- Leaps by Bayer, the investment arm of Germany's health and agriculture giant Bayer, and Temasek, a global investment company, are forming and investing in a new venture called Unfold, the companies said in a statement.
- The companies said most startups in the vertical farming market focus on the development of more efficient infrastructure, but Unfold will tap into the genetic potential of vertical farming to create new seeds and agronomic advice tailored for the indoor environment of vertical farms.
- Unfold raised $30 million in the initial funding round and entered into an agreement for certain rights to germplasm — or genetic material such as a seed —from Bayer’s vegetable portfolio.
In recent years, the food and agricultural industries have been inundated by discussions over climate change and the prospects of a global population that could reach nearly 10 billion by 2050, creating the need to grow more food. At the same time, some consumers have placed more attention and altered their shopping habits to prioritize items that are more sustainable and have a smaller environmental footprint.
The convergence of these factors has created momentum to produce more food with less, making technologies such as vertical farming more enticing.
Vertical farming, which eschews sweeping fields for buildings, labs or recycled shipping containers, not only produces more in a smaller space, it uses substantially less water than traditional farming and enables hyper-local produce distribution. It also reduces dependency on chemicals and other crop inputs and allows food growth in challenging environments that may not otherwise be conducive for agriculture.
These attributes are a big reason why more high-profile companies have entered the space. Food distributor Gordon Food Service and indoor farming startup Square Roots opened their first co-located farm at Gordon's headquarters last fall. Earlier in 2019, vertical farming operation AeroFarms raised $100 million in its latest funding round, bringing its total funding to $238 million. Even retail giant Target dabbled with in-store vertical farming starting four years ago. And while its not vertical farming, AppHarvest recently raised $28 million and added Martha Stewart and Impossible Foods' CFO David Lee to its board. The company's 2.76 million square-foot greenhouse is scheduled to open this fall.
As Bayer noted in its release, much of the focus is on how to make vertical farming more efficient. Better technology within these operations is vital toward lowering the cost and making it a more attractive option for businesses while increasing the amount of produce they can generate. But not to be forgotten are the seeds that are used to grow the crops. Unfold will be lead by John Purcell, who previously oversaw Bayer's vegetables research and development.
In a blog post, Purcell not only discussed the promise of vertical farming but why it is still an immature industry.
"While vertical farming has tremendous potential, it has lacked the power of seeds and digital solutions developed specifically for this sector," Purcell said. "Enter Unfold, which offers a unique value proposition to unlock the true potential for vertical farms/farmers, the retail industry, and consumers."
Bayer is no doubt committed to its traditional seed and chemical business, but the prospects of vertical farming — in much the same way traditional meat companies have entered the plant-based segment with their own offerings as the sector has increased in popularity — is an area the German-based company sees as a potential pathway for growth.
With decades of insight and technological experience creating seeds for conventional agricultural producers, Bayer has a wealth of knowledge it can bring to vertical farming. By tapping into its intellectual property and investing a few million dollars in the operation, Bayer is positioning itself to reap the benefits as the platform expands and gets adopted by more businesses around the world.