turn into fear of missing out (FOMO) with favorable results for startups, particularly those in later stage situations with meaningful revenue and strong growth stories,” said Arama Kukutai, co-founder and partner, Finistere Ventures.
According to Kukutai, low interest rates and a soaring equity market have provided a backdrop unseen in the relatively short history of the sector. “Investors attracted to the potential disruption of massive total addressable markets fueled increases in investment across all stages and segments,” he said.
Race for innovation access is heating up
Based on the report, the race for innovation access is heating up and creating a new level for agrifood investing. A renewed focus on climate change and carbon offsets is gaining momentum, and rising ESG interest is spilling over into venture-backed companies across agrifood.
Involvement from new or non-traditional players – family offices, large pension and sovereign wealth groups, late-stage PE – swelled and the role of CVCs across the space continued to grow. 2020 saw 8054 unique investors participate across over 9000 transactions in the agri-food space.
Key ag-tech findings include:
Due to the industry’s successful adaptation in the midst of the pandemic, investment into ag-tech continued to expand at a staggering pace through the end of 2020, with the $ 5B total capital invested comprising almost one-third of the $ 15.9B raised across ag-tech sectors since 2010
Late-stage deals and mega-rounds proliferated as investors rallied to support existing portfolio companies and the composition of investors continued to diversify, fueling sustained growth with the median for late-stage deals reaching record heights at $ 67.6M
CVCs considerably increased activity in the ag-tech arena in 2020, participating in 107 funding rounds
Biotech kept its stronghold as the top ag-tech investment area, attracting $ 1.3B in 2020, and starting off 2021 strong with $ 268.2M secured in the first quarter.
Interest in indoor ag spiked, driven by supply chain and sustainability factors, as well as growing consumer preference for local, fresh produce with superior taste and quality –reaching $ 1.3B in funding for 2020, more than doubling YoY from $ 601M raised in 2019
Due in large part to pandemic pressures, animal tech investment exploded in 2020 reaching $ 847.8M after lackluster interest over recent years
Subsectors including digital technologies, precision agriculture, plant sciences, ag marketplace, and fintech also broke investment records in 2020 as stakeholders made their commitment to help growers manage climate change and overcome mounting sustainability pressures clear.
Investments and profits booming
According to Finister Ventures investments and profits are booming. “We expect 2021 to dwarf 2020 numbers as capital continues to flood into the technology categories with absolutely massive disruption potential like indoor ag, supply chain technologies, animal health, novel ingredients and alternative proteins,” said Kukutai.
Substantial consolidation and rise of distinct market leaders
“Valuations, deal totals and market sizes will continue to climb thanks to low interest rates, free-flowing capital, and trillions of dollars of pent-up consumer spending power. However, as the market inevitably right sizes and new categories of innovation emerge to meet these monumental shifts, we also expect substantial consolidation and the rise of distinct market leaders.”
Hugo Claver
Web editor for Future Farming
Investing In Indoor Vertical Farming
The vertical farming market is projected to reach USD 7.3 billion by 2025 from USD 2.9 billion in 2020; it is expected to grow at a CAGR of 20.2% during the forecast period
By: Robert Colangelo, CEO Green Sense Farms Holdings, Inc.
Indoor vertical farms are the new kid on the block, with commercial production farms being a little more than a decade old. The vertical farming market is projected to reach USD 7.3 billion by 2025 from USD 2.9 billion in 2020; it is expected to grow at a CAGR of 20.2% during the forecast period. 1
One vertical farm startup has raised over $250 million, and another has a valuation of over $1 billion. Are vertical farms hype, urban legend, or a good investment? Conducting thorough due diligence by a qualified expert is critical when considering an investment in a vertical farm.
Here are a few pointers to consider when exploring investment candidates.
Business Model: A good business model is a start to creating a profitable vertical farm. The model should include: where the farm will be located, who is the anchor customer, what crop will be grown and what volume, how produce will be packaged, how it will be distributed, and how it will be sold. In addition, it should speak to the type of farm that will be built- a turnkey operation "seed to supermarket" vs. a grow farm, that contracts germination, packing and sales. Startups always take longer than expected to get up and running, make sure there is a grace period built into the plan for initial operations and distribution challenges.
Management Team: After you have developed the winning business model, you need a qualified team to execute the business plan. Now that vertical farming has been around for several years, it’s easier to find qualified people with experience operating these types of farms. The C Suite should consist of professionals experienced in business administration and a technical team with horticultural production experience. This includes a senior grower, production manager, food safety manager, chief ag engineer, and sales manager. Depending on the farm; for example, a highly automated farm could look to related industries to find an operations manager with experience in a mechanized food production facility.
Marketing and Sales: The produce market is very competitive and is referred to as "a pennies business" with tight margins and profit being made on large volume. Shrink can minimize the profitability of a vertical farm. The worst thing for any operator is throwing away crop and shrink can happen at each point of the growing chain (seeding, germination, nursery, growth, harvesting, packing, and shipping). In addition, produce is perishables having a short shelf life of 1-3 weeks. The best way to reduce shrink is to grow high-quality produce that is pre-sold. This will also yield the highest price. Having an experienced sales team with relationships with a wide variety of produce buyers is paramount to success. A well-thought-out marketing and a branding plan are also required to position your crop for the target buyer and detail how to make your brand known, such as in-store samples/tastings, sponsorships, chef partnerships, merchandising…
Technology: What technology will be used in the growing operation? Will the farm be designed and built by the management team, or will they contract an experienced farm design and builder? Will they use a proven hydroponic, aeroponic, or aquaponics growing system or deploy a disruptive new technology A well-designed farm will include a seeding area, a germ room, a nursery, a growing area, a packing area, and a cooler. It will require the Temperature (T), Relative Humidity (RH), and air circulation to be monitored and controlled at each operation. At a minimum, it will require specialized equipment to control the climate, irrigation, treat nutrient water, enrich the grow room with CO2 and control LED lights. In addition, the farm should have adequate sensors, a central data collection system with automated vales, so the delivery of all inputs can be precisely controlled. A disruptive technology can be transformative when scaling the business, increasing yields, generating profit, and optimizing productivity.
Capital is the grease that lubricates the wheels of innovation. Investors continue to explore opportunities in the vertical farming market helping the industry grow.
Investors be(a)aware, there is a lot of hype in this market and much nuance in operating a successful vertical farm that does not show up in financial projections or a business plan. A good business model, a seasoned management team, and a proven growing technology can all add up to make a vertical farm profitable.
1. PRNewswire, NY, Aug 17, 2020.
Robert Colangelo is the founder of Green Sense Farms Holdings, Inc. (GSF. He is an early adopter in Controlled Environment Agriculture (CEA) and has over ten years of experience with the design-build, operations, and raising capital for vertical farms.
GSF provides contract research, consulting, and farm design and build services.
CANADA: Startup Bets 'Vertical Farms' Can Boost Quebec's Winter Berry Output
Standing about six metres tall, the indoor Vaudreuil facility will cover about 1,250 square metres and eventually produce 15 to 18 tons of strawberries a month, according to founder and chief operating officer Yves Daoust
Brossard-Based Ferme d’Hiver Has Just Raised $5 million
In A So-Called "Seed Round" To Help Accelerate Its Expansion.
Frédéric Tomesco
May 05, 2021
Ferme d'Hiver president Alain Brisebois, right, and founder and COO Yves Daoust in the vertical farming grow room at their operation in Brossard. PHOTO BY JOHN MAHONEY /Montreal Gazette
A South Shore startup is going live with a technology it says will help Quebec growers produce tasty strawberries year-round and reduce the province’s wintertime reliance on imports.
Brossard-based Ferme d’Hiver said Wednesday it has begun building a “vertical farm” in Vaudreuil to produce pesticide-free berries starting in October. The three-year-old company has just raised $5 million in a so-called “seed round” from investors such as Investissement Québec to help accelerate its expansion, while the Quebec government chipped in with $1.7 million in loans and loan guarantees.
Standing about six metres tall, the indoor Vaudreuil facility will cover about 1,250 square metres and eventually produce 15 to 18 tons of strawberries a month, according to founder and chief operating officer Yves Daoust. That would double Quebec’s current winter berry output, he said.
Known as precision farming, Ferme d’Hiver’s technology optimizes climate conditions for indoor gardening, resulting in production and crop density per square metre that’s 15 times greater than that of a traditional greenhouse, the company says.
“This is a game-changer for the growers,” chief executive Alain Brisebois said in an interview Wednesday. “Instead of only producing seven months a year, they can now produce year-round. Our goal in Vaudreuil is to prove to the industry that our technology is not only viable, but profitable and that it can work on a large scale.”
While most growers typically use propane to produce fruits and vegetables, Ferme d’Hiver’s technology relies on electricity. As a result, the company says its solution is 30 percent more energy efficient than a typical greenhouse, which cuts capital costs by 40 percent.
When it strikes a deal with a grower, Ferme d’Hiver commits to buying 100 percent of the production and acting as a wholesaler. It has a long-term contract with IGA in Quebec to deliver at least 25 tons of strawberries every week, Daoust said.
Ferme d’Hiver has signed partnership agreements with about a dozen Quebec growers thus far, and talks are underway with additional producers to buy their output, according to Brisebois.
Within three years, the company is aiming to replace 10 percent of Quebec’s strawberry imports with the production of its grower partners.
Premier François Legault has singled out food production as one of the areas in which he wants Quebec to become self-sufficient to better insulate the province from disruptions in the global supply chain — such as the current pandemic. His government unveiled plans to invest $157 million to increase the province’s “food autonomy” in November.
“The government was very clear when they started financing us two years ago: the goal here is not to become the Amazon.com of strawberry production, but rather to create an industrial cluster around agri-foods,” Daoust said. “We want to help create a nexus of Quebec growers with specific skills in the production of winter fruits and vegetables.”
Although it’s currently unprofitable, Ferme d’Hiver plans to break even when it hits 5,000 square metres of total production capacity, the CEO said.
“Given all the discussions we’re having with producers, we’re very confident of getting to 5,000 square metres next year. Then we can start covering our expenses,” said Brisebois, a former Metro Inc. and Alimentation Couche-Tard executive. “As a startup, I would say we’ve just finished childhood. Now we’re entering adolescence.”
VIDEO: Tortuga Raises $ 20m To Build Hundreds of Harvesting Robots
Last year Tortuga launched a strawberry harvesting robot. This platform is flexible, according to Tortuga it can be adapted to work on other crops like indoor-grown tomatoes or outdoor table grapes
23-04-2021
Harvest automation start-up Tortuga completed a $ 20 million Series A funding. The money will be used to build hundreds of robots to deploy in 2022.
Last year Tortuga launched a strawberry harvesting robot. This platform is flexible, according to Tortuga it can be adapted to work on other crops like indoor-grown tomatoes or outdoor table grapes.
Picking robots
“For many years, the story behind harvesting robotics has been a lot of promise but really companies have struggled to deliver on that promise for the customer. That’s because this is one of the hardest problems there is to solve,” Eric Adamson, co-founder of Tortuga AgTech told AgFunder News. “Not only are we doing autonomous robotics but we are also doing picking robotics and we are doing them together in really unstructured environments.”
Robots-as-a-service
The $ 20 million in new capital will be used to build hundreds of robots to deploy in 2022. Some of the funding will also go towards building out the operating model and making sure there are enough employees to operate the robot fleets.
Tortuga currently offers its technology through a robots-as-a-service model, getting paid by the kilo for the produce that its robots pick.
Additional services
“On top of that, as we provide other services that are close to harvest, like data-driven forecasting and other types of cultivation services, those will also be service-based although they may not be quite so specific to a kilogram. We are charging for some of these additional services on a monthly or per-hectare basis,” Adamson told AFN.
Web editor for Future Farming
Why Indoor Farming Funding Is Heating Up
Jim Giles, GreenBiz.com
23 April 2021
Investment is flowing into the indoor farming and regenerative agricultural sector as businesses seek to bolster yields and curb emissions
The billions of dollars flowing into indoor ag, followed by news of a big announcement in regenerative farming, is yet more evidence of the furious pace of change we're seeing in food production.
On the indoor side, the update comes in the form of details on a big vertical farm that the startup Plenty is building in Compton, California. The plans are impressive:
The 95,000 square feet facility will be as productive as 700 acres of farmland, according to CNN. In terms of land use, that's more than 200 times as efficient.
A crop of leafy greens in the facility can go from seedling to harvest in two to three weeks, Plenty co-founder Nate Storey told LAist last year. That's significantly faster than a regular outdoor growing schedule.
The facility will supply 100 grocery stores when production begins later this year.
This activity is partly the result of a $140m investment Plenty announced last year, just one of a slew of similar deals in the indoor ag sector. Close to $2bn will have been invested in controlled environment agriculture (CEA) between the fourth quarter of 2020 and the middle of this year, estimates David Ceaser, lead agronomist at Agritecture, an indoor ag consulting firm based in Brooklyn. Most of that is going to large automated greenhouses, he adds, but vertical farm companies such as InFarm, Oishii, and AeroFarms also have raised rounds.
"Consumer demand is fueling investment in CEA," Ceaser explained by email. "Consumers want consistent access to clean, high-quality produce, year-round. CEA production provides this and appeals to investors due to consistent revenue streams and reduced risk of interruptions compared to field-based production."
In addition to using less land, vertical farms require fewer chemical inputs and consume far less water than conventional farms. But remember that these facilities are, to an extent, only as green as the grid they plug into: Studies have shown that using fossil fuels to power vertical farms undermines the other environmental benefits. This isn't really an argument against indoor ag in general, just a reminder that we need to decarbonize our grid as fast as possible. (For more on how that's happening and how your company can get involved, check out GreenBiz Group's new VERGE Electrify event. It runs May 25-26 and is free to attend.)
Another notable deal saw $87m funneled into Gotham Greens, which operates high-tech greenhouses. Some of that will be used to farm lettuce and herbs at a new 10-acre greenhouse in Solano County, California. The facility is co-located with the University of California, Davis, a notable agricultural research hub. Among other things, Gotham will collaborate with Davis scientists on efforts to develop new indoor varieties.
The Solano facility also feels like a statement of intent. Just a few hour’s drive south are the lettuce farms that supply much of the US market. Gotham setting up shop in Solano is like an upstart grocery chain opening in a Walmart parking lot. It signals that the newcomer believes it can take the incumbent on at its own game.
Moving outdoors, the news is that PepsiCo has committed to spreading regenerative practices on seven million acres of US farmland - roughly the size of its entire agricultural footprint - by 2030. I'll state the obvious: seven million acres is a lot of land. To put it in context, it's only two years since General Mills committed to transitioning one million acres to regenerative agriculture, which at the time felt like a step change in the spread of no-till, cover crops and other methods for restoring soil fertility. And the PepsiCo announcement comes just six months after Cargill unveiled plans to implement regenerative practices on 10 million acres. The momentum here is very clear. As well as building soil fertility, these moves potentially could lead to the drawdown of millions of tons of carbon dioxide every year.
This article first appeared at GreenBiz.com
Barton Breeze Launches Bank Guarantee For Hydroponic Farms
In an attempt to make hydroponic farming attractive to those interested in farming, Barton Breeze, a Gurugram-based agritech firm, has come up with an assured return plan with a bank guarantee
New Delhi | April 21, 2021
TV Jayan
In an attempt to make hydroponic farming attractive to those interested in farming, Barton Breeze, a Gurugram-based agritech firm, has come up with an assured return plan with a bank guarantee.
“A prospective investor will be able to get an assured annual return of 30 percent on his capital expenditure. We would operate the farm for them and sell the produce for them. If there is a shortfall in this return, the deficit would be paid by banks with whom we have entered into an agreement,” said Shivendra Singh, Founder, and CEO of the commercial hydroponic farming venture, which set up shop in India in 2017 after a successful run in West Asia.
Singh said the firm has already tied up with the State Bank of India and HDFC Bank for the bank guarantee scheme. Explaining the model further, Singh said not only progressive farmers, but HNIs and corporates would be able to reap benefits from this scheme.
“Hydroponic has several benefits for commercial farms. However, many customers are not completely aware of the environmental and financial contribution of it that makes them skeptical of investing in a hydroponic set-up. Our approach of providing a bank guarantee to B2B customers ensures a risk-free transaction. With this strategic step, we look forward to strengthening our relationship with customers,” said Singh.
“This a bit similar to contract farming, except that in this case, we take care of everything, including running of the farm. Unlike in contract farming where the farmer is having the liability and responsibility of growing the crop, we ensure that the crop is grown properly by being present at the farm on a continuous basis,” Singh told BusinessLine.
According to him, the capital expenditure involved in setting a one-acre hydroponic farm is around ₹1.1 crore, and with the government subsidies, this comes further down to around ₹85 lakh.
To make this attractive for urban dwellers interested in investing in farming, Barton Breeze plans to make it possible to invest as little as ₹5 lakh. He said a bunch of people can together and start a hydroponic farm, which his firm can help set up. There is no need to purchase the land as it can be taken on long lease, say, of 10 to 12 years. “We will ensure that they would get 30 percent or more returns on the investment annually,” said Singh. The bank guarantee will be available to the investors for three years initially, but this can be further renewed.
He said already a few farms are being planned in Delhi-NCR, Kolkata, and Indore in Madhya Pradesh under the bank guarantee scheme.
Singh said his young company has been growing exponentially in the last few years. Starting from a low base, the firm grew by eight times in 2017, six times each in two subsequent years. “Even in 2020, which was hit by Covid-19, we grew by 300 per cent,” he claimed.
Barton Breeze, which introduced hydroponic kits that can be used by city dwellers to grow vegetables in their terraces and balconies in the country a couple of years ago, normally grows off-season vegetables and greens to fetch a better price for their farmer customers.
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iFarm Partners With Contain Inc., Increases Accessibility of Vertical Farms
Dedicated to securing lease financing for indoor growers, Contain Inc. works with private lenders to facilitate leases and create custom insurance solutions
On February 11th, 2021, iFarm officially became a partner with and an official vendor of Contain Inc., an indoor agriculture fintech platform operating in North America and Europe that connects indoor growers with the resources they need. Growers now have the opportunity to lease iFarm vertical farms through Contain Inc.
Dedicated to securing lease financing for indoor growers, Contain Inc. works with private lenders to facilitate leases and create custom insurance solutions. The company organises financing for all indoor farming needs, including LED, greenhouse equipment, and entire plant growth systems like vertical farms.
Why Lease Financing is Important
Building or equipping a vertical farm can require significant amounts of capital, yet indoor growers typically lack financing options when compared to their outdoor farming counterparts. 75% of indoor growers are looking for funding, and many will not receive it from traditional agriculture banks and traditional business banks as farm lending in the United States declined at an average pace of 2% throughout 2020. While it is slightly easier to seek financing options in Europe, there is still great room for improvement.
By becoming an equipment vendor, iFarm has made its vertical farms more accessible to those who are interested in vertical farming but face the obstacle of high capital investment. Through Contain Inc., indoor growers can now lease iFarm’s vertical farms and LED systems without a need for high investment. By acquiring vertical farming equipment more easily, prospective indoor farmers can also scale their operations more quickly and cost-effectively.
How It Works
If you would like to start your indoor farming journey with iFarm, but need financial support, simply sign up to Contain Inc.’s exclusive leasing platform and complete a simple application form. The application requires you to input company basics, financial essentials (i.e. what amount is needed for lease), primary equipment to be purchased, and principal financial institutions. The algorithms can match you to a pool of 28 equipment and financial lenders, ranging from small shops to some of the largest banks in the world. The minimum lease size is typically around $75,000 with no upper limit. Contain Inc. will review your application and decide whether you are eligible for financial support.
Contain Inc. also provides a “Leasing Calculator”, which is a short quiz to help growers figure out their odds of obtaining lease financing offers through Contain Inc.
Get in touch with iFarm today to discuss how to invest in or to lease vertical farming technology.
California-Based Greenhouse Grower To Invest $18 Million In Warner Robins, Georgia Indoor Farm
Pete’s is expected to use 24 acres within the county for its indoor growing facility that’s designed to require 90% less land and water than traditional farming
APRIL 08, 2021
Pete’s, a longtime, California-based greenhouse grower, is expected to invest $18 million in opening their first eastern U.S. indoor agriculture facility in Warner Robins in Peach County, Gov. Brian Kemp announced Thursday. COURTESY PETE'S
WARNER ROBINS
Pete’s, a longtime, California-based greenhouse grower, is expected to invest $18 million in opening their first eastern U.S. indoor agriculture facility in Warner Robins in Peach County, Gov. Brian Kemp announced Thursday.
“Agriculture is our top industry, and Pete’s will bring another game-changing, innovative, and sustainable indoor farming facility to Georgia as we continue to feed the world from the Peach State,” Kemp said in a news release. “Georgia’s No. 1 business climate, top-notch logistics network, and commitment to innovation continue to attract jobs and opportunities for hardworking Georgians, and I thank Pete’s for investing in Peach County and the surrounding region.”
Pete’s is expected to use 24 acres within the county for its indoor growing facility that’s designed to require 90% less land and water than traditional farming.
“The food we put into our bodies has environmental implications,” Pete’s CEO Brian Cook said in a news release. “Our ethos has always been centered around taking care of our team, our local communities, and the environment. Our goal with our new Georgia facility is to expand on our mission, helping to ensure that consumers in the Southeast have access to clean, sustainable greens that are grown close to home.”
The facility will be located in the Robins International Industrial Park, which is located within Peach County.
The development is expected to generate 15 jobs, according to the release.
The company plans to fill a variety of positions including general manager, production, growing, logistics, food safety, and office manager, as well as general administrative roles. To find out how to get hired, visit eatpetes.com for additional information.
“Peach County is thrilled to welcome Pete’s to Middle Georgia,” said B.J. Walker, executive director of the Peach County Development Authority. “This new advanced agricultural project not only brings new jobs and investment into our community but also highlights Peach County as a leader in high-tech, sustainable agriculture.”
The Robins International Industrial Park is designated “Georgia Ready for Accelerated Development” certified site, with “select” status, the release said.
The GRAD Select status is “an indication that a site has met or exceeded more rigorous certification requirements to attract development,” the release said.
Founded in 1970 under the name Hollandia Produce, Pete’s is an employee-owned and operated leader in hydroponically grown living lettuce and cress, according to the release.
Expanding Controlled Environment Agriculture Beyond 'The Big 4'
Greenhouses, vertical farms, and hybrid systems (collectively known as controlled environment agriculture or CEA) continue to attract investment at a much greater scale than in previous decades
By PETER TASGAL
March 29, 2021
Greenhouses, vertical farms, and hybrid systems (collectively known as controlled environment agriculture or CEA) continue to attract investment at a much greater scale than in previous decades. In each of the past five years, there have been multiple nine-figure capital raises. Capital has been deployed across farm types:
Large-scale greenhouses (e.g., AppHarvest, Mastronardi Produce),
Regional greenhouses (e.g., Gotham Greens, Bright Farms),
Localized vertical farms (e.g., InFarm – Berlin, Kalera).
Sources of funding have expanded from almost exclusively highly-specialized private equity investors to include public equity, mezzanine debt and even commercial banks. Within these funding sources, the breadth of investors has expanded beyond agriculture-focused investors to more mainstream investors, especially those with an interest in Environmental, Social and Corporate Governance (ESG) investing.
More from The Packer: Deep dive on the economics of greenhouse growing
Despite all of the investment, the vast majority of produce grown in CEA’s across North America consists of tomatoes, cucumbers, peppers, and lettuce, and leafy greens (“The Big 4”). Most of the lettuce and leafy greens are coming from CEA’s in the U.S. In Canada, The Ontario Greenhouse Vegetable Growers include 220 members producing tomatoes, cucumbers, and peppers on over 3,000 acres of greenhouse.
In my opinion, the next leap for the industry will be expanding the breadth of products. Specifically, focusing on products the taste of which is highly important to the consumer. A strawberry, for example, is a more important purchasing decision to the average consumer compared to lettuce. Lettuce is much more likely to be eaten as part of a salad along with a variety of other ingredients. Today, you can buy at mainstream retail locations a greenhouse-grown strawberry likely grown by Mucci Farms in Ontario or Mastronardi’s Green Empire Farms in New York.
Consumer demand will continue to drive product expansion. Meeting that demand will be possible through further investment in the CEA space. Although investment has been growing, it has not met the levels of other industries where many billions of dollars have been invested on an annual basis. Investment levels in CEA are likely to become far greater over the near future as some of the largest investors in the world are focused on investments that meet and exceed ESG standards.
More from The Packer: On tour with AeroFarms
Efficient vertical farms and greenhouses meet and exceed ESG standards. The farms are closed-loop systems where everything that goes into the farm is contained and recycled. Additionally, as the environment is fully controlled, only the precise amounts of inputs are added so as to limit excess waste. Lastly, a controlled environment allows for plants to grow without chemicals and pesticides.
Combining consumers’ desire for more locally-grown produce throughout all seasons of the year with increased investor appetite should drive great growth across the industry for years to come. I believe the biggest leap will be new and exciting products coming from indoor farms. This will all be enhanced with incremental improvements in product taste, farm efficiency, and additional varieties within The Big 4 and other products to come.
Peter Tasgal is a Boston-area food agriculture consultant focused on controlled environment agriculture.
Founders Future: A New Fund For Impact Startups
The fund's particularly interested in vertical farming, circular economy, mobility and alternative packaging
The Fund's Particularly Interested In
Vertical Farming, Circular Economy,
Mobility, And Alternative Packaging.
BY FREYA PRATTY
15 FEBRUARY 2021
Founders Future, a French investment firm for European startups, is launching a new fund focused on supporting the next generation of impact-driven entrepreneurs.
MARC MENASÉ
Founding partner
The fund is the firm’s second and will focus on seed and Series A investments. It’s targeting a close of €50m and has raised €20m of that so far. Most of the money has come from angel investors, including Thierry Gillier, the founder of clothing brand Zadig and Voltaire; Bris and Yves Rocher, from the French cosmetics brand Rocher; and Michael Benabou.
The fund’s primary goal is finding impact-driven startups that show transformative potential, explains serial French tech entrepreneur Marc Menasé, who started Founders Future.
“Impact is everything now,” he says. “The consumer now wants to buy products that are more respectful across many criteria, and employees want to work for companies that take into account their impact on the planet and other ESG criteria.”
Founders Future is particularly interested in finding startups working on vertical farming, last-mile delivery, mental health, mobility, cleaner alternatives to packaging, and those working on the circular economy.
It’s a slightly different focus to the firm’s first fund, which looked to invest in the future of work, the future of banking, and the future of health. This included investments into French fintechs Lydia, Alma, October, and Memo Bank.
The food industry
Within the sectors Founders Future is now looking to fund, Menasé is particularly excited by startups looking to transform the food industry.
“I came to impact investing through the food transition,” he says, “and I’m super keen to fund projects in the food transition, I really have this in the gut — not meaning to make a joke there.”
One of the companies Menasé founded himself is Epicery, a delivery service for fresh grocery products, and he’s made investments in dark kitchen company Taster and Yuka, an app that tells you what’s in your food.
Founders Future also has a ‘venture studio’ within it to build new companies. The latest being created is focused on food — dietary supplement company Epycure.
Analyzing impact
Within its straight investment arm, Founders Future has developed a “highly structured way to invest”, Menasé says.
“We have new software called Zei which we use to assess businesses. Along with the founders, we plug in all the information we have about a startup and then we can share their impact trajectory, highlighting areas they need to improve on.”
The software could highlight that a company needs to change to a renewable energy supplier for its manufacturing process, for example, and that would be set as a target for a quarter.
“We want to back products that will make the 21st-century cleaner,” Menasé says. “Tech has incredible leverage in that and there’s a great younger generation of mission-driven entrepreneurs, we see real ambition for income in this group.”
Freya Pratty is Sifted’s news reporter. She tweets from @FPratty