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How To Rank Agtech's Top 50, According to SVG-THRIVE
Several “next-gen” farming operations made the Top 50, including the New Jersey-based vertical farm operation Aerofarms and Bright Farms, an indoor farming company based out of New York.
How To Rank Agtech's Top 50, According to SVG-THRIVE
Jenny Splitter Contributor
Food & Drink I cover the intersections of technology, farming and food.
Farmers work at the Bowery Farming Inc. indoor farm in Kearny, New Jersey, U.S., on Tuesday, Aug. 7, 2018. Photographer: David Williams/Bloomberg© 2018 BLOOMBERG FINANCE LP
The agtech landscape is littered with disruptors, but when “everyone is either disrupting or being disrupted,” as Jill Lepore wrote in a 2014 New Yorker piece entitled “The Disruption Machine,” how can you tell the difference between hype and a company that could bring about real change? “It’s a good question,” says John Hartnett, CEO of agtech investment firm SVG Partners, and it’s one he’s prepared to answer. As part of its THRIVE AgTech platform, SVG has just released its Top 50 Report ranking the best growth stage companies in the industry.
“If I look at the last five years,” says Hartnett, “investment in this whole category has increased 500% plus.” Across all of that investment, Hartnett acknowledges “there’s been quite a bit of hype across the digital side,” but he believes the top 50 have earned their ranking for a reason.
Hartnett offers Farmers Business Network as an example. The online network is kind of a central information hub for farmers, where they can analyze data collected from farm machines and find up-to-date pricing for things like seed and fertilizer. “Farmers Business Network [came] in...out of nowhere and [now] they’re disrupting the biggest companies,” he argues. “I kind of look at that as a real live example of a company making big traction.”
Infographic representing SVG-THRIVE Top 50 Ranking SVG-THRIVE
Robotics companies also made the list, says Hartnett, because the technology could help solve problems like labor shortages or demand for herbicide alternatives. And the technology is being put to the test in the field, which is an important data point for Hartnett. “Somebody like Driscoll’s berries, largest berry company in the world,” he says, is now beginning to use robot fruit pickers combined with artificial intelligence to ensure the berries are being picked when they’re actually ripe.
“There’s [also] a company that came to our accelerator called Farmwise,” says Hartnett, “[who uses] AI in conjunction with robotics automation solutions to be able to identify what’s a weed and what’s a plant to be able to target and get rid of the weed.” Farmwise made THRIVE’s “Ones To Watch” list, a list of contenders that fell just shy of making the Top 50.
Several “next-gen” farming operations made the Top 50, including the New Jersey-based vertical farm operation Aerofarms and Bright Farms, an indoor farming company based out of New York. Though vertical farms were initially met with skepticism by the industry, Hartnett says these days the technology looks far more scalable. “Vertical farming is still a small percentage of the overall pie of farming, but...there’s significant investment going into these companies,” which helped these startups become serious contenders.
Biotech—long a leading category in the overall agtech field—grew even more exponentially over the last year. The category captured 62% of the funding pool, a feat Hartnett suspects was helped along by an activity-driving boost from last year’s mega-mergers between agriculture giants like Bayer and Monsanto as well as DuPont and Corteva. Biotech companies like Indigo Ag and Gingko Bioworks made the Top 50 Report, due in part to this funding boom.
MicroGen Biotech, an Irish biotech company founded by a Chinese scientist with funding from both Chinese and Irish investors, is another company that made the “Ones To Watch” list. Hartnett, who is originally from Ireland, was intrigued by the company when he first came across it a few years ago. “They’re taking an interesting approach to reducing [impact from] metals in the soil [by] using their technology to protect the seed” rather than treat the soil directly.
Brad Goehring, owner and operator of Goehring Vineyards Inc., stands for a photograph at one of his vineyards in Lodi, California, U.S., on Thursday, Dec. 29, 2016.Photographer: David Paul Morris/Bloomberg© 2017 BLOOMBERG FINANCE LP
“This year’s awardees are developing incredible solutions that enable the agriculture and food industries to respond...to urgent environmental challenges, labor shortages, food security and human health concerns” says Hartnett of the rankings. “Top 50 companies are critical assets to the industry and we are proud to highlight the incredible spectrum of innovation.”
Jenny Splitter Contributor
I’m a food, science and health writer whose work has appeared in The Washington Post, New York Magazine, Slate, Mental Floss, SELF and the Breakthrough Journal. Since 2015, I’ve been fascinated by the intersection of technology and food, from cutting edge cattle feedlots to new formats like cellular agriculture and lab meat. I especially enjoy writing about genetically engineered crops, food and agriculture policy, and sustainability in agricultural and food technologies. I grew up in Northern California, not too far from the farms of the Salinas Valley “Salad Bowl,” and now live in Washington, D.C. with my husband and two kids. You can find me on Twitter at @jennysplitter.
Can Vertical Farms Be Profitable?
Can Vertical Farms Be Profitable?
By David Kuack, UrbanAgNews.com
March 13, 2019
Although vertical farms producing leafy greens are receiving most of the press coverage, there are a variety of other crops being being grown and innovative growers are finding these crops to be profitable.
When you think about a vertical farm what picture comes to mind? Ricardo Hernandez, horticulture professor at North Carolina State University, said most people think of vertical farms as indoor growing operations that produce leafy greens, primarily lettuce.
“There are both small and large leafy greens vertical farms,” Hernandez said. “Some of them are going out of business and some new ones are opening up. All of them have similar challenges.
“The main challenge is that even though they can produce a lot of leafy greens because they are able to stack the plants, there is a bottleneck in terms of how fast they can produce the crops. The bottleneck is tied to the plant genetics. With the current plant genetics and cultivars that most vertical farm entrepreneurs are using, it is very hard to outperform the lettuce crops coming out of the field. This is especially the case if the field conditions are suitable to grow lettuce such as in California and the southern part of Arizona during the winter.”
For many of the cultivars being grown in the field, including butterhead, red leaf lettuce and baby greens, the same seed is being used in vertical farms.
“In order for the leafy greens produced in vertical farms to actually gain significant market share, the genetics have to be changed in those plants,” Hernandez said. “This can come through conventional breeding or gene editing or through targeted breeding using molecular tools. A new set of cultivars is needed, a new set of genetics that are specific for indoor farms. Right now we are using the genetics that are good for field production. These field cultivars have high plant uniformity in terms of growth under a large variability of environmental conditions. The field genetics enable plants to look the same even if there is a lot of variability in the environment.”
Ricardo Hernandez, horticulture professor at North Carolina State University, said one of the biggest challenges facing vertical farms growing leafy greens is the lack of cultivars bred specifically for these production facilities.
Photos courtesy of Ricardo Hernandez, N.C. St. Univ.
Because vertical farms provide a stable environment, Hernandez said the types of genetics that are needed are specifically for an environment that can be controlled. The genetics for field crops of maintaining high uniformity and minimizing large variability are not a concern with vertical farms.
“Unfortunately, the market for breeding companies to develop varieties specifically for vertical farms is small,” Hernandez said. “There is not an established market for vertical farm growers. There hasn’t been a significant effort by established breeding companies to start developing cultivars specifically for vertical farms. Maybe some startups will be able to develop new cultivars or university researchers may be able to give those efforts a boost.”
Cost of production
One of the major hurdles with vertical farms is cost of production.
“There is a lot of technology and utilities associated with producing leafy greens in vertical farms,” Hernandez said. “That cost of production is very high compared to the leafy greens grown on the West Coast even when the shipping costs are added on.
“There actually are some vertical farms making money. Some of those are in boutique markets. These growers are able to get more money for a head of lettuce than the competing product that comes from the field. However, it is going to be difficult for growers who are selling to boutique markets and who receive a premium price for a head of lettuce to break into the mass market. Most consumers are not willing to pay the higher boutique prices.”
Hernandez said in order for vertical farms to acquire a significant share of the market, they are going to have to bring down the price of lettuce so more people will be willing to pay for the product.
Making money with transplants
One area of vertical farm production that Hernandez said growers can be profitable is producing transplants or starter plants.
“I’m convinced based on economic studies that we have done in my lab, using vertical farms or indoor growing is economically viable for growing transplants or starter plants,” he said. “Growing transplants is a very economical way to successfully adopt vertical farm production. These starter plants are a high value product and they can be grown under very high density in vertical farms, even higher than they can be grown in a greenhouse. These transplants are inserted into the current supply chain and will be sold to greenhouse and field growers who will produce the end products.”
Hernandez has started a transplant vertical farm, Grafted Growers, with his business partner John Jackson. Hernandez said growers looking to produce transplants in vertical farms should choose crops considered to have the highest value.
“These would be transplants that benefit the most from being grown indoors,” he said. “The clean controlled environment of a vertical farm can ensure a very high germination rate and a lot of plants can be produced in a small area. The controlled environment of vertical farms also provides a desirable outcome including finished plants that flower sooner or plants that have more dry mass.”
The controlled environment of a vertical farm used to produce transplants can ensure a high germination rate and can produce a lot of transplants in a small area.
Hernandez said the uniformity and quality of transplants grown in a greenhouse may not always match transplants grown in vertical farms.
“If there is good solar radiation levels, greenhouse growers can produce very good transplants,” he said. “If growers are trying to produce those transplants in greenhouses during the fall or winter, they may have to supplement the natural light levels or the quality of the transplants may not be as good. There may be a difference in quality and uniformity between seasons.
“Growing transplants in a vertical farm the quality of the transplants is consistent no matter what the outdoor conditions are. Comparing transplants grown in a vertical farm with transplants grown in a greenhouse during the winter, which is when many transplants are grown, the vertical farm transplants usually have a higher dry mass and are more uniform.”
Hernandez said a grower producing transplants during the winter may be able to match the quality of vertical farm transplants if a lot of supplemental light is used.
“It’s not only the amount of light that is important, but also the quality of light,” he said. “Even though transplants grown in a greenhouse may be receiving enough light with the use of supplemental light, depending on the light spectrum the transplants could end up stretching because they are planted at a high density.
“In a vertical farm the transplants can be kept from stretching by controlling the light spectrum so that they can be grown compact in a very high density. By taking the sun out of the equation and controlling the plant growth with artificial light eliminates the potential for stretching.”
Having the right vertical farm setup
Hernandez is quick to caution growers considering starting a vertical farm that different crops require different production setups.
Different crops require different vertical farm setups. The production setup that is optimum for for transplants may not work for leafy greens.
“Growers can create a lot of microclimates and have poor uniformity when they have the wrong vertical farm setup,” he said. “The vertical farm that works for leafy greens may not work for transplants because the requirements for transplants uniformity are different from those for leafy greens. If growers don’t have the right vertical farm to grow transplants, it’s not going to be easy and it could become a bigger problem.
“Growers need to listen to the plants and know what the plants need. Growers can incorporate a lot of technology, including robotics and sensor control, but if they are not listening to what the plants need, the technology will only deliver marginal improvements. The most important thing in a vertical farm is the plants. Everything else is just details.”
For more: Ricardo Hernandez, North Carolina State University, Department of Horticultural Science, Raleigh, NC 27695-7609; rhernan4@ncsu.edu; https://hortenergy.cals.ncsu.edu.
This article is property of Urban Ag News and was written by David Kuack, a freelance technical writer from Fort Worth, TX.
Vertical Farms Attracting Greater Interest and Investments in the GCC
According to Orbis Research, the MEA vertical farming market is expected to reach USD 1.21billion by 2021 at a CAGR of 26.4% from only USD 0.38 billion in 2016
By AG Reporter
March 7, 2019
With MEA vertical farming market expected to hit US$1.21 billion by 2021, vertical farming is attracting considerable interest and investments in the GCC
Growing importance is being given to vertical farming, among other Controlled Environment Agriculture (CEA) methods across the GCC and is generating interest and increased investments from regional and overseas players. According to Orbis Research, the MEA vertical farming market is expected to reach USD 1.21billion by 2021 at a CAGR of 26.4% from only USD 0.38 billion in 2016.
RELATED: Gulfood Reaffirms Dubai as Global Food Trade Capital
One of the GCC countries leading this change is the UAE, which has upcoming projects facilitated by the government as well as private players to help increase food security in the region. These include the UAE Ministry of Climate Change and Environment allotting space for 12 vertical farms to be built by Shalimar Biotech Industries, and the world’s largest vertical farm for Emirates Airlines by Crop One Holdings Inc. With around 90 percent of food being imported in the UAE, territorial problems of water scarcity and small percentages of arable land, vertical farming is becoming increasingly vital to ensure food security within the region.
RELATED: UAE’s Thriving Organic Farming
H.E. Mariam Al Mehiri, Minister of Future Food Security and a leading campaigner of urban farming plans to create a ‘Food Valley’ or a technology hub, dedicated to the development of food and farming automation. The Food Valley, and other government-led initiatives, are being introduced to attract and enable a new generation of farmers to help build future sustainability. Commenting in a recent interview, the Minister said “[The idea] comes from the Silicon Valley in the United States, where you have technologies, or start-ups, sprouting and developing into commercial giants.” explains the Minister. “We want to bring this to the UAE and build a Food Valley that’s all about food technologies.”
RELATED: Five Ways UAE Is The Architect of Its Own Food Security and Sustainability
The Middle East and Africa: A prime location for CEA to successfully take off.
By capitalizing on vertical space, and controlling the environment for year-round optimal growth, CEA can produce significantly more yields per square foot than traditional agriculture, while using only a fraction of the water.
AgraME 2019 is once again creating a platform for the latest technology to be showcased to the regional agribusiness market, along with promoting knowledge sharing between leaders in the global industry and key local players around urban farming techniques and methods.
Henry Gordon-Smith, Founder and Managing Director of Agritecture and an acknowledged global thought leader in urban agriculture, stated that the Middle East has an unprecedented ability to reshape critical infrastructure that supports modern human life; “The potential is certainly there to transform what has historically been a relatively small traditional farming industry into perhaps the most technologically advanced agriculture industry in the world. This means economic development, increased production of nutritious local produce, and lowered food costs, all with minimal water consumption and increased resilience to climate change and foreign markets” said Gordon-Smith who will be speaking at the AgraME Conference in March.
Commenting on the Middle East market, Bob Hunsche, Sales Manager, Van der Hoeven said; “We are really starting to see the horticulture industry take off in the Middle East. We have just completed the largest greenhouse project in the UAE (11 ha). With the most advanced technology in terms of climate and humidity control, the facility is expected to locally produce 3,000 tonnes of tomatoes year-round with the aim of helping the UAE become more self-sufficient in its food production. AgraME 2018 was a great event and we are really looking forward to connecting with more projects at the 2019 show!”
Samantha Bleasby, Exhibition Director of AgraME said, “With the aim of increasing food security in the Middle East and attaining the UN Sustainable Development Goal (SDG) of zero hunger, we are excited to present the industry with new technologies from around the globe and free-to-attend learning and networking opportunities that will increase productivity in the region with sustainable use of water and land resources”
The show is attracting key players in the CEA industry such as Certhon, Agrotonomy, Veggitech, Wuxi, iGrowths Technology Co. Ltd, Ozorganic Urban Farming LLP and Van der Hoeven.
Taking place from 5 – 7 March 2019 at the Dubai World Trade Centre, AgraME 2019 will bring to Dubai some of the leading innovators and urban farming experts to provide the industry with valuable information and knowledge.
Siberian Startup iFarms Secures $1mn To Develop “Vertical Farms” Across Russia and Europe
By EWDN in Moscow February 19, 2019
iFarm, a Novosibirsk, Siberia-based startup, has just secured $1mn in a round led by Gagarin Capital – the California-based VC firm founded by Nick Davidov and Mikhail Taver – with participation from individual Russian investors. The details of the deal have not been disclosed, reports East-West Digital News.
"We created iFarm to grow natural vegetables, berries and greens in the city at any time of the year, using innovative technologies," the company says on its website. Russia has enormous agricultural potential, but the weather makes growing fruit and vegetables difficult on most of the country's territory.
This agritech startup builds vertical farms, which “use a footprint of land more productively than traditional greenhouses.” It has also designed automated all-year-round greenhouses from 100 to 1000 sq.m. as well as growing trays “for growing greens and strawberry right in your restaurant or grocery.” iFarm’s first experimental projects were completed in 2017. The next year, iFarm developed vertical farms to grow such short-term crops as strawberries, lettuce and herbs. Two such vertical farms of 500 sq. m. were developed with grocery stores.
This year, iFarm plans to launch a new 3,000 sq. m. project in Novosibirsk, a smaller one in Moscow (100-500 sq.m.), and to experiment its technology on the European market. It will also use the money raised in the recent round to develop further its technology and enlarge its team.
The company has offices or representatives in Novosibirsk, Moscow and Luxembourg.
Affinor Growers (AFI) Trading Down 12.5%
Affinor Growers Inc (CNSX:AFI) dropped 12.5% during mid-day trading on Thursday . The company traded as low as C$0.04 and last traded at C$0.04
Posted by Emily Schoerning on March 21st, 2019
Affinor Growers Inc (CNSX:AFI) dropped 12.5% during mid-day trading on Thursday . The company traded as low as C$0.04 and last traded at C$0.04. Approximately 229,250 shares were traded during trading, a decline of 22% from the average daily volume of 292,753 shares. The stock had previously closed at C$0.04.
About Affinor Growers (CNSX:AFI)
Affinor Growers Inc, a farming technology company, engages in acquiring, patenting, and commercializing various agriculture technologies and vertical farming technology for indoor controlled environment and outdoor greenhouse agriculture industry in North America. It grows crops, such as romaine lettuce, spinach, and strawberries using its vertical farming technology.
Do The Costs For Vertical Farming Stack Up?
The technology is available to grow a wide range of crops under controlled conditions, but this requires high levels of technical skill and investment
Friday, 15 February 2019
Controlled Environment Agriculture is seen by many as the answer to reducing environmental impact, helping to feed a growing population and producing premium crops. AHDB-funded Nuffield Scholar, Sarah Hughes, argues the economics for vertical farming don’t always stack up.
With increasing land prices, a shrinking and ageing rural workforce, increased climate variability and Brexit on the horizon, I wanted to find out if compact and highly productive growing systems stack up economically as a viable way to grow a crop.
There is an exciting future for controlled environment agriculture (CEA) and vertical farming, but it may only be for high-value crops, such as those grown for medicinal use.
After travelling to Brazil, Japan, The Netherlands, California, Dubai, in my opinion a hybrid system might be the best way to make the economics work. This would mean using glasshouse technology and adding knowledge gained from Controlled Environment Agriculture to improve production.
Getting the business model right
The technology is available to grow a wide range of crops under controlled conditions, but this requires high levels of technical skill and investment.
If you haven’t got a high value crop, you may struggle to make the books balance. People need to look at the crop and the business model first, and then decide the best way to grow it.
The ideal would be to model all the variable costs of each different CEA system, to assess whether it is economical.
To identify the ‘sweet spot’ for when vertical farming adds up, the following changes may need to happen:
Reduced LED lighting costs
Reduced electricity costs
Increased costs of conventional production methods
There are business models where CEA currently work well, such as seed breeding and medicinal plants; however other models, such as niche crops, fodder and leafy greens, appear less economical unless on a large scale in the later example.
Environmental sustainability
It is difficult to substantiate the claims for environmental sustainability based on energy used in these systems, even with renewable energy. However the arguments are more convincing when applied to water use.
Vertical Farms do minimise land-use, growing in stacks can obviously be done on a much smaller footprint. However the argument for growing in urban environment really needs looking at in detail. If you buy space in middle of London, the real estate cost is phenomenal, that argument doesn’t really work.
Hybrid systems
Wageningen University and Research in The Netherlands, who I visited as part of AHDB’s SmartHort campaign, have been looking at the nitty gritty of growing in these systems. They argued the energy requirement is currently too high to make it work, compared to a conventional glass-house system.
A Smart-glasshouse or a hybrid system might be way forward. This would involve using conventional glasshouses, but adopting vertical farming technologies when needed. For instance, we have good light levels in the UK, but when light is poor, it could be supplemented with LEDs, but this isn’t necessary every day of the year.
Sarah Hughes runs the company ‘Eat My Flowers,’ an edible flowers business based in North Wales and undertook her research into Controlled Environment Agriculture as an AHDB-funded Nuffield scholar. You can read Sarah’s Nuffield Scholarship Report here.
Twitter Former CFO Joins SoftBank-Backed Farming Startup Plenty
Twitter Inc.’s former chief financial officer has joined Plenty Inc. in that role as the indoor farming startup prepares for international expansion and improvements to its vertical growing technology.
By Selina Wang
March 15, 2019
Mike Gupta will help company as it expands internationally
An IPO pro, Gupta led market debuts for Twitter and Zynga
Mike Gupta Photographer: Jim Graham/Bloomberg
Twitter Inc.’s former chief financial officer has joined Plenty Inc. in that role as the indoor farming startup prepares for international expansion and improvements to its vertical growing technology.
Mike Gupta helped take Twitter public in 2013 and left for Docker Inc. two years later. Earlier, Gupta was treasurer at gaming company Zynga Inc., helping to lead its initial public offering, and had previously spent about eight years in various roles at Yahoo.
“It’s not new for me to be in hypergrowth companies that are entering unchartered territory," Gupta said in an interview. "This is a very capital intensive business so having someone who can think about how we raise and deploy capital in the long run will be very important.”
SoftBank Group Corp.-backed Plenty has made several high profile hires in recent years, including Tesla Inc.’s former battery directory Kurt Kelty and the electric carmaker’s former vice president of engineering, Nick Kalayjian.
Founded in 2014, Plenty boasts it can yield more produce in a given area than conventional farms, with only a fraction of the water. Its backers include funds that invest on behalf of Eric Schmidt, a director of Alphabet Inc., and Jeff Bezos, chief executive officer of Amazon.com Inc. Plenty is betting that with its technology and a previous $200 million investment from SoftBank, it will be able to scale its farms around the world.
The startup is in the process of building a new version of its farms, called Tigris. Matt Barnard, a co-founder and chief executive officer of Plenty, said that the new farm will be able to produce more than 40 times the amount of leafy greens that its current farms can grow, while using less energy. Plenty aims to roll out Tigris later this year.
The company currently has 200,000 square feet of indoor space in south San Francisco, but is only using a small portion for produce it sells. The majority of the space is used for testing and research and development. Plenty, which has been delivering produce in the Bay Area since June 1, sells its its food online and in neighborhood grocery stores.
Vertical farming technologies have yet to revolutionize agriculture and several companies have shut down in recent years because they weren’t economically sustainable. While most vertical farms grow produce on parallel shelves, Plenty uses tall columns from which plants sprout horizontally. The company says the method allows it to more cheaply remove excess heat emitted by LED grow lights and reduce energy needed to deliver nutrients to the plants.
Plenty has a team working on early stage development in China, and is in discussions with distributors and partners in Japan, Abu Dhabi and other regions.
Swedish Vertical Farming Company Plantagon International Bankrupt
Another major vertical farming bankruptcy. This week, Plantagon International has been declared bankrupt. Cash flow problems turned out to be insurmountable for the Swedish company.
Agritechture
Plantagon International is headquartered in Stockholm and describes themselves as an Agritechture company. "Plantagon moves food and food production into the city by implementing technical solutions into existing city infrastructure", they explains on their website. "In practical terms, that means using existing assets and real estate with lower need for capital investments."
The company made it into the news regularly with their city and indoor farming concepts and plans - like the 'plantscraper' and office blocks containing 60-metre high urban farms. Last year, the first Plantagon farm was opened, partly owned by Plantagon International.
Cashflow
This week, Plantagon International was declared bankrupt. According to Henrik Borjesson with Fylgia, the company handling the bankruptcy, the issue - it might not be a surprise since the company is declared bankrupt - is money and the (lack of) cashflow. "Currently it is too early to make more comments on the case. Our focus is to get a clear view on the situation and to sell the products we have in the bankruptcy. There's no hard value assets involved - it's mainly patents and trademarks. The company has a clear idea and view, but hasn't been able to get it into business. Now, we're looking for someone who wants to pick up the ideas, patents and trademarks, and goes on with it."
Back in 2017 Plantagon announced its 40th approved patent - with 28 more to be pending. The patents filed within four patent families, all related to growing plants indoors.
Left: the building in which the Plantagon CityFarm Stockholm is located. Above right production in the Plantagon CityFarm Stockholm. Right below: one of the Plantagon concepts.
Stockholm farm
As said, last year the Plantagon City Farm in Stockholm started production. The company is an example of modern indoor farming, located under office tower DN Skrapan and equipped with over 244 vertical positioned, 2500 mm long LED-fixtures and re-using the heat harvested from the lamps in the building.
Plantagon International is a shareholder of the Stockholm farm. Money for this enterprise was also collected through a crowdfunding: last year over 420.000 euro was invested by 477 investors, both private as corporate, and according to the Fundedbyme-page, this resulted in 4.21% of the company's shares.
During the crowdfunding, the company declared plans to open 10 large-scale farms. "With Plantagon CityFarm, you can now buy local and sustainable vegetables. The first facility in Stockholm is fully-financed and begins its production under 2018's 1st quarter. Our target is to build 10 CityFarms in Stockholm by 2020", the crowdfunding website read.
Farm
Whereas the farm itself is unavailable for comments today, insiders report the company has had trouble selling the produce for the needed price. Within two months after production started, the CEO left the company.
The future of the Stockholm farm is currently unclear, as well as the situation of the international offices. On their website, Plantagon reports on Shanghai, Mumbai & Singapore offices.
Publication date : 2/22/2019
Author: Arlette Sijmonsma
© HortiDaily.com
Agri-Tech Business Wins Vodafone Funding
15 Feb 2019
Josh Morris Digital Staff Writer
A Bristol-based agricultural technology company has been awarded £45,000 in funding from Vodafone.
LettUs Grow, which is developing aeroponic and vertical farming techniques was awarded £35,000 by the telecommunications giant as part of its Techstarter awards, as well as a further £10,000 Techstarter Champion’s award.
Jack Farmer, co-founder and operational lead at LettUs Grow, said: "We are seriously excited to be working with Vodafone. As much as the funding is incredibly useful, we are particularly keen to collaborate with them from a technical and a commercial standpoint. That mentorship is really going to help us to develop our business.
"We are looking to work with Vodafone and a number of other key partners this year, to implement our hardware and software and deliver profitable pilot farms – both greenhouse and vertical – before then working with these partners to scale nationally and internationally.
"We are very excited technically to work with Vodafone on both our communications platform and also the application of data analysis in large scale farms."
Nick Jeffery, chief executive, Vodafone UK, said: "The range and calibre of the Vodafone Techstarter winners show that the UK is home to a thriving social tech sector.
"We believe some of the biggest challenges in society can be addressed using technology and innovation. These awards are just one way we can recognise, celebrate and support start-ups developing and using technology as a force for good."
What Plantagon’s Bankruptcy Could Tell Us About the Future of Large-Scale Vertical Farming
Via a mix of agriculture, technology, and architecture, the company planned to build farms in office towers, underground parking garages, and on the facades of existing buildings
March 1, 2019
Following last week’s declaration of bankruptcy, Swedish urban agriculture company Plantagon has spoken publicly about what went wrong. In an interview with Swedish website AGFO, Plantagon’s vice president, Owe Pettersson, cited cash flow problems and indicated it had been difficult to attract enough capital to remain financially sustainable.
Its ambition alone made Stockholm-based Plantagon a company to watch in vertical farming, a space predicted to be worth $9.9 billion worldwide by 2025. Plantagon’s aim was to move food production into high-density cities on a large scale by integrating farms into existing city infrastructure. Via a mix of agriculture, technology, and architecture, the company planned to build farms in office towers, underground parking garages, and on the facades of existing buildings.
This rendering of its World Food Building “plantscraper” shows the sheer scale on which Plantagon was thinking:
As of this writing, the company had one facility already open for production, under the famous DN Skrapen tower in Stockholm. Plantagon also intended to roll out 10 more farming locations in the city by 2020, and has 55 approved international patents.
“This will be one of the most advanced food factories located in a city that we have today,” Pettersson said in an interview last year.
Business in real life, however, rarely happens as neatly as a well-executed rendering. Plantagon had raised $4.5 million SEK (a little less than $500,000 USD), but the company was, according to insiders, having trouble selling the produce it grew. Within two months of production starting on the DN Skrapen farm, the CEO left the company. “The company has a clear idea and view, but hasn’t been able to get it into business,” said Henrik Borjesson of Fylgia, the company handling the bankruptcy.
Pettersson said (translated from Swedish) in this most recent interview that outside financial issues, a project of this scale might be a little ahead of its time.
Vertical farming itself is a hot topic, if you go by what the headlines say. Companies large and small are bringing new visions for this indoor farming concept to market. In Europe, Agricool is growing fruit and just raised another round of funding. And German retailer METRO is experimenting with in-store farms via its Farmlab.One initiative.
In the U.S., Crop One Holdings raised $40 million last year to build “the world’s largest vertical farm. Boston, MA-based Freight Farms is architecting proprietary all-in-one farms in shipping containers. AeroFarms has a 70,000-square-foot facility backed by IKEA and Momofuku’s David Chang.
But as Princeton’s Paul P.G. Gauthier, who leads the Princeton Vertical Farming Project, suggested last year, there are dozens of failures out there that get far less attention than the mega success stories. We need to hear about those failures, to see the data behind them, in order to understand what went wrong and avoid making similar mistakes in future — whether those mistakes are in the operating of the farm or, as may be the case with Plantagon, in trying to scale too high too soon instead of starting with something smaller, like a shipping container. Only when we know the facts behind these stories does vertical farming have a chance on a scale as large as the one Plantagon envisioned.
Plantagon may indeed have been ahead of its time in terms of the size of its project, and the speed at which it wanted to get there. The gap between promising innovation and actually delivering on it is something that trips the tech industry up again and again. Plantagon’s past interviews have shown the company had plenty of optimism and vision for the future. What got mentioned less were the complications the vertical farm industry is still grappling with as it tries to scale — business models, energy consumption, the cost of not just building but running a facility that relies on software and machine-generated light to function.
The existing Stockholm farm’s future is currently unclear. Plantagon is currently looking for new owners. Where the company’s massive existing project stands in six months’ time will give us a good indication of whether moving large-scale farms into existing city spaces is a reality we should plan for, or if it’s time to pick up a new playbook and find a different way to spread the benefits of vertical farming.
Russia-Based iFarm Secures $1 million To Take Its Urban Farming Solutions To The Next Level
By Natalie Novick, February 12th, 2019.
Moscow-based iFarm Project has raised a $1 million round led by Gagarin Capital in support of their urban farming technologies. The iFarm Project’s fully automated vertical farms and year-round greenhouses enable fresh produce to be grown directly in the city, close to consumers.
iFarm distinguishes itself from other offerings on the market for both their hardware and software that facilitates the cultivation of different crops in entirely closed ecosystems. Rather than integrating existing products, iFarm has developed their own multi-layered horizontal shelf system alongside a digital database of parameters to enable a fully automated microclimate.
These “growing recipes” can be downloaded from the company’s central database, enabling anyone to grow crops without a comprehensive knowledge of agriculture. The iFarm system currently offers cultivation solutions for many different types of produce, among them basil, arugula, spinach, cilantro and strawberries. Alongside their current offerings, the company has plans to apply its technology to the floriculture industry in the near future.
iFarm’s vertical farming system can be scaled to build modular farms of nearly any size. A cloud-based management system optimizes conditions for each farm, letting crops grow successfully in any type of available space, including basements, building roofs or spare rooms.
In addition, their internal closed contour technology has been primarily designed to ensure a sterile growing environment. In fact, the company claims no pesticides are necessary inside their farm modules, and vegetables grown inside their farms do not need to be washed before consumption.
“The investments from this round will be used to develop technology and expand our team, including our engineering, construction and agro projects teams, as well as to pilot the technology on the European market,” explained Alexander Lyskovsky, iFarm founder and CEO. Lyskovsky is one of Russia’s most well-known serial entrepreneurs. He previously co-founded Alawar, one of the country’s largest game development companies, and Welltory, an app used worldwide that allows users to monitor stress levels.
The iFarm Project was established in 2017. Today, iFarm has a team of over 30 people and has built five vertical farms and urban greenhouses in Moscow and Novosibirsk. In 2019, the company plans to open an EU showroom and enter the international market.
“Access To Equity Capital is a Competitive Advantage”
Equilibrium Capital on Revol Greens & Houwelings investments
There’s a new kid on the block investing in the greenhouse industry. Early this year, Revol Greens announced a facility equity partnership with Equilibrium Capital - and just two weeks later Houweling’s Group was connected to the same investment company. Then there's a third investment, in a yet to-be-named hydroponic berry producer. Time for a chat with David Chen, CEO with the firm. “We definitely look for more opportunities to expand in the greenhouse industry.”
'Strategic advantage'
"Something that's hard to understand for a lot of farmers is that when an industry starts to accelerate, the access to several forms of capital, especially equity capital, becomes a strategic advantage. Most growers and operators have been used to access to bank debt, and have interpreted that as all they needed. What we see is that the growth has accelerated in the US, following a growing market demand. The expansion is no longer five hectares, ten hectares, the expansion is now twenty, thirty hectares, maybe fifty hectares. In this accelerating industry, growers are discovering that access to all forms of equity capital is a competitive advantage,” David Chen with Equilibrium Capital explains when asked about the growing role of investors and foreign capital in horticulture.
"I think the first wave were a number of large tomato operators that took on some outside investors”, he continues. “But I think the real start of this was when the leader in the greenhouse tomato market started to expand and accelerate the amount of acreage that they partnered with and owned in their corporation. And then when they took on some private equity, I think that that signalled the next chapter of this industry.”
In January Revol Greens, a Minnesota greenhouse farm, announced a facility equity partnership with Equilibrium Capital to drive expansion in 2019.
Landlord
And now Equilibrium Capital has taken its first steps in this business as well. The company has an extensive portfolio in wastewater, energy facilities and permanent crops, and has recently expanded into the horticultural industry. “Investing in agricultural infrastructure”, he calls their strategy, explaining that the company has no ambition to be involved in the day-to-day running of the companies they invest in. Rather than participating in the company, they extend the greenhouse operator’s balance sheet.
To make it concrete: Equilibrium is not investing in greenhouse operating companies, but is buying greenhouses and building out future greenhouses. By now, they've invested over $100 million in three large-scale greenhouse operations in California, Utah, and Minnesota and they plan to commit $2 billion to indoor food production over the next five years.
“Our objective is to acquire or build a set of greenhouses and hold onto them for a long period of time. To growers, we operate like a landlord. We give the grower, the operator of the farm, more options to accelerate and manage their growth.”
For example, in the Revol Greens investment, the company bought the existing greenhouse, making it possible for Revol to lease these premises and free up capital and begin plans for expansion. “We do not own any part of Revol. We own the greenhouse and financed the expansion of the greenhouse itself”, he says, comparing it to when companies like FedEx or DHL expand. “They don’t own their distribution center real estate. They own the business and operate the business inside the real estate. Airlines don’t own their terminals, Microsoft don’t own their data centers buildings.
The main advantage of the Equilibrium business model, David explains, is that a grower remains independent: “We just get him some fuel in the tank – and upgrade his motor at the same time!”
To Equilibrium themselves, it provides a safe solution. “In agriculture, putting too much debt is always dangerous. That's why our strategy has been to stay an equity investor, and to hold to very tight debt equity ratios, where the investment is still dominated by the equity."
Portfolio expansion
Having gotten a taste of the market with their recent acquisitions, Equilibrium is looking to expand their portfolio in the horticultural industry, in both existing greenhouses and expansion. Looking at the industry in general, David sees tremendous growth ahead in the next decade. "I can't emphasize enough what a driver climate is in the development of horticulture in non-Mediterranean growing climates. Even the regions that normally have stable weather have to get used to less table weather. Then there's the desire for regionality and for greater variation in the food that we eat. All together this is pushing and propelling indoor agriculture forward. Over the next decade, we're going to see acquisitions, mergers. You're going to see food companies outside of horticulture begin to invest in this area", he speaks. “We not only want to participate in that movement, but to be a leader and pioneer in the financing of that growth. We're believers that a horizontal high-tech greenhouse is going to become a mainstay of vegetable and fruit growing in this next decade, also outside of northern Europe.”
Like many participants in the industry, David emphasizes the importance of knowledge of farming. “Because greenhouses are hot right now, everybody reads about it and says, 'oh, I can do that'. The only caution that we have is: if you don't have experience, then at least have humility! The common belief seems to be there’s three pipes at one end of the greenhouse – putting in seed, water and fertilizers, and a fourth one on the other side, where the tomatoes come out. Well, we know there’s a lot more going on. That’s why we’re looking for the best, most experienced operators in the category, and like to be partners with them for their growth.”
In this outlook, he’s not afraid to cross the US borders. “If some of the Dutch growers were interested in expansion outside of Northern Europe, we would be a great partner for them to expand into Asia, North America, or even South America. Let’s put it like this: if experienced growers bring their knowledge to the table, Equilibrium provides the necessary capital.”
For more information:
Equilibrium
971-352-8430
info@eq-cap.com
eq-cap.com
Publication date : 2/18/2019
Author: Arlette Sijmonsma
© FreshPlaza.com
CubicFarm® Systems Corp. Provides Update On Corporate Operations
NEWS PROVIDED BY CubicFarm Systems Corp.
February 7, 2019,
CubicFarms has received a $10.0m equity investment, purchase order, and deposit from a strategic investor, increased the deposit at one of its locations, and announces the addition of 12 machines to its total operating network.
VANCOUVER, Feb. 7, 2019 /CNW/ - CubicFarm® Systems Corp. ("CubicFarms") is pleased to announce the following updates regarding the business.
12 Machines Brought Online in Edmonton, Alberta
CubicFarms is glad to announce that the installation of 12 machines at Swiss Leaf Farms in Edmonton, Alberta has begun operation and is currently selling produce. CubicFarms has a 50% equity interest in this operation. This addition results in 23 total CubicFarms machines in operation.
Received $10.0m Investment, Purchase Order, and Deposit from a Strategic Investor
CubicFarms is excited to announce that it has received a $10.0m investment from a strategy venture. As a component of the investment agreement, CubicFarms and the strategic investor will pursue a joint venture to take the CubicFarms Systems technology to China. The strategic investor has also submitted an order for seven CubicFarms machines, one irrigation system, and one 1/8th scale demonstration machine, and has made a deposit in addition to their $10.0m investment.
Increase in Deposit for Richmond, British Columbia CubicFarms System
CubicFarms is pleased to announce that our third-party partner in Richmond, British Columbia has increased their deposit, resulting in an increase in the certainty of shipment. This will be the fifth CubicFarms facility in Canada, adding 12 machines to the operating network once in production. It is expected to be installed in the second calendar quarter.
"The investment of $10.0m from our strategic investor has further energized all of us at CubicFarms and we are excited and eager for the future," said Dave Dinesen, Chief Executive Officer of CubicFarms. "This additional capital combined with a strong pipeline of deposits for system installations shows that the future is bright for our technology to bring fresh, local, sustainably grown product to market and for CubicFarms to continue to be a leader in the controlled environment agriculture space."
The previously announced reverse-take over of Bevo Agro Inc. ("Bevo") by Sun Pharm Investments Ltd. and the distribution of shares of CubicFarms to Bevo shareholders by way of plan of arrangement successfully closed on January 8th, 2019.
About CubicFarms
CubicFarm® Systems Corp. is an Agriculture Tech and Vertical Farming technology company that utilizes revolutionary, patented technology to cultivate high-quality produce. Founded in 2015, the company's mission is to provide farmers around the world with efficient growing systems capable of producing predictable crop yields. Using its unique undulating growing system, CubicFarms® solves the two main challenges within the indoor farming industry: high electricity and labour costs. Currently, CubicFarms® cultivates living lettuce, living basil and microgreens at its own facility in Pitt Meadows, British Columbia and is partnering with other farmers to establish facilities around the world.
Related Links
SOURCE CubicFarm Systems Corp.
For further information: info@cubicfarms.com, 1-888-280-9076.
Innovative Veg Growing Firm Secures £1 Million To Build The Farms Of The Future
January 11, 2019
An innovative Bristol firm which has developed a range of aeroponic technology for indoor farms has announced it has secured £1 million in funding to build world-leading indoor growing facilities.
LettUs Grow was awarded a grant of £399,650 by the UK’s innovation agency, Innovate UK, to lead a £700,000 project – which will help increase food resilience and security in the face of climate change.
This is alongside a further €100,000 from the Green Challenge and several additional research grants.
As part of the project, LettUs Grow will work alongside ECH Engineering, industry leaders in controlled environment technology, and urban agriculture experts from Grow Bristol.
The grants came hot on the heels of the disruptive startup’s most recent investment round, where they raised £460,000 from ClearlySo, Bethnal Green Ventures, the University of Bristol Enterprise Fund II, managed by Parkwalk Advisors, and angel investors.
This funding has allowed the company to scale operations and drive forward product development to access a rapidly growing global market for efficient and sustainable farming technology.
By 2050, it’s expected that humanity will need to increase food production by 70% to feed over nine billion people. Existing methods of agriculture will not be enough to feed this burgeoning global population.
Alongside this, most ‘fresh’ produce is imported out of season, often travelling hundreds of miles to reach consumers and resulting in colossal waste throughout the supply chain.
LettUs Grow has designed a patent-pending aeroponic system that has shown growth rate increases of over 70% compared to existing solutions for leafy greens, salads and herb production.
What Is Aeroponic Growing?
Aeroponics is a way of growing plants without soil, where the roots are watered using a fine mist. Not only does this allow greater oxygenation of the roots, delivering better flavour and faster growth, but it uses up to 95% less water than traditional agriculture.
Charlie Guy, co-founder and managing director said: “This injection of private and public funding into the company enables us to accelerate our innovative products to market and build one of the most technically advanced facilities for indoor growing in the world.
The global agri-tech industry is very exciting right now, all stemming from the necessity to improve the economic and environmental sustainability of food production.
“We are fielding enquiries from all around the world from food producers and farmers who want to experience the benefits of our technology across a growing range of crops.”
Matias Wibowo, investment manager at ClearlySo: “Innovation is critical to ensuring long-term food security and sustainability.
“Our investors see the value, both in terms of financial and environmental returns from tackling this systemic global problem. That’s why they got involved in LettUs Grow.
“LettUs Grow provides the technological innovation piece to the vertical smart farming movement that is currently trending rapidly in the urban context.”
The Marijuana Billionaire Who Doesn’t Smoke Weed
With the help of Big Beer and Big Pharma, Brendan Kennedy’s Canadian cannabis company Tilray has unexpectedly become America’s gateway to the legal marijuana industry.
By Jen Wieczner
January 16, 2019
It’s just after 6, on a pitch-dark morning in December, and Brendan Kennedy is standing over the stove, wearing shorts and a vest, meditatively melting butter in a pancake pan. It will be nearly two hours before the sun cracks the Seattle sky, and Kennedy, toddler son in tow, already has the pensive look of a man trying hard to keep the creep of the workday ahead from encroaching on a family ritual.
See, morning is a sacred time for the 46-year-old CEO, who has two rules for starting the day: Always eat breakfast. Don’t eat with anybody but your kids. Though abiding by rule No. 2 means eating alone, if he’s on the road—which is a lot these days, particularly since Kennedy’s company, Tilray, went public in July. In a couple of hours he’ll board his 135th flight of the year—a stat he can tell you because his assistant, knowing how he relishes data, sends him monthly analytics on his own travel (in 2018, he flew 23% more miles than he did the year before). At the moment, though, his 4-year-old daughter, in a pink tutu, is stirring the batter skeptically from her perch atop the kitchen island. “Papa, I think you forgot the flour,” she chides. Kennedy’s family moved into the new house a few weeks after Tilray went public, and he still struggles to find things in his own kitchen. He shrugs as he begins scrambling eggs and frying bacon in another pan: “My kids say pancakes are the only thing I’m good at.”
GROWTH INDUSTRY: CEO Brendan Kennedy with marijuana 'tissue culture clones' at Tilray’s Nanaimo headquarters. Photograph by Spencer Lowell for Fortune
Of course, his children are too young to know that what their dad is really good at is—at least for the moment—illegal in much of the U.S. and the world. Tilray sells cannabis, a.k.a. pot, weed, and more than 1,000 other colorful nicknames, for the medical-marijuana market and, more recently, the recreational one. It wears the crown as the hottest IPO of 2018, returning 315% for the year and valuing the Canada-based but American-run company at $9 billion today. The kids don’t know that the IPO—his daughter got to help ring the bell at the Nasdaq—made Kennedy not only a billionaire but the richest man in the legal marijuana business, and maybe the face of its future. Or that after pancakes today, he’ll shake hands with officials at Anheuser-Busch InBev, the behemoth behind Budweiser, to form a $100 million partnership aimed at creating a cannabis-infused substitute for beer.
Tilray’s 50% contribution to that venture exceeds the estimated $45 million in revenue it made in 2018, a year in which its estimated losses hit $47 million. But AB InBev’s desire for a deal is just the latest sign of Big Business’s belief that widespread cannabis legalization is an inevitability, and that Tilray—a global operation founded by finance veterans and data geeks with minimal interest in, um, testing the product themselves—will be uniquely poised to capitalize when Big Cannabis goes mainstream.
Brendan Kennedy and his family, center, ring the Nasdaq bell at Tilray's IPO in July 2018.
Bebeto Matthews—AP/REX/Shutterstock
The day before the predawn pancakes, Kennedy and I had boarded a 10-seat Cessna prop plane at Seattle’s Boeing Field for an hour-long flight to Tilray’s official headquarters, in Nanaimo on Vancouver Island in British Columbia, the lush, rugged province renowned among cannabis connoisseurs for its “BC bud.” It was cold enough to see your breath inside the plane. Preparing for takeoff, the pilot laid out a short list of stipulations: “Stay buckled, no talking on the phone, and no cannabis products on board.” Marijuana became fully legal in Canada on Oct. 17. But flights crossing the border have nonetheless been warning passengers that the U.S. government still prohibits taking the drug with you—even when traveling from Washington State, where recreational cannabis has been legal since 2012. Then again, why push your luck? As a Canadian customs officer once put it nonchalantly to Tilray employees, “It’s just like bringing sand to the beach.”
Flying north from Seattle, the 360-degree view features Mount Rainier behind you, Mount Baker to your right, and Mount Olympus on the left. In the summer, when it’s easier to go via low-flying seaplane, you can often glimpse a pod of orcas swimming just beneath the surface of Puget Sound. On the ground in Nanaimo, Kennedy is something of a local celebrity, having quickly become one of the largest employers in a community of 92,000 people. We clear customs without a word and proceed to Tilray’s 65,000-square-foot cannabis lab and grow facility, where the whiff of freshly cut marijuana floods your nostrils as soon as you open the heavy steel door. The combination of the pharmaceutical-grade warehouse setup and the presence of thousands upon thousands of pot plants gives it the sterile but earthy smell of a Home Depot garden department—you know, if Home Depot sold weed. From here, the product will be shipped to tens of thousands of patients, as well as pharmacies and dispensaries, in 12 countries where medical or recreational pot use is legal.
But we haven’t even made it past the vestibule when a facilities employee named Rudy stops the CEO in his tracks. “I never got to say thank-you for the whole stock thing,” he tells Kennedy, shaking his head reverently. “What a gift. Such a life changer, a game changer. The thought of being a Tilionaire one day.”
RAISING CAPITAL: Light-controlled marijuana grow rooms at Tilray’s headquarters facility in Nanaimo, B.C. Photographs by Spencer Lowell for Fortune
Kennedy swears this wasn’t a scheduled part of the tour. He claims he’s never even heard the expression “Tilionaire,” although his stock—which he’s doled out to all 750 of the firm’s employees, at all levels—has made many people much richer. He has yet to sell any of his own shares (and promises he won’t do so when post-IPO restrictions lift in January), meaning his 10-figure wealth is still only on paper. Kennedy, who previously started and sold two dotcom-era software companies before getting an MBA from Yale, claims he didn’t anticipate the investor frenzy that Tilray ignited as the first cannabis producer to go public on a major U.S. exchange. “We were caught off guard,” he says.
Indeed, virtually the entire business world is grappling with the sudden arrival of cannabis as a force of disruption, even as marijuana teeters on the grayish line of legitimacy. Pot is now legal for either medical or recreational use in some 36 countries and 33 U.S. states plus the District of Columbia. And while its use and sale remain illegal in the U.S. at the federal level, many on Wall Street and beyond see that changing too. The recently passed Farm Bill exempted the hemp plant and its derivative cannabidiol, or CBD, from the federal ban, clearing the way for an anticipated surge in a product category that in some states has already swept across store shelves and café and cocktail menus. A new report from Arcview Market Research and BDS Analytics forecasts that legal pot sales will more than double from $10.5 billion in 2018 to $22.2 billion in the U.S. in 2022, and to $31.6 billion worldwide. By then, Kennedy and others expect the U.S. will have legalized the drug, an issue that could even dictate who wins the 2020 presidential election.
Chasing this buzz, U.S. industries, including Big Beer, Big Tobacco, and Big Pharma, have made bets on cannabis companies, observing that consumers are increasingly turning to the drug as an alternative to booze, cigarettes, and painkillers. That has fueled tie-ups like Tilray’s with AB InBev, as well as a global distribution deal Tilray struck with Sandoz, a division of Swiss drugmaker Novartis, for co-branded cannabis oils and pills to treat ailments such as epilepsy, sleep disorders, and post-traumatic stress—the only partnership to date between a cannabis company and a big drug company. Elsewhere, Constellation Brands, which makes Corona, and Marlboro cigarette purveyor Altria have made multibillion-dollar investments in Canadian cannabis companies.
Tilray’s facility produces cannabis oils (left), a staple of its partnership with a division of Novartis, as well as medical-grade marijuana flower for smoking, worth nearly $10,000 per bag. Photographs by Spencer Lowell for Fortune
Yet for all that interest, most money invested in marijuana is leaving America. Public and private cannabis companies raised $13.9 billion in capital in 2018, quadruple the previous year’s total, according to Viridian Capital Advisors, an investment bank that tracks cannabis deals. Of that sum, however, 69% was invested outside the U.S. As long as cannabis remains federally outlawed, American businesspeople have to reckon with the liability of, technically, aiding and abetting illicit activity, a risk many have decided is not worth taking. “It’s kind of a damn shame that so much capital has escaped the U.S. to go up to Canada,” says Scott Greiper, Viridian’s president and founder. For now, Cowen, the lead U.S. underwriter of Tilray’s IPO, won’t take any U.S.-based cannabis companies public, says CEO Jeffrey Solomon: “Until there’s clarity on federal law broadly, we’re going to continue to focus on the rest of the world.”
That makes Tilray even more of an outlier. It was not only the highest-flying IPO of 2018, according to Renaissance Capital, but also one of the top 10 performers in the U.S. stock market. That ironic result was possible under stock exchange rules because Tilray operated exclusively outside America. The company will only do business in jurisdictions where cannabis is federally legal, and it has had zero U.S. sales to date. As a result, the only Americans who have so far enjoyed the fruits of its economic contributions are stock investors and its U.S.-based employees (including its entire C-suite).
Kennedy, whose predictions about legalization have been profitable so far, believes an end to the U.S. ban is close at hand. But for now, the precarious legal dynamic gnaws at him every time he crosses back from Nanaimo into his native country. “I would not mention what we just did,” the CEO quietly advises as we sit on the tarmac in Seattle again, awaiting a customs officer to clear us to come home. While Kennedy has never been questioned, he has reason to be nervous: A few Canadian cannabis executives and investors have been detained at the border and even barred entry to the U.S. for life; a senior official at the U.S. Customs and Border Protection agency confirms that even American executives operating legally in Canada can face additional inspections upon their return. Adds Kennedy: “We generally don’t talk about what we do when we go back in the U.S.”
Constellation Brands: Jasper Juinen—Bloomberg via Getty Images; Molson Coors: Daniel Acker—Bloomberg via Getty Images; Altria: Jim R. Bounds—Bloomberg via Getty Images; Novartis: RGB Space—Getty images
In 2014, Founders Fund, Peter Thiel’s venture capital outfit, became the first institutional investor to announce a stake in the cannabis industry. Geoff Lewis, the partner who led the investment (and has since started his own fund, Bedrock), had the same experience with a dozen cannabis startups while looking for one to back. The owners would offer him a “product sample” or ask “if I wanted to smoke a joint”—something that was illegal at the time because Lewis didn’t have a medical marijuana prescription. The first entrepreneur who didn’t offer him a taste? Brendan Kennedy. “And that’s what I wanted to invest in—I wanted a team that didn’t use cannabis,” says Lewis. “It was about founders who were living by the line of the law.”
Kennedy can count on his fingers the number of times he tried pot before going into the business. He grew up in San Francisco as the sixth of seven children; his siblings would smoke, but Kennedy shied away. “I’m probably the quietest one of the bunch,” he says. He was born with a cleft lip that required repair surgery when he was 8 days old; his parents, fearful for his welfare, summoned a priest to baptize him before he even left the hospital. During his time at the then all-boys Jesuit prep school St. Ignatius—where his dad was a science teacher—and at UC Berkeley studying architecture, Kennedy worked construction. “If it was summer, I was wearing a tool belt,” he says. He later funneled his thirst for physical exertion into six Ironman triathlons. “We never got into illegal substances. It just wasn’t in our DNA,” says Christian Groh, Kennedy’s high school friend, fellow triathlete, and current partner in the cannabis business.
What Kennedy did have in his DNA was a knack for scanning data for auguries of the future and an uncanny memory for dates and figures. “Brendan thinks in terms of a timeline,” says Michael Blue, one of Kennedy’s Yale MBA classmates and the third cofounder of Tilray. After business school, he landed in 2006 at Silicon Valley Bank, working for an internal analytics startup focused on helping venture capitalists and their portfolio companies value their private stock. During the spring of 2010, the data began telling Kennedy a story about cannabis.
California was planning a ballot question on legalization that fall, and anecdotes about the issue repeatedly crossed Kennedy’s radar. Pulling Gallup poll charts on American attitudes toward controversial issues, he noticed a compelling trend: Support for gay marriage and marijuana legalization seemed to increase in lockstep, and state laws were following suit. The number of doctors willing to prescribe medical pot was steadily increasing. “It was inevitable the U.S. would legalize,” Kennedy says. “The frustrating part was, how did everyone else not see it?”
The doubts that dogged Kennedy the longest stemmed from his own ambivalence about the product. He began personally experimenting with pot after decades of abstinence, but he doesn’t remember any catharsis and didn’t like the unpredictability of the experience. His wife, Maria Chapman, says she’s never seen him high. Kennedy struggled to reconcile the enthusiasm he was hearing for therapeutic use from military vets and cancer patients with his own antidrug upbringing. “That was the hardest part from a D.A.R.E., cracking the egg on the frying pan, ‘This is your brain on drugs’ perspective,” Kennedy says. “How could this thing that Nancy Reagan said was so bad be a medicine that people use?”
At the same time, Kennedy was troubled by the law’s failure to distinguish marijuana from other narcotics like heroin, even as cannabis seemed to truly help people without putting them at risk of an overdose. “You probably will never see it, but he’s a real softie for those types of things, and it really affects his heart,” says Chapman. “It’s not all business.” Kennedy and several of his backers felt they were doing more than starting a company or going public. In some ways, they were building a field of dreams within cannabis—give people a bona fide market, and investors and politicians will come. “Our IPO—I’ve always said this is really an important form of political activism, against prohibition,” says Kennedy. His own non-pothead image makes him an ideal spokesperson to win over minds, says Solomon, the Cowen CEO, who has “a ‘no joke’ rule around cannabis” at his own firm. “If we can distance ourselves from the perception of Cheech and Chong, or two guys and a bong hanging out in the back of a van, then we have made huge strides in establishing this as a legitimate industry,” Solomon says.
Kennedy officially quit his job in the spring of 2011. One morning a few months later, he showed up with a PowerPoint presentation at the home of his old boss, Jim Anderson, the former president of SVB Analytics. The presentation was the genesis of Privateer Holdings, a private equity firm with a mission to acquire and create cannabis companies and brands. Kennedy made a data-driven case for how he expected legalization would unfurl. “He laid out this picture of the next 10 years,” recalls Anderson, now an administrator at the University of San Francisco. “He said, ‘I think there’s a sea change coming in opinion on cannabis.’ ” Anderson invested in Privateer’s first, modest fundraising round—a bet that has yielded a return of more than 100x since Tilray, of which Privateer owns 73%, went public. After the IPO, Anderson wrote to Kennedy: “Almost everything you predicted back in 2011 has come to pass.”
Privately, though, Kennedy and his cofounders often wondered if they were too early. Late in 2011, they spent their pooled savings (they won’t say exactly how much) on their first acquisition: Leafly, a marijuana and dispensary review site. The startup had next to no sales, but it did publish ratings on cannabis strains—sold legally or on the street—from users all over the world, providing a road map to the best pot on the planet. The lack of data in the largely illicit industry “terrified me,” says Kennedy; the Leafly purchase was “a gut decision in order to get data.”
Once they had it, they needed to monetize it. The plan was to sell advertising to dispensaries, turning Leafly into a kind of Yelp for cannabis. But Privateer struggled to attract investors, and revenue was slow to come. Soon Kennedy had drained his 401(k), maxed out his credit cards, and borrowed money from family members to pour into Leafly. He remembers emptying the jug of change next to his washing machine into the Coinstar at Safeway for a grand total of $196. There was a night when he didn’t even have enough money to order a pizza. “That was darkness unlike anything I’d ever faced,” he remembers. More than being broke, Kennedy and his partners feared what flaming out on a Hail Mary bet on pot would do to their career prospects. “We were worried we would always be known as failed pot guys,” Kennedy says.
Finally, the rest of the country started to prove Kennedy’s hypotheses. In 2012, Washington and Colorado became the first states to legalize recreational marijuana, and investors—and Leafly advertisers—wanted in. But perhaps the biggest opportunity came about almost by accident. In 2013, Privateer got a cold call from the health department of Canada, which was phasing in a new medical marijuana licensing process designed to professionalize that country’s industry. Health Canada had dozens of eager applicants who lacked funding to support a commercial marijuana grow operation and wondered if Privateer might invest. Unimpressed with the offerings, Kennedy and his partners had a different idea: Why not become growers themselves?
All they needed was marijuana. That’s where Leafly came in. The Privateer team crunched data from the site to identify the 20 most coveted, high-potency strains across Canada—creating a shopping list for themselves. Actually locating the bud was another story. “We would go and meet people at a Tim Hortons, and we would follow them down a road. Then we’d have to ditch a car,” recalls Groh. “We’d be in rooms with a lot of cash and weapons.” Patrick Moen, who left his job at the U.S. Drug Enforcement Administration to join Privateer in early 2014 and now serves as general counsel, accompanied Groh, typing up contracts on a laptop and handing out checks to backwoods cannabis growers. “It reminds me of my undercover days early on at DEA, you know, except I had backup,” says Moen. “I look back on it, and I’m like, What the hell was I thinking?”
CANNABIS COMMITTEE: From left: Privateer Holdings general counsel Patrick Moen with cofounders Kennedy, Michael Blue, and Christian Groh, at Privateer’s Seattle office.
Photograph by Spencer Lowell for Fortune
Those plants—from Master Kush to Island Sweet Skunk—were transported live to Nanaimo, in refrigerated trucks that rode the ferry to Vancouver Island, where they became the foundation of Tilray and its brand portfolio. Today, the genetic clones of more than 60 different “mother” plants grow in specimen jars in an R&D lab at Tilray’s headquarters. They, in turn, have propagated Tilray’s newer production facilities in Ontario and Portugal from scratch, a strategy the company will continue to employ as it scales up. “When you go to Starbucks—doesn’t matter if you go in Seattle or Iowa—and you order a caramel macchiato, you expect it to be the same everywhere. You can do the same thing for cannabis,” says Cowen’s Solomon. “Brendan and his team understood early on that their success is in their ability to deliver that kind of consistency.” The team has taken other cues from Starbucks too: To come up with the Tilray name (“til” as in tilling land, crossed with a sun ray) and logo, Kennedy hired the design firm of Terry Heckler, who created the iconic Starbucks mermaid emblem.
Tilray’s logo now appears on its dried (smokable) marijuana flowers, ingestible oils, and capsules. Each is packaged like prescription pills in bottles marked with the concentration of THC (the psychoactive ingredient that makes people high) and CBD—and, in Canada, warning labels about adolescent addiction. The company first recorded sales in April 2014 and had $5.4 million in revenue in 2015. This year, Wall Street expects sales to more than quadruple, to around $186 million, from $45 million last year. Tilray should also pass a major milestone in 2019: In January, it unveiled plans to release newly legalized CBD-infused products, from whey protein to sunscreen, in the U.S.—a move intended to give the company U.S. revenue for the first time.
To stay ahead, Kennedy spends a lot of time trying to predict which country will be the next to legalize marijuana, so that Tilray will be there when it does. This summer, he commissioned a model with 99 different inputs, from gay marriage’s legal status to a country’s dominant religion, to predict medical and adult use legalization. So far, it has given him an early heads-up on South Korea, which in late November stunned the world by legalizing medical cannabis.
As we exit Tilray’s Nanaimo warehouse, Kennedy excitedly notices the grass outside the building: “The lawn looks really good!” The last time he was here, he explains, the yard was overgrown with weeds—making a poor first impression on visitors. He let his displeasure be known inside the company. “It kind of drove me nuts,” he says. “We’re supposed to be growing things!”
Tilray workers fill an extractor that turns dried marijuana flowers into oils and capsules at Tilray’s facility in Nanaimo, B.C. Photograph by Spencer Lowell for Fortune
The Tilray brand didn’t really gain recognition in America until July 19, when it became the first cannabis company to have its IPO on a U.S. stock exchange. The offering raised $153 million, with shares priced at $17 apiece. At the stock’s peak in September, it had risen 1,159% in just two months.
Though the debut turned Tilray into a market darling, up until then it had been treated by much of Wall Street as a sort of redheaded stepchild. Kennedy was in a rental car garage in San Diego in mid-April on his wife’s birthday trip when he got the surprise phone call from the first bank that had agreed to underwrite Tilray’s IPO—letting him know they were backing out. (He won’t say which bank.) “I had to get out of my car because I was screaming so loudly, I didn’t want to scare my children,” he recalls. A second bank later had the same change of heart: Its board had nixed the deal for “reputational reasons.” When Cowen and Canada’s BMO eventually took it public, Tilray had to pay up for the privilege. To obtain the directors and officers liability insurance required of all public companies, Tilray had to pay five times as much as the typical rate for less than half the coverage, according to CFO Mark Castaneda.
In fact, while Tilray’s business may be perceived as involving a taboo or a vice, there’s no legal reason for banks or investors to be squeamish about working with it, according to John F. Walsh, the former U.S. attorney for Colorado who is now a partner at WilmerHale. “Under U.S. law, if there is essentially drug activity going on in another country that is entirely legal in that other country, it is not a U.S. federal narcotics crime,” Walsh says. Importantly for investors, he adds, that means Americans who finance such a “foreign legal marijuana business” would not be violating U.S. anti–money laundering laws: “It is pretty clear-cut.”
Yet no one imagined Tilray would soon be worth more than Snapchat. Kyle Lui, a partner at DCM Ventures, strikes a wistful tone when he admits that he passed on investing in Tilray when it raised money privately, balking at its nearly $1 billion valuation, in early 2018. “I don’t think we could have anticipated that the public markets in the U.S. would have received Tilray to the extent that they have,” says Lui.
Even after retreating more than halfway from its peak, Tilray’s stock is the poster child of the so-called marijuana bubble. Valuations like Tilray’s—trading at around 50 times estimated sales—have rarely been seen since the dotcom boom, says Chris Brown, founder of the $111 million hedge fund Aristides Capital. Brown didn’t even bother to model Tilray’s future sales before deciding to short it, a move that so far has earned him nearly $1.5 million: “When the price for something is so high, I think the onus is on Tilray to be the most perfect, magical, wonderful exception in the world.”
That world is a highly fractured one. Tilray has the largest international footprint among legal-weed companies and is cannabis’s second-biggest player (after Canada’s Canopy Growth), but its estimated market share is only 8% in Canada, and less than 1% everywhere else. Still, Moez Kassam, cofounder and principal of Toronto hedge fund Anson Funds, which financed most of Canada’s public cannabis companies, was convinced after visiting Nanaimo that Tilray would eventually take the lead. “You knew this was a best-in-class business,” Kassam says. “I think Tilray will be considered cheap in a few years.”
Kennedy in Tilray's Nanaimo grow facility. “It was inevitable the U.S. would legalize,” Kennedy says. “The frustrating part was, how did everyone else not see it?
Even Kennedy, previously a valuation expert, has trouble putting a number on how big Tilray could be. For the foreseeable future, he notes, his priority is growth, not profit. (“Think Amazon, not Kroger.”) Because black market sales dwarf legal ones globally, it’s impossible to size up true demand for cannabis, or how large it might become. Legalization will enable clinical research that could discover veritable Russian nesting dolls of new uses for cannabis’s hundreds of compounds, but that research could also bring new complications: Initial studies show possible ugly side effects to regular pot use, from dependence to psychosis.
Legalization also means more competition—including from small American operators currently confined to states that have legalized—and the price pressures of what is ultimately a commodity-driven business. Kennedy has already become familiar with the singular joys of agriculture. Before Tilray could open its Ontario marijuana farm, it first had to harvest the red and green peppers that were growing there. Then there’s the matter of the bugs. In lieu of pesticides, Tilray spends about $100,000 a month on insects that eat other pests (they arrive in pouches that look like tea bags).
In five years, Kennedy hopes, 90% of the pot Tilray sells will be cultivated by other companies. “I never thought, ‘In my next business, I want to be a farmer,’ ” he says. Rather, he models himself after Joseph Kennedy (no relation), the patriarch of the political dynasty who, as Prohibition was sunsetting, traveled abroad acquiring import rights to liquor brands like Dewar’s Scotch whisky and Gordon’s gin. And Brendan Kennedy has complete conviction that “the end is near” for U.S. cannabis prohibition. “I don’t know when the Berlin Wall will topple over, but we’re getting closer and closer to that point,” he says.
It may happen sooner than people think, thanks to the drumbeat of next year’s presidential election. More of the public now views marijuana as a salve for confounding problems from the opioid crisis (overdose deaths dropped 21% to 25% in states with medical marijuana laws, a 2018 study by the think tank Rand found) to government deficits. Democratic hopefuls have signaled they will champion the issue. On the other side of the aisle, a recent Gallup poll found 53% of Republicans now support legalizing marijuana. That shift is owing in part to a concerted effort by advocates to reframe the debate in terms of states’ rights.
Among the people persuaded by that argument is President Trump, who has pledged to back legislation that would protect states’ marijuana laws from federal interference. And in a fraught campaign season, legalization could be a winning play. “We could envision a scenario in 2020 where the Trump administration could actually deem it politically advantageous to co-opt the issue from the Democrats and come out the hero,” Vivien Azer, an analyst at Cowen, told reporters in early January.
If Kennedy were setting a line in Vegas, he likes to say, he would pick 2021 as the year the U.S. will legalize cannabis. If he’s wrong, and the U.S. doesn’t budge? Not the end of the world, he says; he expects medical legalization to double to 70 other countries by then. Sure, as an American business leader, he’d feel let down by his government: “They’ll basically be ensuring that the companies that dominate this industry in the next decade are all based outside the U.S.” For the CEO of a Canadian company, though, that’s not really a problem.
A version of this article appears in the February 2019 issue of Fortune with the headline “Wall Street’s Contact High”
80 Acres Farms Secures Significant Financing Round Led By Virgo Investment Group To Accelerate Indoor Vertical Farming Growth
NEWS PROVIDED BY 80 Acres Farms
January 15, 2019
Cincinnati, Ohio
80 Acres Farms, a leader in the rapidly growing indoor vertical farming industry, announced it has received a significant investment from Virgo Investment Group, a San Francisco Bay Area based private equity firm that invests in companies transforming and disrupting high-potential industries. Terms of the financing were not disclosed.
80 Acres Farms provides customers with a wide variety of locally grown, just-picked leafy greens, microgreens, and vine crops, including the world's only tomatoes and cucumbers grown completely indoors using just LED lighting. The company has developed its own artificial intelligence-powered growing system, sophisticated data monitoring, and automation technologies to deliver high quality and nutritious products at an affordable price. By locating its indoor farms close to customers, 80 Acres Farms is able to eliminate the costs, time and environmental impact of cross-country transportation, providing customers with a fresher, longer lasting product while drastically reducing food waste. 80 Acres distributes to major national grocers, local retailers, restaurants, and food service companies from its facilities in Ohio, Arkansas, North Carolina and Alabama.
"Virgo Investment Group joins our existing notable and experienced food industry investors in supporting the Company to rapidly commercialize the indoor vertical farming technology we have developed over the past three years," said Mike Zelkind, co-founder and chief executive officer of 80 Acres Farms. "We are optimizing every aspect of our production processes and driving down costs, which is crucial to scaling an indoor farming business like ours."
"We are excited to partner with highly experienced food industry leaders Mike Zelkind and Tisha Livingston to bring great tasting, freshly picked produce to local markets year round," said Eli Aheto, partner of Virgo Investment Group. "80 Acres Farms has created a unique and automated growing process and has built great relationships with its retail customers. We want to help accelerate the company's growth in this multi-billion-dollar market. The 80 Acres investment is an expression of Virgo's longstanding focus on investing in energy efficiency opportunities driven by reduced equipment costs. Virgo has completed investments in utility-scale wind, community solar, electric vehicle charging and now an LED lighting driven business."
The Virgo investment will enable 80 Acres Farms to complete the previously announced facility in Hamilton, Ohio, which will be the first fully automated indoor farm in North America. The first phase of the Hamilton project under construction is expected to be operational in early 2019. It will be automated from seeding to growing to harvesting for the highest quality and food safety standards. The Hamilton facility will feature handling robotics, artificial intelligence, data analytics, and around-the-clock monitoring sensors and control systems to optimize every aspect of growing produce indoors. The facility will allow 80 Acres Farms to begin to service the substantial and growing demand for fresh, locally grown produce year-round from both retailers and restaurants.
"Over the past three years we have provided our customers with fresh, flavorful and nutritious produce grown locally in our facilities with no pesticides and highly efficient usage of water and nutrients," Zelkind said. "We are rapidly increasing yields for our produce, while advancing each generation of our grow zone designs to lower capital costs, production costs and reduce the use of natural resources. Our facilities represent the realization of the next generation of farming. Our vision is to prove that indoor farming can be fully-automated, commercially scalable, higher-yielding, and profitable.''
About 80 Acres Farms
80 Acres Farms is an indoor farming pioneer providing customers with flavorful, and nutritious locally grown fruits and vegetables at affordable prices. Utilizing state of the art proprietary technologies, including modular grow zones, customized LED lighting, precisely-tuned climate controls, and an artificial intelligence powered growing system, the Company is able to offer customers a wide variety of pesticide free produce with a longer at home shelf life that exceeds the highest standards in food safety. 80 Acres has demonstrated early success distributing major national retailers and food service distributors. Based in Cincinnati, Ohio, the company was founded in 2015 by veteran food industry executives Mike Zelkind and Tisha Livingston who are supported by a deep team and a board of directors representing executive and leadership experience at leading food, healthcare, and other companies. For more information, please visit www.80acresfarms.com.
About Virgo Investment Group
Founded in 2009, Virgo is a thematic investor with the mission of building meaningful businesses. Virgo partners with Founder-led or Family-owned businesses where both existing owners and management have a material equity stake in the business. Virgo targets companies undergoing industry or company-specific change, which are executing on an identified inflection point in value. The Firm has invested over $1.1 billion, completing 52 investments to date.
Virgo has flexible capital that allows the Firm to provide differentiated solutions to current asset owners and existing shareholders. Virgo is an actively engaged investor. We don't just buy value; we work to create value. The Firm's Spica Alpha Unit drives value-add initiatives post-investment via a focus on human capital transformation, business process enhancement and technology implementation. We find our meaning at Virgo in creating and in reviving the soul of companies. It always starts with and ends with the soul. For more information, please visit www.virgo-llc.com.
SOURCE 80 Acres Farms
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“Indoor Farming Is About Producing An Economic Product By Using Technology”
Bowery Farming raises $90 million
“Indoor Farming Is About Producing An Economic Product By Using Technology”
"The mistake in our industry is that many people tribute the soul success of indoor farming to LED. LED makes indoor farming viable. But if you want to make indoor farming scalable, you have to think in trends that are happening in robotics, automation, computer vision and machine learning." Speaking is Irving Fain, CEO with Bowery Farming. Yesterday the company announced a $90 million funding round, led by GV (formerly Google Ventures). Additional investors in this round include Temasek (the global investment company headquartered in Singapore), Dara Khosrowshahi (CEO of Uber), David Barber’s fund Almanac, First Round Capital, GGV Capital and General Catalyst. What's their secret? “Bowery Farming isn’t just about focusing on growing indoors, it is also about producing an economical product by using technology.”
Indoor farming
Indoor Farming is a hot topic these days. With on one hand companies going through the roof and on the other hand companies having to give up their activities, there's obviously both opportunities as well as major challenges in the industry. "Overall it has been an exciting time for our industry of indoor farming. We work in ways that ten years ago weren’t possible," Irving Fain with Bowery Farming explains. The company opened up their first farm in 2017 in New York. "Indoor farming is not just putting up four walls. It is controlling the environment to provide the growing population in cities with fresh food.”
To Bowery Farming, the line between techniques and producing food is a thin one. In totally controlled environments they are able to grow consistently, pesticide-free and year-round, regardless of the climate. “Given the level of control, we are not only growing twice as fast as the field, we are getting more yield of every crop cycle, as well as more crop cycles per year than the field does. We can grow a lot faster while saving over 95% of water.” Then there’s traceability, producing local and food safety – especially in these days an important reason to keep an eye out for indoor farms. Bowery’s farms are SQF certified, the highest level of food safety, and they implement stringent food safety policies so that retail partners and customers can be confident purchasing produce that has gone through the highest levels of food safety and quality testing.
Want to take a peek into the farm? Bowery's head of R&D and BoweryOS, Henry Sztul, sat down with Fluence Bioengineering to share how they are able to cultivate food 365 days a year in a highly productive and efficient way.
Software control
One of the unique points of Bowery Farming specifically is their own software control system: BoweryOS. “We are not only a farm, but also a tech company. We’ve built a proprietary software system that uses automation, machine learning and vision systems and sensors to monitor our plants 24/7 and collect millions of data points. This allows us to constantly iterate on each varietal, tweak flavor profiles, provide each crop exactly what it needs to thrive, and harvest each crop at the exact right time. BoweryOS will also tell the farmer what to do, when and how, which means that we don’t necessarily need to hire experienced farmers.” According to Irving, the lack of need for skilled labour is one of the points that will assure Bowery Farming of a future not touched by the troubles many indoor farms are in.
Viable indoor farming
“We honor the innovation that’s been going on for decades in places like the Netherlands. The Dutch growers have been innovators in agriculture for a long time. With what we are building here, we take the knowledge of all those years and innovate on top of that,” says Irving.
As an example, he recalls the developments in LED lighting, making indoor farming possible in a way that hasn’t been before. “Part of the indoor farming developments occurred thanks to LED. LEDS were expensive for a long time. In the last seven years they have dropped in cost by 85% and doubled in efficiency. And even more interesting: they are dropping again and will become twice as efficient as today,” he confirms. “The mistake in our industry is that many people tribute the soul success of indoor farming to LED. It makes indoor farming viable, that’s for sure. But if you want to make a solid business case, indoor farming has to be scalable. Therefore you have to think in trends that are happening in robotics, automation, computer vision and machine learning. These are the things that allow the economics of the business to change in various ways. Bowery Farming isn’t just about focusing on growing indoors, it is also about producing an economic product by using technology.”
Proof of concept
With the first Bowery farm, Irving has delivered his proof of concept in the last couple of years, both tech wise as in the market. The company supplies to a number of retail outlets like Whole Foods and has increased distribution with the opening of the new farm. “Together we’re expanding in the market: we deliver to a number of Whole Foods and Foragers in the area and continue to grow. We’ve also opened up some foodservice partnerships with Temple Court, sweetgreen and Dig Inn in the New York area.”
According to Irving, the growth isn’t ending. “Our biggest challenge is to get people to really believe in this industry and in the importance of what we’re doing.” This might be pretty easy with the current circumstances – the E.coli outbreak. But there’s more, Irving explains. “Thanks to our efficient use of supplies and nearby growing, we’re offering a product that’s premium in terms of quality, but pricewise equivalent to field produce.”
Selling the system?
Even though he’s currently occupied fully with the recent opening of their new farm, the eyes at Bowery are set on the horizon. “The opening of our second farm is just the beginning. The roadmap is enormous, we have plenty more opportunities. We have a lot of interest both from consumer and retailer. Although we focus on succeeding in the New York market, the growing popularity of people moving into cities is not only an issue in the US but everywhere. Ultimately I see Bowery Farming all around the world using our technology to provide fresh food to urban environments.”
The recent $90 million funding is to contribute to this. Prior to this round, Bowery raised $27.5 million from investors. Bowery plans to use the capital to scale their operation in new cities across the country and open multiple farms by the end of 2019. This funding will also enable them to continue growing the team, investing in technology and innovation across the company.
Does he consider expanding by selling their technique instead of opening up new farms on their own? For now the answer is no. “For now there is so much learning to be done. We fully focus on building and designing to put us in a better position.” He explains why that remains important. “We are a technology company, but our product is food.” It sounds simple, but to Irving it is important to not lose sight on that. “At the end of the day we are growing food for people. They bring it home to their families, are at the dinner table. That’s a topic we should never let out of sight. While we are developing all this great technology, the end result has to be good food.”
For more information:
Bowery Farming
https://boweryfarming.com/
contact@boweryfarming.com
Publication date : 12/13/2018
Author: Arlette Sijmonsma
© HortiDaily.com
Canadian Automated Vertical Farm Systems Developer Inno-3B Raises C$6m Seed Funding
Canadian vertical farming systems developer Inno-3B has completed its first seed round of financing at nearly C$6 million ($4.45m).
Located in Quebec and Ontario, the company provides turnkey vertical farming systems for a variety of customers, from researchers, biotechnologists, and small-scale farmers, to regional and multinational producers.
Inno-3B provides fully automated, controlled, scalable, and remotely monitored robotic growing systems with real-time support to help customers grow organic produce, berries, and herbs locally.
This week, the business benefitted from a seed investment round led by the Ecofuel Fund, with the participation of Desjardins Capital, the Fonds de Solidarité FTQ, Premier Tech, the Fonds de Solidarité FTQ Bas Saint-Laurent, Investissement Québec and the Ministère de l’Économie et de l’Innovation.
Inno-3B said that the C$6m will enable the business to implement a demonstration of its technology in the context of real-time operations, a move which is designed to accelerate product marketing and ensure constant support for customers. This will include creating 10 new jobs to advance the company’s design and manufacturing processes; the company already has 15 employees across its two locations.
“We are enthusiastic to start this new phase of development with such strategic investors dedicated to our success,” said Martin Brault, President and CEO of INNO-3B, adding that the Ecofuel Fund, Desjardins Capital and the Fonds de solidarité FTQ were, in particular, actively supporting the company’s growth.
Richard Cloutier, president and CEO of the Ecofuel Accelerator and managing partner of the Ecofuel Fund, said that Inno-3B’s innovative technology had the capacity to enable customers to produce vegetables with low production costs, high yields and low energy consumption, and to do so all in a small space.
“Innovation makes it possible for the company to respond to the growing needs of consumers for fresh quality products while also reducing greenhouse gases significantly,” he said.
In addition to accelerating Inno-3B’s marketing push, the new funding will also be used help to intensify R&D activities within the business.
“Thanks to the technological advances made in recent years, we have managed to position ourselves among the leaders in automated vertical farming,” said Brault, revealing that the company was also exploring certain ‘interesting synergies’ relating to artificial intelligence (AI) as part of its future development planning.
The Ecofuel Fund is a C$30m venture capital investment fund and accelerator offering customized training programs for clean technology companies. Powered by Cycle Capital, Ecofuel works with entrepreneurs to assist them in starting businesses to breakthrough internationally.
Ecofuel is funded by Investissement Québec, BDC Capital, Fondaction, the Fonds de solidarité FTQ and the Centre québécois de valorisation des biotechnologies (CQVB).
Desjardins Capital, working with a background of nearly 45 years expertise, is committed to the promotion and support of small and medium-sized businesses in Quebec, having assets under management of C$2 billion. The fund contributes to the sustainability of 460 businesses, cooperatives and funds operating in various sectors of activity and from all regions of Quebec.
The Fonds de solidarité FTQ is a capital development investment fund that is financed with Quebec savings. With net assets of C$13.7 billion as at November 30, 2017, the fund contributes to the creation and maintenance of 186,440 jobs, partnering with more than 2,700 companies and with more than 645,000 shareholders.
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BREAKING NEWS: Heliponix Wins Second Stage Investment From Purdue University Venture Ag-Celerator Fund. Midwest AgTech Investments On The Rise.
Midwest indoor agriculture startup, Heliponix (Evansville, IN) has won a second stage investment of $50k from the Purdue Ventures Ag-Celerator fund in West Lafayette, IN
By iGrow News | December 19, 2018
Midwest indoor agriculture startup, Heliponix (Evansville, IN) has won a second stage investment of $50k from the Purdue Ventures Ag-Celerator fund in West Lafayette, IN. The company, Heliponix provides consumers rotary aeroponic™ appliances called GroPods®. Although the appliance is the size of a dishwasher, it is capable of yielding a full head of leafy green vegetables on a daily basis by staggering harvests. These unprecedented yields are achieved by constantly replacing the non-perishable seed pods supplied by a monthly subscription. Not only is the appliance is able to grow CLEAN plants faster and more reliably than outdoors, but it only uses $7 of energy per month, and 6 gallons of water per month! It can even be configured to grow fruiting plants, or dwarf varieties of specialty crops.
The advanced IoT algorithms completely automate the farming process for consumers who have no previous knowledge or time to spend catering to the needs of plants. “We turn black thumbs green by collecting an incredible amount of data from the sensors in the GroPods deployed across the USA which is then fed into our machine learning algorithm”, siad CTO and Co-Founder Ivan Ball. “We then use this data to simulate and maintain environmental conditions for specific plants over WiFi without any additional maintenance from the user”.
Time lapse video generation included in the mobile application of each GroPod user.
This is only possible through the former NASA student engineers’ multiple utility patents which were filed after Co-Founders Scott Massey and Ivan Ball began prototyping designs in their apartment as undergraduate students at Purdue University. They had met while previously designing hydroponic growth chambers researching the optimal light spectrum to grow plants using LEDs with the least amount of energy. This research study was sponsored by a NASA grant across several universities to advance interplanetary, agricultural technologies under Dr. Cary Mitchell. However, Massey and Ivan went against the graduate route of most engineers in this position, and co-founded the company on a theory that the evolution of agriculture is on an irreversible trajectory towards consumer aeroponics appliances.
Young farmers inspecting their harvest of genova basil in their GroPod.
“If you wanted ice in the 1800’s, you needed to wait until winter when the climate allowed freezing temperatures. This was the status quo until the invention of refrigeration allowed ice to be made in centralized, ice factories that could produce year round. Ice factories defined the ice industry until personal ice factories, or refrigerators eventually became the standard means to produce ice, said Massey. “Much like the ice industry, agriculture is completely dependant on a stable climate in a world with a climate less stable than before. This was true until micro controllers and LEDs needed to farm indoors made recent, giant leaps in efficiencies/cost, so vertical farming could be more profitable than ever before. Despite the overwhelming amount of capital being invested into massive vertical farms, there are few instances in history where a decentralized version of a technology did not greatly disrupt the market share for centralized business models. By overcoming the knowledge gap that regular people lack about farming with sensors, IoT software, and automation; we have opened a new frontier for Agriculture, and we will take a giant leap into the future of food”.
GroPod at Forbes AgTech Summit in Indianapolis.
The aeroponic appliance, consumer business model has many inherent advantages. The nonperishable seed pods are manufactured in an automated k-cup packaging facility that drop ships directly to consumers to consolidate the entire supply chain through their proprietary software. Paying consumers invest into the hardware as opposed to institutional investment dollars for large vertical farms that are capital intensive with employees on payroll needed to maintain operations. There are no building or construction permits required for this business model that can be scaled to potentially millions of Americans without extensive capital investments beyond initial tooling, operating capital for inventory, and marketing needs. Although these benefits are all welcomed in the age of toxic outbreaks, the appliance is still listed at $2k which Massey explains is normal for any new product launch.
“The toxic Ecoli outbreak that killed too many people is symptom of a much larger problem in our current food system. Consumers are demanding transparency and accountability as the trust in organic labeling continues to fall with more scandals, and these toxic outbreaks become more common. This reactionary food system is only alerted after a death or ailment has been linked to a plant which often times goes unnoticed as the cause of the illness. We believe farming is a basic human right that every individual is entitled to, and we have a proactive solution for this global problem. When our farmers calculate the return on their investment (typically 1-2 years depending on the crop), they often find an immediate return on their investment when including the health benefits of eating safe and fresh produce that tastes better for themselves or their families”, according to Massey.
Harvest of a customer’s romaine lettuce, red russian kale, arugula, spinach, and genova basil.
Massey attributes their success in fundraising, team building, and sales through the resources available to entrepreneurs in the state of Indiana. The Purdue foundry, Agrinovus Indiana, CoWork Evansville, the Indiana Small Business Development Center, Purdue WestGate, Centric Indiana, Techpoint, the Vectren Foundation, the Mandela Washington Fellowship, and Elevate Ventures among many other entities have given exposure, capital, and industry introductions needed to not only start, but scale an AgTech company. The convergence of these resources in Indiana’s AgBioScience sector have amounted to an entrepreneurial hotbed throughout the state, and it’s Time To Tell
CEO, Scott Massey (center) speaking at the recent Agrinovus Innovation Summit.
Uber CEO And Alphabet Invest In Urban Farming Startup
December 12, 2018
The two-year-old company raised $90 million in funding
Bowery Farming is part of a new wave of ag-tech startups
Farmers work at the Bowery Farming Inc. indoor farm in Kearny, New Jersey. Photographer: David Williams/Bloomberg
Bowery Farming Inc., a two-year-old startup that uses robotics to cultivate crops indoors, is on track for more growth. The New York-based company plans to announce on Wednesday that it raised $90 million from investors including Alphabet Inc.’s GV and Uber Chief Executive Officer Dara Khosrowshahi, said Bowery’s co-founder and CEO, Irving Fain. The company declined to provide its valuation.
Bowery is part of a new crop of agriculture technology startups growing leafy greens in controlled environments near cities. Last year, Plenty, a San Francisco-based vertical farming company, raised $200 million from the Japanese conglomerate SoftBank Group Corp.’s Vision Fund. Bowery grows its veggies in layers of sensor-rich trays that move and react to humidity, carbon dioxide and light. One square foot of Bowery’s indoor farm is 100 times more productive than an equivalent plot of arable land, Bowery says. Plenty makes similar claims.
Rows of produce grow in trays at the Bowery Farming Inc. indoor farm in Kearny, New Jersey. Photographer: David Williams/Bloomberg
Part of the urgency of Bowery’s business plan is the prospect of looming global food shortages. The United Nations says food production will need to double in the next three decades to feed the planet’s swelling population. Bowery and its ilk see a business opportunity in building massive indoor farms in and on the outskirts of cities -- a costly proposition, but one that could cut down on waste and ensure fresher produce.
"This round is solid validation for the scope of the problem and the opportunity," said Fain. To date, Bowery has raised $118 million from investors including First Round Capital and General Catalyst. GV, formerly Google Ventures, led the most recent investment, which includes funding from Singapore’s state investment firm, Temasek Holdings Pte.
Dara Khosrowshahi | Photographer: Simon Dawson/Bloomberg
Fain said Uber’s Khosrowshahi became an investor because of his interest in futuristic cities. "Uber is a big believer in cities and the importance of sustainable cities," said Fain.
Bowery currently operates two indoor farms in Kearny, New Jersey. The facilities send greens like kale, bok choy and butterhead lettuce to Whole Foods and salad chain Sweetgreen. Fain said the fresh funding will be used to open new farms in the U.S. and internationally. Bowery declined to disclose how many new farms are in the works or where they would be located. "There is no question that we intend to have our farms in cities across the world," Fain said.
Roots of arugula plants are seen inside plastic trays at the Bowery Farming Inc. indoor farm. Photographer: David Williams/Bloomberg
Andy Wheeler, a Bowery board member and partner at GV, echoed Fain’s global expansion ambitions. "The company is poised to have a significant impact on the global produce market," he said.
Bowery is planning to expand its headcount too, Fain said. The company employs 65 people. Some of these employees could come from Amazon, Fain suggested. Though competition for talent will likely be tough as the e-commerce giant ramps up hiring for its new office in New York. This year, Bowery hired Brian Donato, a former senior operator of Amazon Fresh and Pantry food delivery services; Scott Horoho, a former senior Amazon engineering manager; and Jeff Raines, a former director of data center engineering for Amazon Web Services.