BrightFarms and Plenty Ag’s new farms were just one of the bright spots in a busy September for CEA.  We also saw several decent fundraises in the private sector and a wave of corporate activity in the public sector.

1. A rebound in private funding

Private funding reignited in September, with four significant fundraises.  One notable trend is the switch from mostly equity funding to cheaper debt funding:

80 Acres Farms

80 Acres Farms, the largest vertical farming company in Greater Cincinnati, has secured $140 million in public bonds from Boone County to expand its facility near Florence, Kentucky. The bonds will fund the addition of another “grow zone” to the company’s existing 200,000-square-foot facility, increasing its footprint by 60,000 square feet and creating 35 new jobs. The Boone County Fiscal Court approved the Industrial Revenue Bonds to cover various project costs, including installation, equipment, and construction. The bond issuance is capped at $140 million, while the actual project cost is estimated at $20-25 million. This expansion follows 80 Acres’ $95 million investment in 2022 to transform a vacant building into what is now their largest vertical farm, where they use hydroponics to grow greens, basil, microgreens, and other produce year-round. 

James Hutton Institute

The James Hutton Institute, a scientific research organization in Scotland, has secured $3.19 million (£2.4 million) in funding for three innovative horticultural projects. The funding includes $405,419 (£305,000) for light pulsing technologies in vertical farming and $747,035 (£562,000) for developing genetic tools for indoor-grown lettuce. An additional $465,235 (£350,000) from the Biotechnology and Biological Sciences Research Council will support medicinal cannabis research. Industry partners contributed $1.62 million (£1.22 million) to the total funding. These multi-year projects aim to transform horticultural practices and advance breeding techniques. The research focuses on creating ‘super-lettuce’ for urban environments, revolutionizing vertical herb cultivation, and standardizing medicinal cannabis production. 

Pairwise

Pairwise, a gene editing company focused on improving plant breeding, has secured $40 million in Series C funding. Led by Deerfield Management, the round saw participation from returning investors Aliment Capital and Leaps by Bayer, as well as new investor Corteva, Inc. through its Corteva Catalyst platform. This investment brings Pairwise’s total funding to $155 million. It will be used to scale its product pipeline, including seedless berries and pitless cherries, and advance its Fulcrum™ Platform. The funding underscores the growing importance of gene editing in agriculture and positions Pairwise to continue its mission of building a healthier world through better fruits and vegetables.

Vision Greens

Vision Greens, a vertical farming company based in Welland, Ontario, has secured $18 million in its second capital raise. The funding consists of $10 million in equity and $8 million in debt capital. The Dorchester Corporation and Farm Credit Canada provided the debt financing. Vision Greens will use the investment to expand its operations. The company aims to grow an additional 1 million pounds of lettuce annually. Vision Greens produces pesticide-free, locally grown lettuce using patented technology. The company currently supplies its products to Metro and Food Basics stores across Ontario. It also serves foodservice accounts like Sysco and Bondi. Vision Greens expects its new growing operation to be online by mid-2025. The expansion will allow the company to distribute its greens across Canada.

2. BrightFarms & Plenty inaugurate new farms

Our Indoor Ag Buzz Index™ combines the popularity of a range of indoor farm-related phrases in the media into an index.   The index was again down by month end, albeit not by much.

New Farm Openings

There were two long-awaited farm openings in September, from industry majors BrightFarms and Plenty:  

• BrightFarms, a greenhouse leafy greens grower, has opened a new greenhouse hub in Yorkville, Illinois, part of the Chicago Metropolitan area. This 8-acre facility is the first of three new regional greenhouse hubs opening in 2024. The Yorkville greenhouse uses KUBO’s Ultra-Clima technology to maintain growing conditions year-round. It’s part of BrightFarms’ expansion plan to serve more than two-thirds of the U.S. population and generate over $300 million in revenue by 2026. The company, acquired by Cox Enterprises in 2021, is constructing additional hubs in Macon, Georgia, and Lorena, Texas, set to be completed by the end of the year. Once fully operational, these three new greenhouses will increase BrightFarms’ growing capacity, adding nearly 100 acres to their operations.
• Plenty, a vertical farming company, has opened an indoor strawberry farm in Richmond, Virginia. The 40,000-square-foot facility, named Plenty Richmond Farm, is designed to produce more than 4 million pounds of Driscoll’s strawberries annually using 30-foot-tall towers. Set to begin operations in late 2024, with the first strawberries expected to hit the market in early 2025, this farm utilizes Plenty’s proprietary vertical farming technology to grow berries year-round. The project is part of Plenty’s 120-acre farm campus, which is projected to cost $300 million when fully built.  The company also announced that it will expand its Wyoming research facility.

Corporate Moves

Elsewhere, we saw several corporate moves:

• FarmBox Foods LLC, a Colorado-based company, has announced a partnership with New A.G.E., a technology company. The collaboration aims to place 450 container farms in strategic locations worldwide over the next six years. These 320-square-foot hydroponic units will produce approximately 100 million servings of food for underserved communities. FarmBox Foods’ container farms operate on low power and limited water, growing a variety of nutrient-rich produce. The company has successfully tested over 80 different plant types in these units. New A.G.E. plans to incorporate these farms into “agrihoods,” creating farm-to-table communities that offer residential living.
• LettUs Grow, a UK-based aeroponic technology company, has announced a strategic spinout of its software platform, Ostara. The move aims to sharpen LettUs Grow’s focus on scaling its aeroponic technology globally. Ostara, developed by LettUs Grow, is now an independent entity in the agritech sector. The software platform has been used in over 30 controlled environment agriculture projects since 2015. It manages crucial aspects of crop life, including lighting, irrigation, and environmental controls. Ostara’s leadership team secured investment from Bethnal Green Ventures to enable this spinout. The platform targets the polytunnel sector, addressing climate management challenges in covered horticulture. Ostara’s solution automates manual tasks and provides insights to optimize growing operations. It integrates with existing systems or new installations, offering unified environmental control and data analysis.

An Encouraging Study

Finally, a recent study by Cornell University has found that integrating artificial intelligence into indoor farming operations could reduce energy consumption by 25%. The research, published in Nature Food, analyzed lettuce cultivation in indoor facilities across diverse locations. By using AI techniques like deep reinforcement learning, the study optimized lighting and climate regulation systems. Energy use dropped from 9.5 to 6.42 kilowatt-hours per kilogram of fresh lettuce weight in most locations. In warmer areas, AI reduced energy usage from 10.5 to 7.26 kilowatt-hours per kilogram. The researchers found that low ventilation during light periods and high ventilation during dark periods provided an energy-efficient solution. 

3. Acquisitions and capital structure moves in the listed sector 

Our proprietary Indoor Ag Stock Index™ ended the month down 8%  year on year.  The index also significantly underperformed NASDAQ during the period.  

Freight Farms

Agrinam Acquisition Corporation and Freight Farms, Inc. have mutually agreed to terminate their previously announced business combination agreement. The agreement, initially signed on October 3, 2023, had undergone several amendments throughout 2024. Agrinam, a special purpose acquisition company, is now actively seeking alternative qualifying acquisitions before its December 15, 2024 deadline. Freight Farms, based in Boston, is a leader in container farming technology, manufacturing hydroponic systems inside shipping containers. The proposed deal had valued the combined entity at approximately $147 million. Prior to the termination, Agrinam had already committed $4 million to Freight Farms as part of a targeted $20 million investment from sponsors and strategic investors.

Edible Garden

Edible Garden AG Incorporated (Nasdaq: EDBL), a greenhouse grower, has announced the closing of a $5.65 million public offering. The offering included 15,700,650 shares of common stock (or pre-funded warrants) and accompanying Class A and Class B warrants to purchase additional shares. The combined public offering price was set at $0.36 per share (or $0.35 per pre-funded warrant) with accompanying warrants. For each share or pre-funded warrant purchased, investors received one Class A warrant and one Class B warrant, both with an exercise price of $0.36 per share. Class A warrants expire in five years, while Class B warrants expire in 18 months. As of October 2, 2024, Edible Garden’s stock price stands at $0.2152.

Nature’s Miracle

Nature’s Miracle Holding Inc. (NASDAQ: NMHI), a vertical farming tech company, has announced a $2.1 million debt reduction agreement with Uninet Global Inc., a related party supplier. Under this agreement, Uninet Global will forgive $2.1 million of outstanding payables owed by Visiontech Group, Inc., a wholly-owned subsidiary of Nature’s Miracle. This leaves $577,500 remaining outstanding. The debt forgiveness will reduce liabilities by $2.1 million. James Li, Chairman and CEO of Nature’s Miracle, described the agreement as a vote of confidence in the company’s long-term trajectory. 

Sprout AI

Sprout AI Inc. shareholders have approved an amalgamation with TheraCann International Benchmark Corp. The vote, which required approval from a majority of minority shareholders, passed with 99.99% in favor. The resulting company, Beyond Farming, will trade on the Canadian Securities Exchange under the symbol BYFM. This merger combines Sprout AI’s cultivation hardware with OS2’s enterprise resource planning software and plant traceability technology. Beyond Farming’s facilities are designed to produce over 30 crop varieties using water-neutral and energy-efficient methods. The company plans to expand its operations internationally following this amalgamation.

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Featured image courtesy of Unsplash.

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