Plenty blooms with $400M as vertical farming startups address food shortages

Indoor farming startups are building ever-bigger facilities and partnering with retailers to achieve economies of scale as the ongoing pandemic and recent climate catastrophes threaten to worsen existing food shortages.

Plenty, an operator of indoor vertical farms, announced Tuesday that it has teamed up with Walmart to provide leafy greens to all of the retail giant’s California stores beginning later this year.

Bay Area-based Plenty also revealed that it has raised $400 million in Series E funding co-led by One Madison Group and JS Capital, with Walmart and existing investor SoftBank also participating in the round. The capital will be used in part to sell multi-crop farms directly to partners.

“The way we can grow our business really substantially and help retailers and supply chain partners … is to actually offer them the option of owning farms,” said Plenty CEO Arama Kukutai.

The next wave of fresh produce offered by vertical farms will be distributed by grocers who realize that pesticide-free products with a better shelf life are also good for their business, he said.

The reliability of supply seems to be a key value proposition of indoor farms because they shorten the supply chain and bring produce closer to consumers, said Alex Frederick, an emerging tech analyst at PitchBook.

“Sellers are really concerned about where certainty of supply is going to come over the next 20-plus years,” said Kukutai.
 

 

Venture capital is flowing into indoor farming at a torrid pace, with investors capitalizing on the potential demand for fresh produce throughout the year. In 2021, indoor farming startups raised more than $1.6 billion globally across 70 deals, roughly 86% more than the total capital raised in 2020, according to PitchBook data.

Notable startups in the space include Bowery Farming, the New York-based vertical farming company that provides produce to Albertsons, Walmart, Whole Foods and other grocers. The company was valued at $2.3 billion in August, according to PitchBook data.

Another in the sector is Berlin-based urban farming company Infarm. In December, the company raised $200 million from investors including Qatar Investment Authority and Atomico.
 

Featured image courtesy of Plenty