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Berlin-Based Infarm Raises €144 Million During Pandemic To Grow Largest Urban Vertical Farming Network In The World
Founded in Berlin in 2013 by Osnat Michaeli and the brothers Erez and Guy Galonska, Infarm is dedicated to creating a future where local super fresh produce is available for everyone
September 17, 2020
Today German startup Infarm, one of the world’s fastest-growing urban farming networks, has announced an approx. €144 million investment raised in the first close of a Series C funding round expected to reach around €169 million. Led by LGT Lightstone, the first round included participation by investors Hanaco, Bonnier, Haniel, and Latitude and was supported by existing Infarm investors Atomico, TriplePoint Capital, Mons Capital, and Astanor Ventures.
Founded in Berlin in 2013 by Osnat Michaeli and the brothers Erez and Guy Galonska, Infarm is dedicated to creating a future where local super fresh produce is available for everyone. The farms are placed in various locations in the city, like supermarkets, restaurants, and distribution centers, so that vegetables grow and are harvested close to the moment of purchase or consumption.
These controlled, growing environments are connected to a central cloud-based farm-brain which gathers more than 50,000 data points through a plant’s lifetime, allowing the platform to learn, adapt and improve itself constantly so that every plant grows better than the one before. This modular, data-driven, and distributed approach — a combination of big data, IoT, and cloud analytics, in addition to rapid growth at a global scale — sets Infarm apart from any other urban farming solution.
With a mix of equity and debt financing, the scaleup’s fresh capital infusion brings Infarm’s total funding to date to more than €254 million, underscoring consumer and retailer appetite for Infarm’s innovative approach to fresh, sustainable and local food production in the wake of this year’s pandemic. By 2025, Infarm’s farming network is expected to reach more than 5,000,000 square feet to become the largest distributed farming network in the world as it builds towards helping cities become self-sufficient in their food production.
The investment will be used to deepen the regional and local reach of Infarm’s global farming network and complete the development of Infarm’s new generation of vertical cloud-connected farms, capable of generating the crop-equivalent of acres of farmland and amplifying the diversity of produce currently available through vertical farming. An integration of advanced engineering, software and farming technology, these farms will save labor, land, water, energy, and food-miles while contributing to a more sustainable food system.
Erez Galonska, Co-founder and CEO of Infarm said: “The coronavirus pandemic has put a global spotlight on the urgent agricultural and ecological challenges of our time. At Infarm, we believe there’s a better, healthier way to feed our cities: increasing access to fresh, pure, sustainable produce, grown as close as possible to people. As we scale to 5,000,000 sq ft in farming facilities across Europe, North American and Asia by 2025, this investment will help us make a truly global impact through our network, preserving the thousands of acres of land, millions of liters of water, and ultimately change the way people grow, eat and think about food.”
In the past 12 months alone, Infarm has formed new partnerships with the world’s largest retailers, including Albert Heijn (Netherlands), Aldi Süd (Germany), COOP/Irma (Denmark), Empire Company Ltd (Sobeys, Safeway, Thrifty Foods – Canada), Kinokuniya (Japan), Kroger (United States), Marks & Spencer (United Kingdom) and Selfridges (United Kingdom), driving market expansion beyond Germany, France, Luxembourg and Switzerland to the United Kingdom, the United States, Canada, Denmark, the Netherlands, and Japan.
With operations across 10 countries and 30 cities worldwide, Infarm harvests 500,000+ plants monthly and growing while using 99.5% less space than soil-based agriculture, 95% less water, 90% less transport and zero chemical pesticides. Today, 90% of electricity use throughout the Infarm network is from renewable energy and the company has set a target to reach zero emission food production next year.
Dharmash Mistry, Partner of LGT Lightstone said: “We are excited to partner with the Infarm team to accelerate their urban vertical farm vision, ultimately creating a more sustainable food system for a growing population. Fresher, tastier & healthier food using 95% less land & water, no pesticides and 90% less transport. With over $1 billion of customer demand, partnerships with 17 of the top 50 global grocers, Infarm is set to revolutionize the market behind a unique ‘demand led’ modular business model. We look forward to working with Erez, Guy & Osnat to create a better, healthier & tastier future.”
Pasha Romanovski, Co-founding Partner of Hanaco Ventures said: “We are big believers in vertical farming as we see the traditional industry going through (much needed) rapid disruption these days. We were deeply impressed by Infarm’s founders and management, with their ability to move fast and execute. What is extremely appealing about Infarm is their innovative and modular approach, using cutting edge technology that unlocks added value throughout the supply chain, benefiting both the retailers and end-customers. We see a massive demand in the market for sustainable, environment-friendly, and healthy food – and Infarm has just the right team in place to make this happen.”
Infarm Raises $170M In Equity And Debt To Continue Building Its ‘Vertical Farming’ Network
That’s likely a testament to the speed of new retail partnerships over the last 12 months. They include Albert Heijn (Netherlands), Aldi Süd (Germany), COOP/Irma (Denmark), Empire Company’s Sobeys, Safeway and Thrifty Foods (Canada), Kinokuniya (Japan), Kroger (U.S.) and Marks & Spencer and Selfridges (U.K.)
September 17, 2020
Image Credits: Infarm
Infarm, the vertical farming company that has built a network of urban farms to grow fresh food closer to consumers, has raised $170 million in new investment in a “first close” of a Series C.
Leading the round — which is expected to reach $200 million and is a mixture of equity and debt — is LGT Lightstone, with participation from Hanaco, Bonnier, Haniel, and Latitude. Existing Infarm investors Atomico, TriplePoint Capital, Mons Capital, and Astanor Ventures also followed on. It brings the company’s total funding to date to more than $300 million.
That’s likely a testament to the speed of new retail partnerships over the last 12 months. They include Albert Heijn (Netherlands), Aldi Süd (Germany), COOP/Irma (Denmark), Empire Company’s Sobeys, Safeway and Thrifty Foods (Canada), Kinokuniya (Japan), Kroger (U.S.) and Marks & Spencer and Selfridges (U.K.).
With operations across 10 countries and 30 cities worldwide, Infarm says it now harvests more than 500,000 plants monthly, and in a much more sustainable way than traditional farming and supply chains. Its modular, IoT-powered vertical farming units claim to use 99.5% less space than soil-based agriculture, 95% less water, 90% less transport, and zero chemical pesticides. In addition, 90% of the electricity used throughout the Infarm network is from renewable energy and the company has set a target to reach zero emission food production next year.
Founded in 2013 by Osnat Michaeli, and brothers Erez and Guy Galonska, Infarm’s “indoor vertical farming” system is capable of growing herbs, lettuce and other vegetables. It then places these modular farms in a variety of customer-facing city locations, such as grocery stores, restaurants, shopping malls and schools, thus enabling the end-customer to actually pick the produce themselves. To further scale, it also installs Infarms in local distribution centers.
The distributed system is designed to be infinitely scalable — you simply add more modules, space permitting — whilst the whole thing is cloud-based, meaning the farms can be monitored and controlled from Infarm’s central control center. It’s also incredibly data-driven, a combination of IoT, Big Data and cloud analytics akin to “Farming-as-a-Service.”
The idea, the founding team told me back in 2017 when I profiled the nascent company, isn’t just to produce fresher and better-tasting produce and re-introduce forgotten or rare varieties, but to disrupt the supply chain as a whole, which remains inefficient and produces a lot of waste.
“Behind our farms is a robust hardware and software platform for precision farming,” explained Michaeli at the time. “Each farming unit is its own individual ecosystem, creating the exact environment our plants need to flourish. We are able to develop growing recipes that tailor the light spectrums, temperature, pH and nutrients to ensure the maximum natural expression of each plant in terms of flavor, color and nutritional quality.”
On that note, I caught up with two of Infarm’s founders to get a brief update on the Berlin-headquartered company and to dive a little deeper into how it will continue to scale.
TechCrunch: What assumptions did you make early on that have turned out to be true or, more interestingly, not panned out as expected?
Osnat Michaeli: When we first chatted about four years ago, we were 40 people in Berlin, and much of the conversation centered around the potential that our approach to urban vertical farming might have for retailers. While for many it was intriguing as a concept, we couldn’t have imagined that a few years later we would have expanded to almost 10 countries (Japan is on its way) and 30 cities, with partnerships with some of the largest retailers in the world. Our assumptions at the time were that retailers and their customers would be attracted to the taste and freshness of produce that grew right in front of them in the produce section, in our farms.
What we didn’t anticipate was how much and how quickly the demand for a sustainable, transparent, and modular approach to farming would grow as we, as a society, begin to feel the impact of climate change and supply chain fragility upon our lives, our choices and our food. Of course, we also did not anticipate a global pandemic, which has underscored the urgency of building a new food system that can democratize access to high-quality, amazing-tasting food, while helping our planet regenerate and heal. The past few months have confirmed the flexibility and resilience of our farming model, and that our mission is more relevant than ever.
In terms of signing on new retailers, based on your progress in the last 12 months, I’m guessing this has gotten easier, though undoubtedly there are still quite long lead times. How have these conversations changed since you started?
Erez Galonska: While lead times and speed of conversations can vary depending upon the region and retailer. In mature markets where the concept is familiar and we’re already engaged, deal conversations can reach maturity in as little time as three months. Since we last spoke we are already working with most of the leading retailers that are well established in Europe, the U.K., and North America. Brands which in each of their markets are both forerunners in a retail industry rapidly evolving to meet the demand for consumer-focused innovation, while proving that access to sustainable, high-quality, fresh, and living produce is not only possible, but can be available in produce aisles today, and every day of the year, with Infarm.
I’m interested to understand where Infarms are installed, in terms of if the majority is in-store and consumer-facing or if the most scalable and bulk of Infarm’s use cases are really much larger distribution hubs in cities or close to cities, i.e. not too far away from places with population/store density but not actually in stores. Perhaps you can enlighten me on what the ratio looks like today and how you see it developing as vertical farming grows?
Erez Galonska: Today across our markets, the split between our farms in stores and in distribution centers is roughly 50/50. However, as you anticipate, we will be expanding our network this year with many more distribution hubs. This expansion will likely lead to an 80/20 split as early as next year, with the majority of our regions being served with fresh, living produce delivered throughout the week from centrally located hubs. This not only offers retailers and restaurants flexibility in terms of volumes of output, and the ability to adapt the presentation of our offerings to floor areas of different sizes, but it also allows us to begin to serve whole regions from our next-generation farms under development today.
Based in our hubs, these farms will deliver the crop equivalent of an acre or more of fresh produce on a 25 m2 footprint, with significant further savings in energy, water, labor and land use. We believe this technology will truly challenge ideas of what is possible in sustainable, vertical farming and we look forward to talking about it more soon.
Lastly, what are the main product lines in terms of food on the shelves?
Osnat Michaeli: We have a catalog of more than 65 herbs, microgreens, and leafy greens that is constantly growing. Our offerings range from the known and common varieties like Coriander, Basil, or Mint, to specialty products like Peruvian Mint, Red Veined Sorrel or Wasabi Rucola.
Because our farms give us excellent control over every part of a plant’s growth process and can imitate the complexity of different ecosystems, we will be able to expand the diversity of Infarm produce available to consumers to include root vegetables, mushrooms, flowering crops, and even superfoods from around the world in the near future. What you see today with Infarm is still only the beginning.