House, Senate Legislators Lay Groundwork For Urban Agriculture

August 23, 2017

House, Senate Legislators Lay Groundwork For Urban Agriculture

From Daily Report for Executives

By Teaganne Finn

Urban agriculture proponents are hoping two 2016 bills will be reintroduced this year, just in time to be added to the 2018 Farm Bill.

The bills have very different initiatives but similar goals, with hopes to create economic opportunity and show support for farmers and ranchers in urban areas. The separate bills were introduced in 2016 by Sen. Debbie Stabenow (D-Mich.) and Rep. Marcy Kaptur (D-Ohio).

Stabenow introduced the Urban Agriculture Act of 2016 in September of last year outlining a planto establish an Office of Urban Agriculture within the Department of Agriculture and make urban agriculture activities eligible for funding from USDA programs. The bill was referred to the Senate Committee on Agriculture, Nutrition, and Forestry.

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The bill included plans to invest $10 million in cutting-edge research to explore market opportunities and $5 million for tools and equipment to develop community gardens that would provide community-based nutrition education.

“Things have not changed on the ground much since Senator Stabenow held her press conference,” Joan Nelson, executive director of Allen Neighborhood Center in Lansing, Mich., told Bloomberg BNA, “The number of farmers raising crops in our city is gradually and steadily increasing.”

Stabenow’s bill would directly affect community development agencies like Allen Neighborhood Center located on the Eastside of Lansing, where its first urban farm was established eight years ago. They now have approximately nine self-described urban farmers and 26 farmers markets in the Lansing area.

“The support that would have been available by Stabenow is still necessary and important to people in this region,” said Nelson who believes small urban farmers are in need of a lot of initial support especially related to business development.

Stabenow’s office has not announced a plan to reintroduce the bill.

Growing Need, Growing Support

Wes King, policy specialist at National Sustainable Agriculture Coalition, told Bloomberg BNA he would support Stabenow’s bill if she reintroduced it.

“The need is definitely something that still exists and is continuing to grow,” said King, who said he thinks one of the great things about Stabenow’s bill is the “increased awareness about the realities of farming and helping to connect urban and rural communities.”

National Farmers Union President, Roger Johnson told Bloomberg BNA that the challenges for urban farmers are in acceptability but it’s becoming less and less a challenge.

Johnson endorsed Stabenow’s bill in 2016 and said he would support the bill if it is reintroduced, saying it would provide “real economic opportunities.”

Funding for Urban Farmers

Kaptur introduced the Urban Agriculture Production Act of 2016 in December, to establishan outreach program to award grants to support urban farm outreach activities, which greatly differs from Stabenow’s legislation.

The bill was referred to the House Agriculture Committee.

The legislation would amend the Department of Agriculture Reorganization Act of 1994 and expand the purpose and duties of the USDA’s Office of Advocacy and Outreach to include activities just for urban farmers or ranchers. The grants would provide a range of support from infrastructure and land acquisition to education, training, and technical assistance.

Joshua Stewart, communications director for Kaptur, told Bloomberg BNA, in a phone call that Kaptur is planning to reintroduce the bill and drop it in September.

“We are currently finalizing language and seeking original co-sponsors,” said Stewart.

To contact the reporter on this story: Teaganne Finn in Washington at tfinn@bgov.com

To contact the editor responsible for this story: Paul Hendrie at 

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Indoor Farms of America Receives Investment From Major U.S. Ag Firm Co-Alliance

Indoor Farms of America Receives Investment From Major U.S. Ag Firm Co-Alliance

21-08-2017

LAS VEGAS, Aug. 21, 2017 : Indoor Farms of America, LLC is pleased to announce that it has completed the final phase of its initial relationship with Co-Alliance, LLP, one of the nation's oldest, largest and most diverse traditional agriculture companies. This final phase comes in the form of an equity investment in Indoor Farms of America. Terms of the transaction are private.

"When we had our first visit from the folks at Co-Alliance late last year, we expressed our commitment to having traditional agriculture in the U.S. embrace this technology in a manner that would benefit them, and we discussed in detail just how that would take shape," explained David Martin, CEO of Indoor Farms of America.

"Becoming a part owner of Indoor Farms of America represents our belief in its products and people," said Co-Alliance CEO, Kevin Still. "We see the potential of integrating this world class indoor agriculture equipment into traditional farming operations as a way to diversify family farms, add a year-round income stream, and bring the next generation back to the farm."

The new investment comes just weeks after Co-Alliance purchased two "warehouse" style farms, marking an important milestone for the CEA company. "We have achieved the first stage of the plans to have indoor farming adopted by the very folks who have kept us fed in this country since its inception, and that is the traditional farmer," said Martin.

Co-Alliance will pilot these indoor farms with traditional farmers, assessing the capability to diversify income, spread risks, and to supply local fresh produce all year round. Said John Graham, CFO of Co-Alliance, "We are evaluating the commercial application and income generating potential of the farms here in Indiana so when we introduce the technology to our member-growers on a larger scale, we have a turnkey, replicable, scalable complete production process in place." 

"When Dave and I developed the equipment, we embarked on a journey that started 4 years ago and continues with an intense focus on Research and Development. This is an affirmation of the purpose of the journey. Our aeroponic farms have proven reliable in 3 years of test growing of over 30 types of greens, strawberries, cherry tomatoes, peppers, beans and edible flowers. The equipment will produce strong economic results that make it more than viable in the indoor growing environment, more so than any other equipment that exists today, due to far higher yields in a given space," said Ron Evans, President of Indoor Farms of America.

Co-Alliance sees new opportunities for farmers to have a major impact on the "locally grown" food movement. Per Kevin Still, Co-Alliance CEO, "Co-Alliance is positioning itself and its farmer owners to be able to capitalize on the growing consumer demands for truly fresh, locally grown, and high-quality products available to them from local farmers they know and trust, year round. And to do so, we believe investing in Indoor Farms of America is the right way to go about it."

Co-Alliance, LLP, is a partnership of cooperatives with community roots established in the 1920s. Headquartered in Avon, Indiana, its 50 locations across Indiana, Michigan, and Ohio serve the areas of Energy, Agronomy, Grain Marketing, and Swine and Animal Nutrition. For more information, visit www.co-alliance.com. 

Indoor Farms of America, LLC, is leading indoor ag innovation. It has farms installed in countries surrounding the globe, and brings meaningful advancement to indoor agriculture, with a sole purpose to make it economically viable, while creating meaningful jobs for people in any region, including veterans and disabled individuals. 

Indoor Farms of America is dedicated to creating a sustainable food supply for generations to come. The company designs and builds its patented advanced indoor agriculture equipment using a proven, reliable aeroponics method as the foundation of the farm, allowing year-round high yield production, with no sky-lifts or ladders required to operate the farm.

Goodbye, Small Farmer? Investors Could Soon Own Most of American Farmland

Goodbye, Small Farmer? Investors Could Soon Own Most of American Farmland

Today, 30 percent of American farmland is owned by non-operators who lease it out to farmers. Here’s why that’s a problem.

Katy Keiffer posted Aug 08, 2017

This article was originally published by The New Food Economy. It has been edited for YES! Magazine. 

We’re used to thinking of escalating rents as an urban problem, something suffered mostly by the residents of booming cities. So when city people look out over a farm—whether they see corn stalks, or long rows of fruit bushes, or cattle herds roving across wild grasses—the price of real estate is probably the last thing that’s going to come to mind. But the soil under farmers’ feet has become much more valuable in the past decade.

It’s started to change the economics of American agriculture.

While urban commercial real estate has skyrocketed in places such as New York, San Francisco, and Washington, D.C., powerful investors have also sought to turn a profit by investing in the most valuable rural real estate: farmland. It’s a trend that’s driving up costs up for the people who grow our food, and—slowly—it’s started to change the economics of American agriculture.

Today, the United States Department of Agriculture (USDA) estimates that at least 30 percent of American farmland is owned by non-operators who lease it out to farmers.

Think of it this way: If you wanted to buy Iowa farmland in 1970, the average going price was $419 per acre, according to the Iowa State University Farmland Value Survey. By 2016, the price per acre was $7,183—a drop from the 2013 peak of $8,716, but still a colossal increase of 1,600 percent from 1970. For comparison, in the same period, the Dow Jones Industrial Average rose less than half as fast, from 2,633 to 21,476. Farmland, the Economist announced in 2014, had outperformed most asset classes for the previous 20 years, delivering average U.S. returns of 12 percent a year with low volatility.

That boom has resulted in more people and companies bidding on American farmland. And not just farmers. Financial investors, too. Institutional investors have long balanced their portfolios by putting part of their money in natural resources—goldmines and coalfields and forests. But farmland, which was largely held by small property owners and difficult for the financial industry to access, was largely off the table. That changed around 2007. After the stock market collapse, institutional investors were eager to find new places to park money that might prove more robust than the complex financial instruments that crumpled when the housing bubble burst. What they found was a market ready for change. The owners of farms were aging, and many were looking for a way to get cash out of the enterprises they’d built.

And so the real estate investment trusts, pension funds, and investment banks made their move. Today, the USDA estimates that at least 30 percent of American farmland is owned by non-operators who lease it out to farmers. And with a median age for the American farmer of about 55, it is anticipated that in the next five years, some 92 million will change hands, with much of it passing to investors rather than traditional farmers.

What about the people—often tenant farmers—who actually work the land being acquired?

But what about the people—often tenant farmers—who actually work the land being acquired? During the same period that farmland prices started gaining steam, many crop prices have stagnated or fallen. After hitting a high above $8 a bushel in 2012, corn prices today have fallen back to less than $4 a bushel—about what they were 10 years ago, in 2007, when farmland prices first started to soar.

Growing low-cost food, feed, and fuel (corn-based ethanol) on ever-more-expensive land is a tenuous predicament, and it raises a host of questions. Is this a sustainable situation? What happens to small farmers? And are we looking at a bubble that will burst?

How farmland got expensive

Three big factors have contributed to the rapid increase in the prices paid for farmland—which is usually defined to include grazing land and forests—according to Wendong Zhang, an assistant professor of economics at Iowa State University. (Zhang tracks farmland prices, especially Iowa farmland prices, which are among the best documented in the country.)

First, interest rates, since the financial crash of 2007–2008, have been at historic lows, which tends to drive up asset prices. The ethanol market has shown “phenomenal growth,” Zhang says, linked to increasing interest in sustainable fuels. Indeed, if you graph ethanol production over the past 20 years, it shows exactly the same explosive growth as land prices. And as exports to China and elsewhere have increased, farm income has risen. “Farm income is the variable to track” in analyzing land prices, Zhang explains.

Well-heeled investors are snapping up farmland, driving prices up.

But there’s an added factor: well-heeled investors are snapping up farmland, driving prices up. Here’s how the Economist explained it: “Institutional investors such as pension funds see farmland as fertile ground to plough, either doing their own deals or farming them out to specialist funds. Some act as landlords by buying land and leasing it out. Others buy plots of low-value land, such as pastures, and upgrade them to higher-yielding orchards.”

And, says Craig Dobbins, a professor of agricultural economics at Purdue University, “Farmland and other real estate investments are good investments to balance the risk of investments in stocks and bonds. These buyers are sensitive to the expected rate of return that will be received from the purchase of such an investment. If farmland values rise to levels that it does not appear the investment will provide the threshold rate of return, they will not purchase. The location preferences of these buyers are much more flexible than an individual farmer.”

Institutional investors can and do buy land in every region and of every type: cropland in the Corn Belt, rangeland in cattle country, or fruits and nuts in California. Among the big players are TIAA-Cref, BlackDirt, Hancock Agricultural Investment Group, American Farmland Company, AgIS Capital, and Gladstone Land Corporation. Other institutional investors, as well, show a cross section of financial interests in the relatively stable investment that land represents over time. According to RD Schrader, a real estate broker of farmland based in Colorado, “The number of investors is growing, and because of that, it occurs more often and makes the marketplace more fluid. With the downturn in values now, the institutional investors help keep the land values more stable.”

That sounds great if you want to sell land, as many American farmers approaching retirement age do. But from the viewpoint of sustainability, consolidating farmland in the hands of financially oriented landlords has many disadvantages.

Chief among them: The investment entities that own the land can control what’s grown on it and how. A quick look at farmland investment company websites makes it clear that they are very particular about assessing the fertility, the access to water and distribution, and other criteria of the land they are buying. And they favor conventional agriculture—the kind that uses the agro-chemicals, mono-cropping, and extensive tilling that continue to degrade American farmland.

For financial investors, commodity crops are king.

For financial investors, commodity crops are king, and they're unlikely to change their minds anytime soon. As Don Buckloh of the American Farmland Trust put it, “When it comes to crop diversification, it is nearly impossible to shift a commodity operation to something less monolithic. For example, the infrastructure for dealing with products other than corn or soy in Iowa, simply doesn’t exist. So farmers are stuck with having to grow the same crops ad infinitum. It’s a scary proposition because should the ethanol program be dissolved, what will corn farmers do with all that extra corn? Already the prices are so low that farm incomes are projected to be half what they were six or seven years ago. We have no plan B for this type of eventuality.”

Could investment companies become a force for a more ecological approach to agriculture? In theory, yes. BlackDirt Capital, a Connecticut-based firm that specializes in property in the northeastern part of the country, claims to be wholly based on agroecological principles. But that approach is rare and likely to remain so.

Who’s bidding on the land

In practice, our best hope of true stewardship of the land will come from enlightened, committed owner-farmers. But the trend toward treating farmland as a financial investment, and the high prices that have come with it, make it harder and harder for new young farmers to enter the field. Lindsey Schute, Director of the National Young Farmers Coalition points out, “Access to secure, affordable land is the biggest challenge young farmers and ranchers face in this country. With two-thirds of our nation’s farmland set to change hands in the next few decades, we cannot afford to see the price of farmland driven up beyond what a working farmer can compete with.”

In these examples, ownership of the land becomes corporate, but it remains in U.S. hands. In another variant of land investing that’s become increasingly significant over the past few years, ownership—and control over the land and the food it produces—goes overseas.

Ownership of the land becomes corporate, but it remains in U.S. hands.

We’re all familiar with the concept—though going the other way, with multinational corporations from the United States, United Arab Emirates, United Kingdom, Egypt, China, or some other developed nation buying from sellers in developing nations. Investment in farmland is a key strategy for governments anxious to stabilize their food supply and their food prices. By buying land in other countries and farming it, foreign buyers are able to support their domestic food supply and other markets that depend on agriculture without having to compete for essential products on the global market. Foreign investors will buy several hundred thousand acres, say in Africa, to produce palm oil, rubber, or a biofuel. The deals are typically accompanied by promises of jobs, infrastructure, resource development, or just a jolt for the national economy, but all too often, those promises come to nothing. The local population reaps no benefit, they lose their farming rights, access to water, even their homes. Quite often, civil unrest will ensue. Ethiopia at this very moment provides a prime example of this phenomenon.

The new target for farmland investment: The United States. The most recent figures from USDA, dating from 2011, show that roughly 25 million acres, about 2 percent of our national total of 930 million acres, are in foreign hands. And the pace of investment seems to be picking up. In the period since USDA’s 2011 report, foreign investors have gone on shopping sprees in the heartland and beyond. Saudi Arabia and the UAE alone have acquired more than 15,000 acres in Arizona and Southern California to grow fodder for dairy cattle. Italian buyers are reported to have purchased 102,000 acres in Missouri, and New Zealand about 18,000.

The most memorable deal—though most coverage treated it as a corporate acquisition rather than a resource grab—was the 2013 acquisition of America’s largest producer of pork, the Smithfield Company, by a Chinese company called Shuanghui—which subsequently changed its name to the WH Group. The company is an independent entity, but it has received substantial funding from the Chinese government. The government of China now controls more than 400 American farms consisting of about 100,000 acres of farmland, with at least 50,000 in Missouri alone, plus CAFOs (concentrated animal feeding operations), 33 processing plants, the distribution system—and one out of every four American hogs.

Smithfield is a “vertically integrated” company, meaning that it owns everything right down to the feed supply and all the way up the food chain to the many brands of processed and packaged foods distributed throughout the United States and the world. However, one could make the argument that the most important assets within this $4.72 billion sale are the farmland and the water.

One thing that is clear is the lack of a universal national policy governing water rights and water use.

One thing that is clear is the lack of a universal national policy governing water rights and water use. In states that are water insecure in the Southwest, dizzying and arcane regulations are barely equal now to the challenges of current domestic use, much less answering the needs of foreign agriculture. It seems the barest common sense that there should be some federal entity protecting citizens’ rights to water against anonymous industrial agribusiness. As yet that has not happened. And while California and the Southwest would seem the most obvious areas that will face serious water challenges in the future, we have already seen similar drought conditions playing out in other states, such as Nebraska, Kansas, and Oklahoma. Eventually we may find that dry states must be supplied in some measure by wet states. Logic would dictate that laws regarding water use and access should be firmly in place before selling off resources to another nation.

States such as Iowa have banned the sale of farmland to foreign buyers and others have laws that limit the number of acres that can legally be sold, but it can be quite tricky to tell who is doing the buying. Foreign buyers can hide their identity by creating an American corporation, or buying through a U.S. majority-owned subsidiary.

So just how much of our farmland are we willing to sell? And who decides? Most proposed deals must go through the Committee on Foreign Investment in the United States (CFIUS). Established under the Ford Administration in 1975, it has broad powers to accept or deny requests for foreign acquisitions of American companies and land. After September 11, other criteria were included under the jurisdiction of the CFIUS, including food, water, and agriculture. The committee is made up of representatives from 16 government agencies, and chaired by the Secretary of the Treasury. It includes members from the Department of Defense, Homeland Security, the State Department, and the Departments of Commerce, Energy, and Justice, as well as the offices of the U.S. Trade Representative and Science and Technology Policy. Its reviews and deliberations are closed to the public, and decisions are handed down with virtually no transparency.

The risks of ever-expensive land

The dangers of high land prices are obvious—especially for younger farmers who are trying to get established and farmers who want to steer away from Big Ag approaches. The dangers of ownership by large corporations and foreign buyers are equally clear. But another danger to high, rapidly rising land prices is one that brings to mind the great real estate bust of 2007: a bubble. Bubbles can be devastating, leaving small land owners underwater on their mortgages and depriving them of the crucial collateral they need to get loans on operating expenses.

Could the current rise in farm prices be a bubble? Certainly if you read some headlines in Midwestern newspapers, you might get the impression not only that there’s a bubble but that it is in the process of bursting. Though farmland prices are still high, they peaked somewhere around 2013 and have fallen for three years in a row—the first time that’s happened.

“I don’t think it’s a bubble,” Zhang says. “In a bubble, you’ll see dissociation between prices and the value of the underlying assets. This time, when crop prices went down—with corn dropping from six or seven dollars a bushel in 2013 to about half that price today—the land prices dropped with them. And farmers still have some money.”

It’s going to require the progressive wing of farming to rethink its economics.

Don’t get too optimistic—or too pessimistic—just yet, though. Interest rates are creeping up. Farm income, the key factor in determining land prices, has been falling for the past three years from record highs, and USDA is predicting a fourth year of decline. On the other hand, operating costs seem to be going down. And prices in Iowa seem to have ticked up slightly, though that may be just because farmers are holding on to their property, waiting for better prices to return; farmland for sale is in short supply in Iowa. (These insights come courtesy of Professor Zhang. For much, much more, visit the invaluable Iowa Land Portal.)

Zhang himself takes a temperate view: “Despite the deteriorating agricultural financial conditions and continued decline in farm income, the current farm downturn is more likely a liquidity and working capital problem, as opposed to a solvency and balance sheet problem for the entire agricultural sector,” he writes. “Rather than an abrupt farm crisis, we are likely to [see] a gradual, drawn-out downward adjustment to the historical normal return levels for the agricultural economy. The U.S. farmland market [is] likely headed towards stabilization and potentially slightly more modest downward adjustments before bouncing back in the near future.”

If it pans out that way, Zhang’s prediction is probably good news for the economy. Is it good news for a sustainable approach to agriculture rooted in small, independent farms, enlightened farming practices, and short supply chains? That’s less obvious. At the very least, it’s going to require the progressive wing of farming to rethink its economics and its go-to-market strategies and possibly make big changes.

But that is a story for another day.

The Heartland Is Fertile For Ag Tech, But California Is Still King

Image Credit: Pixabay

The Heartland Is Fertile For Ag Tech, But California Is Still King

ANNA HENSEL@AHHENSEL AUGUST 10, 2017 10:30 AM

Last month, San Francisco-based indoor farming startup Plenty scored a win for the California ag tech scene when it secured a $200 million investment from SoftBank’s Vision Fund, one of the largest rounds ever for an ag tech startup. With $2 billion invested in California ag tech startups since 2010, it’s not surprising that California is the most promising place for ag tech — it’s the state with the largest agriculture sector by cash receipts, according to the USDA. But new data from Pitchbook indicates that other states with strong farming sectors are still having trouble cashing in on ag tech.

The good news: Among the 10 states that receive the most ag tech funding are Heartland states like Missouri, Michigan, and Illinois. The bad news: Ag tech startups in California received more funding from January 2010 to June 30, 2017 than all ag tech startups in the other top 10 states for ag tech combined during that same time period. And states like Iowa, Nebraska, and Minnesota — the states with the second, third, and fifth largest agriculture sectors respectively — are nowhere to be seen.

Rob Leclerc, the cofounder and CEO of Agfunder, an online investment platform for ag tech startups, explains that just as in any other sector, ag tech startups have to consider what city will put them in close proximity to their customers, venture capitalists, and good talent before deciding where to place their headquarters. Though states like Iowa and Nebraska have larger agriculture sectors and thus offer ag tech startups closer proximity to more customers, states with smaller, yet still prominent, agriculture sectors like Illinois and Michigan are home to more large universities and cities — and thus larger talent pools, as well as more corporations to potentially partner with.

Jesse Vollmar, the cofounder and CEO of FarmLogs, a startup that provides crop management software to farmers, decided to set up its headquarters in Ann Arbor, Michigan after participating in Y Combinator’s accelerator program in 2012. They settled on Michigan because both Vollmar and his cofounder, Brad Koch, are from there. Additionally, Ann Arbor, home to the University of Michigan, offered FarmLogs close proximity to talent, as well as a major airport that Vollmar and Koch could reach quickly.

“We considered Chicago, but we just didn’t have an established network there,” Vollmar says. “It’s not located in as close proximity to farmers.”

While a high concentration of ag tech funding in California is great for the state, one concern is that it could lead to a lack of diversity in the types of problems that new ag tech startups look to solve.

“If you look at California, there’s a lot of local talent that allows you to solve sort of different types of problems — problems around robotics, around automation. The problems that farmers here often have are specifically around labor,” Leclerc explains. “If you go to the Midwest, what you’re dealing with is much much larger farms; the farms are often so big that you can’t possible go and survey them all entirely, so you really have a big data problem.”

While ag tech startups in places like Iowa and Nebraska may be lacking funding, there’s still plenty of enthusiasm to cultivate a large ag tech sector there. Last year marked the opening of a new ag tech accelerator in Iowa, called the Iowa AgriTech Accelerator, which secured investments from companies such as John Deere and DuPont.

SoftBank Invests in Largest Ever Agtech Deal, a $200m Series B for Indoor Ag Startup

BREAKING: SoftBank Invests in Largest Ever Agtech Deal, a $200m Series B for Indoor Ag Startup

JULY 19, 2017 EMMA COSGROVE

**UPDATE: Added comments from S2G Ventures managing director Sanjeev Krishnan, AeroFarms CEO David Rosenberg***

**UPDATE: Added comments from Plenty CEO Matt Barnard, and AgFunder CEO Rob Leclerc**

Indoor vertical farming company Plenty has raised $200 million in a Series B round of funding, the largest agtech investment to date.

Just one month after the grower acquired indoor agriculture hardware company Bright Agrotech, this round was led by Japan’s SoftBank Vision Fund, a $93 billion, multi-stage tech fund.

Affiliates of Louis M. Bacon, the founder of Moore Capital Management, also joined the round alongside existing investors including Innovation Endeavors, Bezos Expeditions, Chinese VC DCM, Data Collective, and Finistere Ventures.

Plenty uses a vertical growing plane to grow leafy greens in a 52,000 square foot South San Francisco facility. The Series B — which takes total funding for the startup to $226 million — will fuel further expansion and more farms.

One agtech venture capitalist said that Plenty had a pre-money valuation of $500 million, but Plenty CEO Matt Barnard would not confirm this figure. The same venture capitalist said that if that figure was true, the valuation would be “crazy” for a company that appears to be pre-revenue.

But Plenty’s Barnard is confident about Plenty’s “aggressive” expansion plans to improve food quality globally. This expansion will include building farms in Japan, China, and the Middle East, as well as the US.

“This is an enormous investment, which is a testament to the strength of the founders and the strong conviction from Vision Fund in making bets that are true to its mandate,” said Rob Leclerc, CEO of AgFunder. “Plenty is a young company, so there’s going to be a lot of work for their economics to catch up to the valuation, but if they succeed, this will have looked cheap.”

Barnard offered no specific timeline or number of farms in the near-term, saying that the company prefers to announce new locations when all relevant partners are in place. Further, he did not confirm any retail partners for his South San Francisco farm. But he did say that Japan is a priority. “It is one of our top priorities not only because SoftBank is a partner, but there are some specific needs that we plan to fill,” said Barnard.

The CEO said that Plenty used its $1.5 million seed and $24.5 million Series A rounds of financing to prove to investors that the company had the capability to deliver “vegetables and fruits” as good or better than what is currently on the market.

Barnard, who was introduced to SoftBank by an existing investor, confirmed that in addition to leafy greens,  Plenty has successfully grown strawberries, but would not confirm any other crops. He told Bloomberg that cucumbers are on the way as well.

What Plenty has yet to demonstrate is the ability to operate at scale.

Said Barnard, “Operating any farm, anywhere is extremely difficult and requires a lot of diligence, processes, people, and systems. The thing that is hard about investing is that at some point someone has to invest in scale before the scale is there and SoftBank is both visionary and courageous.”

Sanjeev Krishnan of S2G Ventures said that despite the large sums raised, vertical farming is unlikely to be dominated by one name.

“This investment shows the potential of the sector. Indoor agriculture is a real toolkit for the produce industry. There is no winner takes all potential here. I could even see some traditional, outdoor growers do indoor ag as a way to manage some of the fundamental issues of the produce industry: agronomy, logistics costs, shrinkage, freshness, seasonality and manage inventory cycles better. There are many different models that could work and we are excited about the platforms being built in the market.”

In addition to Plenty’s global expansion, this round will go toward hiring in computer science, machine learning, mechanical engineering, crop science, biology among others.

“By combining technology with optimal agriculture methods, Plenty is working to make ultra-fresh, nutrient-rich food accessible to everyone in an always-local way that minimizes wastage from transport,” said Masayoshi Son, Chairman & CEO of SoftBank Group Corp. “We believe that Plenty’s team will remake the current food system to improve people’s quality of life.”

Plenty claims to use 1 percent of the water and land of a conventional farm with no pesticides or synthetic fertilizers. Like other large soilless, hi-tech farms growing today, Plenty says it uses custom sensors feeding data-enabled systems resulting in finely-tuned environmental controls to produce greens with superior flavor.

The SoftBank Vision fund invests no less than $100 million checks in deals across internet-of-things, AI, robotics, infrastructure, telecoms, biotech, fintech, mobile apps and more.

Existing fund investments and recent deals include Indian fintech unicorn Paytm, virtual reality Improbable Worlds, China’s Uber killer Didi Chuxing, and global connectivity company OneWeb.

SoftBank Vision Fund’s managing director, Jeffrey Housenbold, will join the Plenty Board of Directors.

Plenty’s Series B pushes microbial crop input products company Indigo off the top position for the largest agtech deal on record; Indigo raised a $100 million Series C round last year, just months after raising a $56 million Series B.

Today’s deal is also far larger than any other in the indoor ag space; SunDrop Farms, the Australian greenhouse operator, raised $100 million from global private equity group in 2014. The closest in the vertical farming space is AeroFarms, which recently announced $34 million of a $40 million Series D round bring it’s fundraising total to more than $100 million.

Said AeroFarms CEO David Rosenberg, “This is a monster raise, and ultimately competition can be good for the industry to drive further advancement.”

Plenty raised $1.5 million in seed funding and a $24.5 million Series A round, both in 2016. The startup’s other investors are Innovation Endeavors , Bezos Expeditions , Finistere Ventures, Data Collective, Kirenaga Partners,  DCM Ventures, and Western Technology Investment.

SoftBank Invests in Largest Ever Agtech Deal, a $200m Series B For Indoor Ag Startup Plenty

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SoftBank Invests in Largest Ever Agtech Deal, a $200m Series B For Indoor Ag Startup Plenty

JULY 19, 2017 EMMA COSGROVE

**UPDATE: Added comments from S2G Ventures managing director Sanjeev Krishnan, AeroFarms CEO David Rosenberg***

**UPDATE: Added comments from Plenty CEO Matt Barnard, and AgFunder CEO Rob Leclerc**

Indoor vertical farming company Plenty has raised $200 million in a Series B round of funding, the largest agtech investment to date.

Just one month after the grower acquired indoor agriculture hardware company Bright Agrotech, this round was led by Japan’s SoftBank Vision Fund, a $93 billion, multi-stage tech fund.

Affiliates of Louis M. Bacon, the founder of Moore Capital Management, also joined the round alongside existing investors including Innovation Endeavors, Bezos Expeditions, Chinese VC DCM, Data Collective, and Finistere Ventures.

Plenty uses a vertical growing plane to grow leafy greens in a 52,000 square foot South San Francisco facility. The Series B — which takes total funding for the startup to $226 million — will fuel further expansion and more farms.

One agtech venture capitalist said that Plenty had a pre-money valuation of $500 million, but Plenty CEO Matt Barnard would not confirm this figure. The same venture capitalist said that if that figure was true, the valuation would be “crazy” for a company that appears to be pre-revenue.

But Plenty’s Barnard is confident about Plenty’s “aggressive” expansion plans to improve food quality globally. This expansion will include building farms in Japan, China, and the Middle East, as well as the US.

“This is an enormous investment, which is a testament to the strength of the founders and the strong conviction from Vision Fund in making bets that are true to its mandate,” said Rob Leclerc, CEO of AgFunder. “Plenty is a young company, so there’s going to be a lot of work for their economics to catch up to the valuation, but if they succeed, this will have looked cheap.”

Barnard offered no specific timeline or number of farms in the near-term, saying that the company prefers to announce new locations when all relevant partners are in place. Further, he did not confirm any retail partners for his South San Francisco farm. But he did say that Japan is a priority. “It is one of our top priorities not only because SoftBank is a partner, but there are some specific needs that we plan to fill,” said Barnard.

The CEO said that Plenty used its $1.5 million seed and $24.5 million Series A rounds of financing to prove to investors that the company had the capability to deliver “vegetables and fruits” as good or better than what is currently on the market.

Barnard, who was introduced to SoftBank by an existing investor, confirmed that in addition to leafy greens,  Plenty has successfully grown strawberries, but would not confirm any other crops. He told Bloomberg that cucumbers are on the way as well.

What Plenty has yet to demonstrate is the ability to operate at scale.

Said Barnard, “Operating any farm, anywhere is extremely difficult and requires a lot of diligence, processes, people, and systems. The thing that is hard about investing is that at some point someone has to invest in scale before the scale is there and SoftBank is both visionary and courageous.”

Sanjeev Krishnan of S2G Ventures said that despite the large sums raised, vertical farming is unlikely to be dominated by one name.

“This investment shows the potential of the sector. Indoor agriculture is a real toolkit for the produce industry. There is no winner takes all potential here. I could even see some traditional, outdoor growers do indoor ag as a way to manage some of the fundamental issues of the produce industry: agronomy, logistics costs, shrinkage, freshness, seasonality and manage inventory cycles better. There are many different models that could work and we are excited about the platforms being built in the market.”

In addition to Plenty’s global expansion, this round will go toward hiring in computer science, machine learning, mechanical engineering, crop science, biology among others.

“By combining technology with optimal agriculture methods, Plenty is working to make ultra-fresh, nutrient-rich food accessible to everyone in an always-local way that minimizes wastage from transport,” said Masayoshi Son, Chairman & CEO of SoftBank Group Corp. “We believe that Plenty’s team will remake the current food system to improve people’s quality of life.”

Plenty claims to use 1 percent of the water and land of a conventional farm with no pesticides or synthetic fertilizers. Like other large soilless, hi-tech farms growing today, Plenty says it uses custom sensors feeding data-enabled systems resulting in finely-tuned environmental controls to produce greens with superior flavor.

The SoftBank Vision fund invests no less than $100 million checks in deals across internet-of-things, AI, robotics, infrastructure, telecoms, biotech, fintech, mobile apps and more.

Existing fund investments and recent deals include Indian fintech unicorn Paytm, virtual reality Improbable Worlds, China’s Uber killer Didi Chuxing, and global connectivity company OneWeb.

SoftBank Vision Fund’s managing director, Jeffrey Housenbold, will join the Plenty Board of Directors.

Plenty’s Series B pushes microbial crop input products company Indigo off the top position for the largest agtech deal on record;Indigo raised a $100 million Series C round last year, just months after raising a $56 million Series B.

Today’s deal is also far larger than any other in the indoor ag space; SunDrop Farms, the Australian greenhouse operator, raised $100 million from global private equity group in 2014. The closest in the vertical farming space is AeroFarms, which recently announced $34 million of a $40 million Series D round bring it’s fundraising total to more than $100 million.

Said AeroFarms CEO David Rosenberg, “This is a monster raise, and ultimately competition can be good for the industry to drive further advancement.”

Plenty raised $1.5 million in seed funding and a $24.5 million Series A round, both in 2016. The startup’s other investors are Innovation Endeavors , Bezos Expeditions , Finistere Ventures, Data Collective, Kirenaga Partners,  DCM Ventures, and Western Technology Investment.

*Additional reporting by Louisa Burwood-Taylor*

Vertical Funding

Vertical Funding

Image: Bright Agrotech

US-based Newbean Capital has launched an alternative finance arm, Contain, with a focus on providing funding for vertical farmers. The new unit will deliver lease financing for those practising vertical farming and indoor agriculture using hydroponic aquaponic and aeroponic techniques.

Contain recently arranged a five-year lease agreement for Bright Agrotech’s ZipFarm equipment for MyChoice Programs, an East Coast non-profit supporting individuals with developmental disabilities. MyChoice Programs is transforming one of its buildings into a vertical farm that could feed both the residents of its homes and the local  community.

Bright Agrotech has just been acquired by vertical farming company Plenty as part of the latter’s efforts to build field-scale indoor farms around the world. Plenty farms combine machine learning, IoT, Big Data, sophisticated environmental controls and heirloom seed stock, and the company reckons it can grow fruits and vegetables, using 1% of the water, less than 1% of the land, and none of the pesticides, synthetic fertilisers or GMOs of conventional agriculture.

Newbean Capital Launches Finance Arm To Support Indoor AG

Contain Inc Partners With AmHydro, Bright Agrotech & CropKing:

Newbean Capital Launches Finance Arm To Support Indoor AG

Newbean Capital, a registered investment advisor and organizer behind the Indoor Ag-Con events, has launched an alternate finance arm, Contain Inc.. “Our goal is to become the alternate finance provider of choice to indoor farmers”, said Nicola Kerslake, co-founder of Contain Inc.

The venture has partnered with three indoor agriculture technology providers to provide lease financing to their customers. For longstanding industry consultant AmHydro, it will offer lease financing for the company’s Get Growing! greenhouse bundle packages. AmHydro has been designing and building innovative, hydroponic systems for over 30 years. It manufactures and helps to install food-grade growing systems for both small and large commercial operations. AmHydro offers systems for the small business entrepreneur up to the large multi-acre commercial suppliers of companies such as Whole Foods and Costco.

Contain Inc has recently arranged a five-year lease agreement for Bright Agrotech’s ZipFarm equipment at a 6.5% rate for MyChoice Programs, an East coast nonprofit that supports individuals with developmental disabilities to participate in their communities. As one of its innovative programs, it decided to transform a building into a vertical farm that could feed both the residents of its homes and the local community using Bright Agrotech equipment.

Its newest partner - CropKing - a manufacturer and distributor of commercial greenhouse structures, hydroponic growing equipment, and supplies. Known for working with family farms, it has specialized in the business of controlled environment agriculture and hydroponic growing since 1982. It offers both bucket and NFT systems for indoor grows.

See also : 
contain.ag
amhydro.com/financing
brightagrotech.com
cropking.com
mychoiceprograms.com

Publication date: 6/20/2017