January 7, 2019

Canada-based agtech startup INNO-3B announced it has raised C$6 million (US$4.5 million) in seed funding through a round led by Ecofuel Fund. Additional backers include Desjardins Capital, the Fonds de Solidarité FTQ, Premier Tech, Fonds de Solidarité FTQ Bas Saint-Laurent, and Investissement Québec and the Ministère de l’Économie et de l’Innovation.

Headquartered in Quebec and Ontario, INNO-3B designs and manufactures innovative robotic solution platforms for the indoor vertical production of high-density crops. The company offers fully automated, scalable, remotely monitored, and controlled growing systems that can reduce greenhouse gas emissions generated from vertical agriculture. Its systems can be established in any location, whether it be urban or rural, and the company also offers deep agronomic knowledge and support through its in-house agronomic expertise.

“The innovative technology developed by INNO-3B can produce vegetables with low production costs, high yields and low energy consumption in a small space. Innovation makes it possible to respond to growing needs of consumers for fresh quality products while reducing greenhouse gases greenhouse significantly” says Richard Cloutier, president and CEO of the Ecofuel Accelerator, and managing partner of the Ecofuel Fund.

The funds will be used by INNO-3B to “implement a demonstration of its technology in the context of real time operations”, which is expected to accelerate the marketing momentum of its solutions, and to ensure constant support for its customers.

“We are enthusiastic to start this new phase of development while we have strategic investors dedicated to our success and which allow us to accelerate our growth. The Ecofuel Fund, Desjardins Capital and the Fonds de solidarité FTQ, in particular are actively supporting our growth,” said Martin Brault, president and CEO of INNO-3B.

It was not too long ago that vertical farming was viewed as not being an investable asset class. However, since 1982, 24 million acres of U.S. farmland have been lost to development, and the loss continues at a rate of 40 acres of farm and ranch land every hour, according to the American Farmland Trust. More specifically, the California Climate & Agriculture Network states that California, one of the top-producing agricultural states in the country, has lost an average of 50,000 acres of farmland each year for the past 30 years due to urbanization and development.

It is the ability of indoor farming to meet and alleviate these challenges that is driving the market to be expected to exceed a value of US$6 billion by 2022. And as the industry scales up and proves out how it can answer multiple challenges from traditional long transport systems, to food waste, to water conservation, to food contamination, to growing food in urban food deserts, so have the funding rounds.

Among the most prominent and high-profile rounds happened in July of 2017 when San Francisco-based indoor vertical farming startup Plenty  raised a $200 million Series B led by SoftBank Vision Fund – the $93 billion all-stage tech fund headed by Japanese billionaire Masayoshi Son.  Other participants in the round include affiliates of Louis M. Bacon, the founder of Moore Capital Management, and existing investors Eric Schmidt’s Innovation Endeavors, Finistere, DCM, Data Collective, and Bezos Expeditions.

More recently, in December of 2018, high-tech, indoor, ‘post organic’ vertical farming startup Bowery Farming announced it had raised $90 million through a financing round led by Alphabet Inc.’s GV,  and including Temasek, Almanac Ventures, General Catalyst, GGV Capital, First Round Capital, and a number of returning seed investors.

Indeed, as the asset class matures, funding is not only being committed to vertical growers, but to ancillary manufacturers and suppliers to the industry.

“Thanks to the technological advances made in recent years, we have managed to position ourselves among the leaders in automated vertical farming,” said Martin Brault, president of INNO-3B. “In order to offer our customers a cutting-edge product we are exploring the most interesting synergies with artificial intelligence (AI).”

-Lynda Kiernan