- Gotham Greens, which operates high-tech greenhouses, raised $87 million in equity and debt capital, according to a release. The capital raise includes Gotham Greens' recent Series D round led by Manna Tree. Gotham Greens so far has raised a total of $130 million.
- The hydroponic leafy greens producer said it plans to use the latest funding to decentralize food production and bring fresh offerings to more people across the U.S., increase output at its current greenhouses and develop new products.
- The indoor greenhouse segment has been among the fastest-growing segments in food this year and has been a popular avenue for investors looking for a return on their money. So far this year, BrightFarms raised $100 million, Revol Greens raised $68 million, AppHarvest raised money and announced plans to go public and Plenty Unlimited received $140 million in funds.
As consumers look to eat healthier, the indoor greenhouse space has attracted plenty of green in 2020. Since August, the indoor agriculture space has raised more than $1 billion, according to Gotham Greens.
The New York company, which has more than 500,000 square feet of greenhouses in five states, has doubled its revenue in the past year. Unit sales at retailers have risen 80% year over year and the company has added more than 1,000 new points to sell its products since January. The company's products are sold in more than 40 states.
Indoor greenhouses offer plenty of advantages compared to their outdoor counterparts that make them attractive to consumers and retailers. Among them, they can grow and harvest produce all year round, including in areas of the country with a shorter growing season. They also raise crops with less soil and water and can eschew chemicals. In addition, the greenhouses can be situated close to where the products will eventually be sold — enabling the food to be fresher when it arrives and curtailing transportation costs and emissions.
For example, AppHarvest said its 2.76 million square-foot-facility in Kentucky will eventually supply produce to about 70% of the U.S. population in one day's drive. Gotham Greens, which has greenhouses in New York, Rhode Island, Maryland, Colorado and Illinois, plans to use some of the money it is raising to boost its geographic expansion. This includes adding markets in the West and South, as well as new facilities on the East Coast.
Even before the pandemic, consumers were eating more produce and flocking to plant-based meat as they looked to practice conscious eating. According to ADM, 18% of U.S. consumers bought their first plant-based protein products during the pandemic. And almost all of them — 92% — say they will continue buying these products. Beneo, a supplier of functional ingredients, estimated almost 75% of consumers globally plan to eat and drink healthier as a result of the pandemic.
"The pandemic has revealed flaws in America’s food supply-chain system, particularly in the produce category, and new leaders and innovators need to emerge to ensure a stable food supply for the future," Brent Drever, co-founder and president of Manna Tree, said in a statement.
Consumer demand for produce and the sustainability concerns around growing, harvesting, packing, shipping and selling are unlikely to abate anytime soon. The use of large greenhouses to provide tomatoes, lettuce and other produce is still in its infancy, and they supply only a small fraction of the market. However, their operators plan to play a bigger role in the food ecosystem. It's a big reason why investors haven't been shy about giving these upstarts large sums of money or high valuations — AppHarvest is set to go public worth about $1 billion.