Little Leaf Farms Raises $90M to Grow Its Greenhouse Network

by Jennifer Marston

Image from: Little Leaf Farms

Massachusetts-based Little Leaf Farms has raised $90 million in a debt and equity financing round to expand its network of hydroponic greenhouses on the East Coast. The round was led by Equilibrium Capital as well as founding investors Bill Helman and Pilot House Associates. Bank of America also participated.

Little Leaf Farms says the capital is “earmarked” to build new greenhouse sites along the East Coast, where its lettuce is currently available in about 2,500 stores. 

The company already operates one 10-acre greenhouse in Devins, Massachusetts. Its facility grows leafy greens using hydroponics and a mixture of sunlight supplemented by LED-powered grow lights. Rainwater captured from the facility’s roof provides most of the water used on the farm. 

According to a press release, Little Leaf Farms has doubled its retail sales to $38 million since 2019. And last year, the company bought180 acres of land in Pennsylvania on which to build an additional facility. Still another greenhouse, slated for North Carolina, will serve the Southeast region of the U.S. 

Little Leaf Farms joins the likes of Revol Greens, Gotham Greens, AppHarvest, and others in bringing local(ish) greens to a greater percentage of the population. These facilities generally pack and ship their greens on the day of or day after harvesting, and only supply retailers within a certain radius. Little Leaf Farms, for example, currently servers only parts of Massachusetts, Pennsylvania, New York, and New Jersey. 

The list of regions the company serves will no doubt lengthen as the company builds up its greenhouse network in the coming months.

Is AppHarvest the Future of Farming?

Special purpose acquisition companies, or SPACs, are red-hot right now, with investors clamoring to get into promising young companies.

In this video from Motley Fool Live, recorded on Jan. 28, Industry Focus host Nick Sciple and Motley Fool contributor Lou Whiteman discuss AppHarvest, one such SPAC that is looking to disrupt the agriculture industry. Here are the details on what AppHarvest wants to do, and a look at whether the company represents the future of farming.

Nick Sciple: One last company I wanted to talk about, Lou, and this is one I think it's -- you pay attention to, but not one I'm super excited to run in and buy. It was a company called AppHarvest. It's coming public via a [SPAC] this year. This vertical farming space. We talked about Gladstone Land buying traditional farmland. AppHarvest is taking a very different approach, trying to lean into some of the ESG-type movements.

Lou Whiteman: Yeah. Let's look at this. It probably wouldn't surprise you that the U.S. is the biggest global farm exporter as we said, but it might surprise you that the Netherlands, the tiny little country, is No. 2. The way they do that is tech: Greenhouse farm structure. AppHarvest has taken that model and brought it to the U.S. They have, I believe, three farms in Appalachia. The pitches can produce 30x the yields using 90% less water. Right now, it's mostly tomatoes and it is early-stage. I don't own this stock either. I love this idea. There's some reasons that I'm not buying in right now that we can get into. But this is fascinating to me. We talked about making the world a better place. This is the company that we need to be successful to make the world a better place. The warning on it is that it is a SPAC. So it's not public yet. Right now, I believe N-O-V-S. That deal should close soon. [Editor's note: The deal has since closed.] I'm not the only one excited about it. I tend not to like to buy IPOs and new companies anyway. I think the caution around buying into the excitement applies here. There is a Martha Stewart video on their website talking up the company, which I love Martha Stewart, but that's a hype level that makes me want to just watch and see what they produce. This is just three little farms in Appalachia right now and a great idea. This was all over my watchlist. I would imagine I would love to hold it at some point, but just be careful because this is, as we saw SPACs last year in other areas, people are very excited about this.

Sciple: Yeah. I think, like we've said, for a lot of these companies, the prospects are great. I think when you look at the reduced water usage, better, environmentally friendly, all those sorts of things. I like that they are in Appalachia. As someone who is from the South, I like it when more rural areas get some people actually investing money there. But again, there's a lot of execution between now and really getting to a place where this is the future of farming and they're going to reach scale and all those sorts of things. But this is a company I'm definitely going to have my radar on and pay attention to as they continue to report earnings. Because you can tell yourself a story about how this type of vertical farming, indoor farming disrupts this traditional model, can be more efficient, cleaner, etc. Something to continue paying attention to as we have more information, because this company, like you said, Lou, isn't all the way public yet. We still got to have this SPAC deal finalized and then we get all our fun SEC filings and quarterly calls and all those sorts of things. Once we have that, I will be very much looking forward to seeing what the company has to say.

Whiteman: Right. Just to finish up along too, the interesting thing here is that it is a proven concept because it has worked elsewhere. The downside of that is that it needed to work there. Netherlands just doesn't have -- and this is an expensive proposition to get started, to get going. There's potential there, but in a country blessed with almost seemingly unlimited farmland for now, for long term it makes sense. But in the short term, it could be a hard thing to really get up and running. I think you're right, just one to watch.

Why A Peanut Farmer From South Carolina Created A Facebook For Farmers

Why A Peanut Farmer From South Carolina Created A Facebook For Farmers

OCTOBER 2, 2015 LAUREN MANNING

As a nasty nor’easter hammers the Southeast, hurricane Joaquin lingers just off the Atlantic coast guaranteeing many more days of torrential downpour. For Pat Rogers, a fifth-generation peanut farmer running a 550-acre operation in the small town of Blenheim, South Carolina, the rain is unwelcome.

Peanuts, which grow underneath the topsoil, have to be dug up and flipped over to lie on the soil for a week so they can dry out. The last thing any peanut farmer wants to happen after a “dig up” is rain—let alone the one-two punch of a massive storm and a hurricane.

In prior years, Rogers would have been short on opportunities to commiserate with his farming colleagues about the cruel hand Mother Nature doled out. Thanks to a spark of inspiration and a whole lot of hard work, however, Rogers is hoping to change that for himself and other farmers in the business—and he’s using technology to do it.

“I was at the InfoAg conference in St. Louis during 2014. It’s just a whole bunch of farm tech and I was sitting there in the earliest session, looking around, and thinking, ‘This is great!’” says Rogers tells AgFunderNews. “But, the thing about farming is that so much of it is very rural. It’s not like we can all get together and network very often.”

Rogers returned to Blenheim and quickly set to work creating a way to make invaluable coffee shop chatter, tailgate talk, and barnyard business exchanges a lot more accessible for farmers far and wide. What was one of the first sources Rogers tapped to shape his plan? Entrepreneur Eric Ries’ famous book, The Lean Startup.

Over the summer, Rogers and a team of web developers soft-launched a website called AgFuse, a social media platform dedicated to farmers, and designed to help professionals across the agriculture world connect, share tips, show off their crops, pitch products, and keep in touch. Operating in a similar way to Facebook, with a healthy dose of LinkedIn’s business networking savvy, users can create a profile page, join groups, post messages, and peruse their news feeds to see what’s happening with other farmers in their network.

Building AgFuse’s website from the ground up enabled Rogers and the web development team to create algorithms that help members see the information that’s most relevant to their interests, operations, and needs.

While farm-focused message boards provide a flood of information, AgFuse is calibrated so that users only see postings and information from other members with whom they’ve connected.

For now, the crew is satisfied with its current algorithms, perfecting them is a routine objective. “We have a pretty good system that we are rolling out over the next week or two,” says Rogers.

After observing the soft-launch site and getting feedback from initial users, Rogers, and the AgFuse team, officially launched the site on July 22, 2015. While the platform became an instant hit with Rogers’ local community in South Carolina, he quickly saw users join from around the country and engage with other members.

AgFuse, which Rogers has fully funded himself, has even caught the attention of some venture capital investors. “In the future, that’s hopefully not only a possibility but a reality. Right now we are just focused on building a good product and building our user base,” he says. He also hasn’t ruled out the possibility of monetizing the site to provide members with carefully curated advertisements.

Rogers’ current priorities include site enhancements and building up its user base. They also have some big projects in the works, including a mobile app that is in the final stages of development, and additional AgFuse platforms focused on consolidating farmers’ knowledge around the globe.

According to Rogers, AgFuse is the first farm-centric social media platform of its kind. Although there are a number of message boards dedicated to farming and agriculture topics, he felt they weren’t cutting it when it came to helping farmers make real connections.

“If I sign in from South Carolina and they are talking about crop conditions in Illinois, that doesn’t really pertain to me,” explains Rogers. “You can still learn a lot of general things, but AgFuse’s specific niche is helping farmers find a specific audience.”

Traditional social media platforms haven’t provided a good solution either, tending to involve more talk about play and less talk about business. AgFuse, according to Rogers, is strictly a business affair.

“The content can range anywhere from somebody wanting to show off a good series of coverage crops, to showing a scouting report or weather reports. Somebody just showed a picture of armyworms they found in their soybeans to let everyone know they’ve shown up,” says Rogers.

Although the rain may have dampened Rogers’ hopes for a timely peanut harvest, it’s given him time to work on AgFuse and check in with some of his connections on AgFuse. Today’s news feed was full of reports from other farmers in the region lamenting the weather, with one farmer posting a few pictures of cotton sprouts popping through his plants’ bright white cotton lint—a sure sign that the crop has become oversaturated. Although the news may be a downer, knowing you aren’t the only frustrated farmer in the region has its value.

While agtech is making incredible headway toward helping farmers produce food more efficiently and sustainably, AgFuse is a good reminder not only of the infinite possibilities for technology’s role in agriculture but of how technology can go a long way towards bringing people together.