Vertical Farming Gets Real: Bowery Farming Raises $20M For Its 'Post-Organic' Warehouse Farm

Vertical Farming Gets Real: Bowery Farming Raises $20M For Its 'Post-Organic' Warehouse Farm

Amy Feldman ,  FORBES STAFF  - I write about entrepreneurs and small business owners.  

Bowery Farming co-founder and CEO Irving Fain: "We are a tech company that is thinking about the future of food."  Courtesy of Bowery Farming

As indoor farming goes from fantasy to reality, Bowery Farming raised $20 million for its “post-organic” vertical farm from a group of investors, including General Catalyst, GGV Capital and GV (formerly Google Ventures), better known for betting on technology than on agriculture.

The new financing, announced this morning, brings Bowery’s total take to $27.5 million. The company declined to disclose valuation, but it’s clearly a big bet on something that for many years had been little more than a dream. “We are a tech company that is thinking about the future of food,” says Bowery’s co-founder and CEO Irving Fain.

Bowery’s indoor farming – its first farm is in a Kearny, N.J., warehouse – relies on proprietary computer software, LED lighting and robotics to grow leafy greens without pesticides and with 95% less water than traditional agriculture. By locating near cities, indoor farms, like Bowery’s, can also cut the transportation costs and environmental impact of getting food to an increasingly urban population. And by controlling its indoor environment, Bowery can produce its greens 365 days a year. The result: Bowery can produce 100 times more greens than a traditional outdoor farm occupying the same-sized footprint.

With the global population rising at breakneck speed, farmland shrinking, and increasing numbers of people moving to urban areas, the idea of creating vertical farms in cities that would produce food more efficiently has long been a dream. Dickson Despommier, an emeritus professor of biology at Columbia University, had long promulgated this idea (as I wrote about a decade ago in Popular Science). But it’s only recently that technological advances in both data analytics and LED lighting have allowed such an approach to be done at scale.

“We think the industry is more or less near an inflection point,” says GGV managing partner Hans Tung. “It is no longer just a pie-in-the-sky theory. It has the chance to scale in the next five years.”

Fain, 37, who started his career as an investment banker at Citigroup, ran marketing at iHeartMedia and co-founded CrowdTwist, which provides loyalty marketing software for major brands, before turning to food. In October 2014, he teamed up with David Golden, who had previously cofounded and run LeapPay, and Brian Falther, who had worked as a mechanical engineer in automotive manufacturing. They began looking at the ways technology might enable better farming. “Industrialized farming is not sustainable,” Fain says. “I became really obsessed with how do you provide fresh food to those urban environments in a way that is more sustainable and more efficient.”

Bowery raised its first financing from First Round Capital, Box Group, Lerer Hippeau Ventures, Blue Apron CEO Matt Salzberg, and chef Tom Colicchio, whose restaurants Craft and Fowler & Wells have Bowery’s greens on the menu. The company has tried growing 100 different crops in its Kearney warehouse farm, and currently sells six varieties of leafy greens, including butterhead lettuce and baby kale, to Whole Foods and Foragers markets. Pricing is similar to organics, at $3.99 for a 5-ounce container.

Advances in LED lighting have enabled indoor farming to be done at scale. 

Courtesy of Bowery Farming

Bowery isn’t the only one to try to do vertical farming at scale. Competitors including AeroFarms and Plenty United, which are also farming indoors with the capacity to produce millions of pounds of greens. AeroFarms has raised more than $100 million for its indoor farms, while Plenty United counts billionaires Jeff Bezos and Eric Schmidt among its backers.

Technological advances from data analytics to robotics have enabled vertical farmers to turn old warehouses and steel factories to new, agricultural uses. Bowery Farming uses its own BoweryOS proprietary software program to analyze millions of data points that can impact a plant’s growth rate or flavor. Meanwhile, all indoor farms have benefited from advances in LED lighting, which can mimic natural sunlight. Pot farmers have used LED lights to grow their plants, but relying on LED lighting for industrial-scale farming has only become possible as the cost has come down. “The fundamental change is what’s happened in LED lighting,” Fain says. “The cost of the fixtures dropped by over 85%, and the efficacy of the fixtures doubled, so what had been possible only in labs became possible in a commercially viable way. Without that trend, you couldn’t have done this.”

With the new funding, Fain says, Bowery plans to hire more people (it currently has just 12 employees), to set up additional farms (first in the tri-state area and then near other cities across the U.S.), and to move beyond leafy greens to other types of produce that could be farmed indoors. Longer term, the big opportunity may be further afield, in China and other emerging markets, where populations are massive, and food security is a hot topic. Says Tung: “This will scale beyond the U.S. to other emerging markets. It is definitely needed.”

Follow me on Twitter @amyfeldman