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Infarm Looks to Raise $200m For Vertical Farm Expansion
Berlin-based Infarm has closed an initial $140m of a planned $200m Series C funding round, said people involved in the deal, at more than double the valuation at which it raised $100m a year ago
German Start-Up Grows Herbs and Salads
Inside Supermarkets and Restaurants
Infarm’s latest funding deal will value the company in the hundreds of millions of dollars © Simone M.Neumann - www.simone-m-neumann.de
June 28, 2020
by Tim Bradshaw in London
Infarm, a German start-up developing indoor farms, is closing in on a new $200m investment, hoping to capitalise on renewed investor appetite for companies that can address food supply problems that arose during the pandemic.
Berlin-based Infarm has closed an initial $140m of a planned $200m Series C funding round, said people involved in the deal, at more than double the valuation at which it raised $100m a year ago. The deal values the company in the hundreds of millions of dollars, these people said.
Unlike other vertical farming ventures that install crops in huge warehouses, Infarm’s smaller “modular” units sit on supermarket aisles and inside restaurants. These hydroponic farms can avoid the use of pesticides thanks to a tightly controlled environment, and reduce lengthy supply chains by offering produce that is fresh at the point of sale.
Hundreds of its small farms growing herbs and salads can be found on the shelves of supermarkets after it struck deals with Marks and Spencer in the UK and Kroger in the US, as well as European supermarkets including Metro, Casino, and Migros. Last month it signed up Aldi in Germany.
LGT Lightstone, the “impact investing” arm of the Princely House of Liechtenstein, is said to be among Infarm’s new investors, joining venture capitalists including Atomico, Balderton, TriplePoint, Cherry Ventures, and LocalGlobe. LGT Lightstone is also an investor in Lilium, the German air-taxi developer.
Infarm’s modular units sit on supermarket aisles and inside restaurants © Simone M.Neumann - www.simone-m-neumann.de
“Vertical farming is a pandemic-proof business,” said one investor.
Infarm declined to comment. LGT Lightstone did not immediately respond to a request for comment.
But while the Covid-19 pandemic’s pressures on food supply chains have opened opportunities for new producers such as Infarm, it has also hit demand from restaurants, which make up a smaller portion of the company’s business.
While tech investing has continued during the pandemic, lockdowns make it harder for potential investors to perform due diligence on hardware-based companies such as Infarm.
The company was founded in 2013 by Osnat Michaeli and brothers Erez and Guy Galonska. It competes with several other venture-backed indoor farming start-ups including Plenty, Bowery Farming and AeroFarms.
The group was founded in 2013 by Osnat Michaeli, pictured, along with brothers Erez and Guy Galonska © Simone M.Neumann - www.simone-m-neumann.de
Bowery has raised more than $140m from investors including Alphabet’s GV, according to Crunchbase, while SoftBank-backed Plenty has a $400m war chest.
Infarm’s latest fundraising, when complete, would allow it to close the gap with Plenty, which also counts Amazon founder Jeff Bezos and former Google chief Eric Schmidt among its investors. In late March, Bloomberg reported that Plenty was looking to raise at least $100m in new financing.
However, Infarm’s expansion has outpaced Plenty, which remains largely focused on building facilities in its native California.
While larger warehouses such as Plenty’s have high upfront costs and are expensive to provide with lighting and air conditioning, Infarm argues its modular farms are easier to scale and prove appealing to retailers looking for differentiation. Investors hope that it can also build a brand of its own, unlike most agricultural suppliers.
Additional reporting by Emiko Terazono
CubicFarms Leverages Its Expertise In Controlled-Environment Agriculture And Announces Launch of new Control Room System And Sale To Career Field Farmer And Entrepreneur
CubicFarms’ Control Room is assembled inside its proprietary stainless steel, fully insulated growing chamber with the option to customize features such as lighting, automated irrigation and nutrient delivery, and full climate control for temperature, humidity and carbon dioxide levels
VANCOUVER, BC, JUNE 18, 2020 – CubicFarm® Systems Corp. (TSXV:CUB) (“CubicFarms” or the “Company”) is pleased to announce the launch of its new Control Room system for sale to growers looking to grow crops more efficiently by controlling every aspect of the growing environment.
CubicFarms’ Control Room is assembled inside its proprietary stainless steel, fully insulated growing chamber with the option to customize features such as lighting, automated irrigation, and nutrient delivery, and full climate control for temperature, humidity, and carbon dioxide levels. The system has a variety of sensors available, all of which can be remotely monitored and controlled.
Photo: Inside a CubicFarms Control Room, complete with LED light fixtures, an automated heating, cooling and ventilation system, and wired environmental controls.
The Control Room enables growers to have complete control over the growing environment that is so crucial for high yields and quality – a capability especially well suited for research and development purposes. The temperature, humidity, lighting, and airflow can be properly calibrated to suit crop requirements.
“We are pleased to launch a new product that allows growers to conduct their own growing trials inside a controlled-environment chamber. We’ve had numerous inquiries for this kind of solution and are pleased to be able to support our customers with this technology. We see good market potential for this solution that helps growers fine-tune the optimal environmental parameters for growing crops indoors,” commented CubicFarms CEO Dave Dinesen.
“We are confident that once growers experience the consistency and quality of yields achieved in the Control Room, they will seek to automate growing inside our Fresh Produce system, which is essentially the Control Room plus motorized rows of trays containing crops that follow a patented path inside the chamber to ensure all sides of the crop are evenly bathed in light to maximize growth.”
CubicFarms control rooms can be placed inside an existing warehouse or greenhouse to serve as controlled-environment growing chambers to test and develop crop varieties. They can also be placed outside in many environments. It is well-suited for many types of growers, including:
Photo: CubicFarms control rooms being installed at the customer’s site.
Greenhouse growers and vertical farmers who have a need to hold larger plants in an environment separate from their existing facility. As an example, a hemp grower who would like to hold the mother plant used for cloning in an ideal environment;
Growers in the floral or nursery industry who need to hold plants or bulbs at a specific temperature or humidity; and
Growers undertaking research activities that require different environmental controls than their typical growing space.
CubicFarms announces first sale and installation of control rooms to BC-based field farmer and food entrepreneur
The Company is pleased to announce that it has sold three control rooms to a customer in British Columbia. The control rooms were recently installed at the customer’s site. The customer, an experienced field farmer, and consumer packaged foods expert, plans to engage in controlled-environment growing trials of various crops that have traditionally been grown in the field. Mr. Dinesen added: “I’m very excited that CubicFarms can support our customers by leveraging technology we already have, but in this unique way. Our customers never cease to amaze me in how creative and inspiring they are when looking to grow their businesses.”
Neither the TSX Venture Exchange nor it’s Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
About CubicFarm® Systems Corp.
CubicFarm Systems Corp. (“CubicFarms”) is a technology company that is developing and deploying technology to feed a changing world. Its proprietary technologies enable growers around the world to produce high-quality, predictable crop yields. CubicFarms has two distinct technologies that address two distinct markets. The first technology is its patented CubicFarm™ System, which contains patented technology for growing leafy greens and other crops. Using its unique, undulating-path growing system, the Company addresses the main challenges within the indoor farming industry by significantly reducing the need for physical labor and energy, and maximizing yield per cubic foot. CubicFarms leverages its patented technology by operating its own R&D facility in Pitt Meadows, British Columbia, selling the System to growers, licensing its technology and providing vertical farming expertise to its customers.
The second technology is CubicFarms’ HydroGreen System for growing nutritious livestock feed. This system utilizes a unique process to sprout grains, such as barley and wheat, in a controlled environment with minimal use of land, labor, and water. The HydroGreen System is fully automated and performs all growing functions including seeding, watering, lighting, harvesting, and re-seeding – all with the push of a button – to deliver nutritious livestock feed without the typical investment in fertilizer, chemicals, fuel, field equipment, and transportation. The HydroGreen System not only provides superior nutritious feed to benefit the animal but also enables significant environmental benefits to the farm.
Cautionary statement on forward-looking information
Certain statements in this release constitute "forward-looking statements" or "forward-looking information" within the meaning of applicable securities laws, including, without limitation, statements with respect to the market potential of the Control Room system and system capabilities. Such statements involve known and unknown risks, uncertainties, and other factors including evolving market conditions, which may cause the actual results, performance, or achievements of CubicFarm Systems Corp., or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements or information including the Company obtaining the approval of the Offering from the TSX Venture Exchange. Such statements can be identified by the use of words such as "may", "would", "could", "will", "intend", "expect", "believe", "plan", "anticipate", "estimate", "scheduled", "forecast", "predict", and other similar terminology, or state that certain actions, events, or results "may", "could", "would", "might", or "will" be taken, occur, or be achieved.
These statements reflect the Company's current expectations regarding future events, performance, and results and speak only as of the date of this news release. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except as required by securities disclosure laws and regulations applicable to the Company, the Company undertakes no obligation to update these forward-looking statements if the Company's expectations regarding future events, performance, or results change.
Kimberly Lim
VP, Corporate Communications & Investor Relations
Mobile: 236.858.6491
Office: 1.888.280.9076
Email: kimberly@cubicfarms.com
Exelon Invests In Reducing Indoor Ag Energy Needs And Costs With GrowFlux
“GrowFlux specifically can increase yields in indoor farming making it more economical for city centers and where it can serve often underserved communities fresh and healthier foods.”
June 11, 2020
A welcome impact from the Covid-19 pandemic has been clearer skies and returning wildlife to usually polluted areas after industry, transport systems, and more shut down across the world, reducing carbon emissions.
Today marks two months since the UK’s electricity industry last used coal; the longest period since the Industrial Revolution began more than 200 years ago and well beyond the 18 days, 6 hours and 10 minutes record which was set in June last year, according to the BBC. Renewable and nuclear energy have stepped in to make up the shortfall in a trend that’s been particularly pronounced in the US where renewables supplied more energy than coal for the first time ever this year.
Agriculture’s impact on the environment, particularly surrounding its carbon emissions, has been flung into the spotlight in recent years, particularly by alternative meat and animal products startups keen to promote the environmental credentials of their plant-based or cultivated alternatives. But of course, even a plant-based diet has carbon emissions associated with it, from the fertilizer and pesticides applied in the production process, to its transport to end markets. Plant-based products and diets are also not always affordable or accessible to certain demographics who may live in food deserts.
Indoor agriculture has long been a potential solution to food deserts and many of the carbon emissions related to crop production, making it an interesting prospect for city planners and city-based corporates. But the energy consumption associated with the production system, specifically related to lighting and climate control systems, has left much to be desired; not least because the costs involved have stunted the growth of viable business models.
Further, energy demand from these indoor farms is only set to increase as the need for more localized production in certain regions across the world has been highlighted during the Covid-19’s disruption of traditional supply chains; Singapore is a case in point.
“With over 8.6 terrawatt hours of energy consumed by horticultural lighting systems in emerging indoor farms and greenhouses in the US in 2019, utility companies are hard-pressed for rapidly scalable energy management tools that meet the needs of growers,” says Eric Eisele, CEO of GrowFlux. GrowFlux is an agtech startup focused on smart lighting controls for the horticulture industry working to significantly reduce the cost of lighting automation and its energy needs.
GrowFlux, a Philadelphia-based startup, was therefore immediately of interest to Exelon, the nuclear energy provider that claims to have the largest number of electricity and natural gas customers in the US after it launched a new startup incubator late last year aimed at reducing greenhouse gas emissions and bolstering urban centers. GrowFlux is part of the first cohort of Exelon’s $20 million Climate Change Investment Initiative (2c2i) and recently received $100,000 in cash as well as in-kind services such as legal and advisory as part of the program.
“When we think about food & ag, we think about there being a mitigation and adaptation benefit from helping to advance the indoor ag industry for food. [By growing food close to city centers] there’s a climate change mitigation benefit from the decreased emissions related to traditional, carbon-intensive farming methods of harvesting, planting and transporting food from rural areas to cities,” Exelon Corp SVP Chris Gould told AFN. Indoor ag, where farming environments can be completely controlled, is also a good mechanism to adapt to climate change, he added.
“GrowFlux specifically can increase yields in indoor farming making it more economical for city centers and where it can serve often underserved communities fresh and healthier foods.”
GrowFlux says its technology allows even the smallest farms and upstarts to build advanced controlled environment agriculture automation without millions in venture funding. Its approach is different from the traditional high-level objective of optimizing climate control towards a constant set point; instead it aims to respond more dynamically to crops’ needs via distributed sensor data and cultivar specific crop models. “Crop responsive environmental controls have the potential to result in tremendous resource efficiency, creating opportunities to grow new crops in greenhouses, reducing the operating cost of existing CEA, and reducing the capital costs associated with CEA,” reads the company website.
“We reduce cost with cloud-based control (as opposed to cloud-connected control), which is new to the industry. This strategy is unique from our competition, which are essentially boutique engineering firms that do a full range of automation services using on-site controls that are slow to scale and come at a significantly higher cost,” added Eisele.
2c2i is a partnership between Exelon and its foundation and involves $10 million in funding from the foundation and $10 million in-kind contribution of pro-bono services from the corporation, such as mentorship and access to the company’s venture capital and R&D departments.
“Our partnership with Exelon Foundation will help GrowFlux advance its energy savings and energy management solutions, and allow our customers to drive down their operating costs and carbon footprint associated with greenhouse and indoor agriculture,” said Eisele about the investment. “We believe their guidance on energy management strategy is just as valuable, if not more valuable than the cash.”
2c2i is focused on innovations that will positively impact the cities in which Exelon operates, including Atlantic City, Chicago, Baltimore, Philadelphia, Washington, D.C., and Wilmington. Innovations must also have the potential to mitigate greenhouse gas emissions; boost the resiliency of urban infrastructure (e.g., the power grid, transportation systems, buildings, vacant land) against flood, stormwater, and rising temperatures; help cities, businesses and communities adapt to climate change; or help achieve a state or city’s specific sustainability and climate goals. External consultant Freshwater Advisors selected a shortlist to pitch in front of the Exelon team.
“We also consider and have selected startups from outside of our cities, but in that regard we ask them to have a line of sight on one of our cities, with hope of attracting them to region to set up an office,” said Gould.