Welcome to iGrow News, Your Source for the World of Indoor Vertical Farming
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.
USA - FLORIDA: St. Pete’s Brick Street Farms Gets Multi-Million-Dollar Investment From Lykes Bros
Lykes Bros., one of the oldest and largest agribusinesses in Florida, is putting a big bet on the future of farming as it invests in Brick Street Farms, an urban farm, and market in St. Petersburg
May 20, 2021
Photo credit: Brick Street Farms
Lykes Bros., one of the oldest and largest agribusinesses in Florida, is putting a big bet on the future of farming as it invests in Brick Street Farms, an urban farm and market in St. Petersburg.
Lykes is making a “significant” investment in Brick Street Farms, the two companies announced at a news conference Thursday. The amount of investment was not disclosed, but a news release described it as “multi-million dollar” investment. Lykes will take a 20 percent ownership stake in Brick Street Farms because of the deal, Mallory Dimmitt, vice president of strategic partnerships at Lykes, told the St. Pete Catalyst.
Brick Street Farms will use the investment to accelerate the expansion of Brick Street Farms hubs, an all-inclusive onsite farming and retail shopping experience in urban cores, said Shannon O’Malley, founder and CEO. The company has self-contained, environmentally sustainable THRIVE containers that will be placed in each hub. Each hub will grow between 16 to 20 acres of farmland on one-third acre lots.
Mallory Dimmitt, vice president at Lykes Bros., announces investment in Brick Street Farms while Nikki Fried, Florida Ag Commissioner, looks on.
The first new hub will open in St. Petersburg’s Warehouse Arts District in late 2021, with an expansion to Tampa in early 2022 followed by more hubs on the east coast, O’Malley said.
“We are the future of farming, and our new investors have the perfect expertise to help us take our successful business model in sustainable farming to feed more people healthy food,” O’Malley said.
The two companies first connected in November at the Florida-Israel Agriculture Innovation Summit, hosted by the Florida Department of Agriculture and Consumer Services, said Nikki Fried, Florida Department of Agriculture Commissioner.
The collaboration meets several goals, including feeding people in urban locations, fighting urban food deserts and food insecurity, bringing farm-to-fork produce closer to people and bringing cutting edge agriculture technology to everyone.
From left, Tampa Mayor Jane Castor, St. Petersburg Mayor Rick Kriseman and Shannon O’Malley, founder and CEO, Brick Street Farms
Brick Street Farms is a hub of innovation and creativity and is the only female-founded and led company in the vertical farming industry, said St. Petersburg Mayor Rick Kriseman. He also highlighted the work of the company’s non-profit Desert Farms Foundation.
“Not only is Brick Street Farms working to make us healthier by providing us some of the best and freshest food around, but through its 501c3, Brick Street Farms is working to end food deserts through the Tampa Bay area,” Kriseman said.
Every urban environment struggles with food deserts, said Tampa Mayor Jane Castor.
“The problems that occur from those food deserts are often times for many communities insurmountable. This is a solution to so many problems,” Castor said.
She also praised the company’s business model. It is financially successful by providing produce to a number of restaurants, Castor said.
While an urban focus might seem like an unusual fit for company like Lykes, which owns hundreds of thousands of rural acres throughout the state, “We know from our experience that innovation is what moves the agriculture industry forward,” said Dimmitt, who will join the Brick Street Farms board of directors.
“In addition to innovations in sustainable production and the technology it uses, the job opportunities and related job training and skills are key to Florida’s future and to our health and wellness,” Dimmitt said. “What could be better medicine than high-quality nutrient-dense greens grown close to the consumer where they have direct access, all while creating community.”
Brick Street Farms, at 2233 3rd Ave. S. was founded in 2016 by O’Malley and her husband, Brad Doyle. Read more about O’Malley in St. Pete Catalyst‘s Hustle profile.
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.
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.”
AeroFarms To Go Public in $1.2 Billion Spring Valley SPAC Deal
AeroFarms was established in 2004. The company’s goal is to, “Transform agriculture by building and operating environmentally responsible farms throughout the world.”
APRIL 4, 2021
New Jersey-based company AeroFarms is set to go public in a $1.2 billion Spring Valley SPAC deal. AeroFarms was established in 2004. The company’s goal is to, “Transform agriculture by building and operating environmentally responsible farms throughout the world.”
According to a recent Bloomberg report, AeroFarms will go public in a merger with Spring Valley Acquisition Corp. Thanks to the pending merger, the two companies will have a combined equity value of $1.2 billion. AeroFarms was co-founded by David Rosenberg, Ed Harwood, and Marc Oshima. Rosenberg now serves as the CEO. Harwood is the Chief Science Officer, and Oshima is the Chief Marketing Officer.
AeroFarms: An Explainer
How does AeroFarms achieve its aim of transforming agriculture? The company utilizes a technique called indoor vertical farming. The benefits of indoor vertical farming include reduced space which results in greater productivity per square foot.
AeroFarms says this method makes productivity per square foot 390 times more effective than traditional farming methods.
The indoor vertical farming method also, as AeroFarm purports, results in using 95% less water and zero pesticides. AeroFarms has a smart strategy for keeping plants healthy. This includes a combination of smart aeroponics, light, nutrition, data, substrate, pest management, and scaling.
The AeroFarms method means that the agriculture involved is fully controlled by one entity. This allows AeroFarms complete control over every aspect of greens, herbs, and more that they grow for clients.
From the size, color, shape, and most importantly, the flavor, AeroFarms has complete control. Besides curating custom greens for food clients, AeroFarms also sells their own products at local retailers that are called Dream Greens. According to AeroFarms, Dream Greens are grown on indoor vertical AeroFarms locations in New Jersey. They are organic, pesticide-free, and non-GMO.
Potential clients can choose to use AeroFarms’ food service. The benefits of their customized food service includes year-round availability, a longer shelf life, consistent pricing, no weather interruptions, heirloom greens varieties and more.
More About AeroFarms
The AeroFarms technology was named one of TIME’S best food and drink inventions of 2019. Some of AeroFarms other financial partners include Ikea, Prudential, and Goldman Sachs. Rosenberg, who is also the CEO of AeroFarms said this about the upcoming merger and initial public offering via a Business Wire report.
“At AeroFarms, our mission is to grow the best plants possible for the betterment of humanity, and we are executing on this by taking agriculture to new heights with the latest in technology, innovation and understanding of plant science. Our technology empowers our operations – this is how we get closer to where the problems, opportunities, and solutions are. We also have the capabilities to innovate fast by turning our crops a typical 26 times per year that allows us to continuously learn and improve yield and quality while simultaneously reducing capital and operating costs.”
After the merger is completed and closed, AeroFarms will be publicly traded on Nasdaq under the ticker ARFM. The official date for the AeroFarms IPO has yet to be confirmed.
Published in Business and News
Katherine Stinson
Katherine Stinson is an award-winning journalist and Staff Reporter at Grit Daily News, where she covers Texas and Southern states' startup and entrepreneurship news. Based in San Antonio, Texas, she also contributes to ScreenRant, Outlander TV News, and San Antonio Magazine.
Real Leaf Farm Receives Significant Endorsement By Just Transition Commission Through The Award of €1 million In Grants.
The JFT awarded projects that represented innovative and inspiring plans for the Midlands and who are committed to creating a green and sustainable economy for the region
Real Leaf Farm receives significant endorsement by Just Transition Commission through the award of €1 million in grants. This recognizes Real Leaf Farm’s role in creating a green and sustainable economy for the Midlands.
Real Leaf Farm (RLF) is delighted to be been selected as one of the key projects in the Midlands under the Just Transition Fund (JFT). The JFT awarded projects that represented innovative and inspiring plans for the Midlands and who are committed to creating a green and sustainable economy for the region.
Real Leaf Farm’s mission is to grow fresh, nutritious leafy greens for the local food market using sustainable farming methods that have low environmental impact. The elimination of herbicides and pesticides not only makes RLF a provider of clean, natural, food products but is better for the environmental, leaving no residues behind.
Speaking at the launch, Real Leaf Farm CEO, Karen Hennessy said “RLF is developing a scalable sustainable business - generating income, creating jobs, providing innovative solutions to food production and supporting Midland communities while aligning to the region’s natural strengths in horticulture. The award today of €1 million is a significant endorsement by the government of these plans and I would like to sincerely thank the Just Transition Commission and the Department of the Environment, Climate and Communication”.
Commenting on the grant award, Eddie Kilbane, Founder of Real Leaf Farm said “the development of Sustainable Smart Hydroponic Farming, in Ireland as a whole, will play an important role in social well-being and strengthen self-sufficiency, by diminishing risks connected to the reliance on the global food production system, and long delivery chains; thus creating more resilient communities”.
The first site is planned for the Midlands partnering with Bord na Móna. RLF will repurpose underutilized buildings and to build a new, state of the art, glasshouse thereby reusing and conserving old buildings and bringing jobs back into the peatlands community.
For further information on Real Leaf Farm please visit www.realleaffarm.com
-ENDS-
For further press information, please contact:
Karen Hennessy at khennessy@realleaffarm.com
About Real Leaf Farm
RLF is a new agri-tech company leading the development of sustainable hydroponic farming across Ireland and the UK. It is a pioneering and disruptive business which will be Ireland’s first 100% Hydroponic farm, growing delicious pesticide-free, herbicide-free, salad vegetable produce, 365 days a year. This is smart farming for a sustainable planet in the 21st century.
Through its unique Agri-Tech Solution, RLF has total control over variables like climate and light and uses significantly less land and water compared to conventional outdoor farming. By combining cutting edge technology and design with optimal agriculture methods, RLF is making fresh, nutrient-rich, and tasty food accessible locally, throughout the year, whilst minimizing wastage, excessive transport and ensuring food security.
There is a unique opportunity to be first to market, in a growing sector, through import substitution and the development of a more efficient and sustainable farming model. This project will deliver direct and indirect employment for transition impacted communities, providing sustainable, safe and secure food for local supply. It is also a Brexit solution provider as most of our imports are currently traveling through the UK land bridge.
About Just Transition Fund
The Just Transition Fund is a key pillar of the government’s just transition plan for the Midlands region. A 2020 fund will be available for projects focusing on retraining workers and proposals to generate sustainable employment in the green enterprise in the region, and supporting communities to transition to a low carbon economy.
The objective of the Just Transition Fund 2020 call is to fund innovative projects that contribute to the economic, social, and environmental sustainability of the Wider Midlands region and which have employment and enterprise potential. It will support projects that take a whole-of-Midlands strategic approach and complement other sources of public funding.
Provisional offers of funding, totaling €27.8 million, have been made to 47 projects in the Midlands under the Just Transition Fund. The projects represent innovative and inspiring plans from businesses, local authorities, and communities in the Midlands who are committed to creating a green and sustainable economy for the region. This dedication from the community and targeted support will make the region an attractive and sustainable place to live and work. It will fund training and reskilling so local businesses and communities can adjust to a low-carbon transition.