Major Investors Fund Vertical Farming Start-ups
Photo by Markus Spiske
Earlier this month, vertical farming start-up Bowery Farming, Inc. (based in New York City) raised $50 million from Temasek Holdings (owned by the Government of Singapore), and Henry Kravis (co-founder and CEO of Kohlberg Kravis Roberts & Co.)
Total funding is about $172.5 million, with other investors including GV (formerly Google Ventures), restaurateur David Barber’s Almanac Insights, and Uber Technologies CEO Dara Khosrowshahi.
Funds will be used to: 1) build out the firm's facilities in Kearny, NJ and Baltimore, MD and 2) continue the development of Bowery OS - which uses a mix of computer vision, machine learning and process automation technology to manage the plant production process.
The company believes that “Because we control the entire process from seed to store, Bowery farms use zero pesticides, 95 percent less water, and are 100+ times more productive on the same footprint of land than traditional agriculture."
Other notable vertical farming operators include:
AeroFarms (based in Newark, NJ), backed by Ingka Group (parent company of retailer Ikea), Wheatsheaf, ADM Capital, Mission Point Capital, GSR Ventures and AllianceBernstein. Total funding is over $230 million.
Plenty (based in South San Francisco, CA) backed by SoftBank, Eric Schmidt (through Innovation Endeavors), Jeff Bezos (through Bezos Expeditions), DCM Ventures; Data Collective, Finistere Ventures and Louis Bacon. Total funding is $226 million.
OUR TAKE
As environmental conditions become more variable and interest in urban farming increase, vertical farms have the potential to: 1) increase year-round production, 2) reduce the variability of traditional food production, 3) minimize water requirements and 4) introduce farm production in abandoned and underutilized properties.
Risks associated with vertical farming include: 1) high costs associated with LED lighting, ventilation and water circulation, 2) high real estate costs in urban locations and 3) developing a better agricultural sensibility among data scientists building vertical farming platforms.
There will be many advances in agricultural science (plant/cell-based meats, plant genome, CRISPR, etc.) and food production technologies (automation, computer vision, indoor/vertical production, etc.) that should increase availability of more affordable and sustainable food offerings.