December 17, 2018

High tech, indoor, ‘post organic’ vertical farming startup Bowery Farming announced it has 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.

Founded three years ago in Kearny, New Jersey, by Irving Fain, David Golden, and Brian Falther, Bowery Farming uses advances in LED technology, robotics, and data management to make intensive, indoor agriculture more viable than ever. Within their operation, software and hardware work together to integrate levels of automation into indoor agricultural production systems, eliminating human labor and allowing for urban vertical farming to operate at scale.

Bowery’s proprietary, fully-integrated software system uses vision technology and machine learning to monitor crops around the clock while collecting data that can drive actionable insight. By controlling the production process from germination to harvest, Bowery is able to produce non-GMO leafy greens and herbs 365 days a year, using zero pesticides and 95 percent less water, and at a rate that is 100 times more productive than traditional agriculture. Additionally, because indoor facilities can be located in urban settings, Bowery’s produce can be delivered to retail stores and restaurants within one day of harvest compared to weeks from remote fields.

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. Meanwhile, in the next 30 years, we will have to produce more food than has been produced in the last 10,000 years.

Furthermore, traditional agriculture accounts for the use of 70 percent of all the available global water supply, and the U.S. alone uses over 700 million pounds of pesticides per year – all factors that Bowery feels its indoor model can alleviate. And it would seem that investors are also gaining confidence in the production model as so far in 2018, indoor ag investments totaled $146 million across 29 deals, according to the 2018 Agtech Investment Review recently released by Finistere.

Three Main Areas

In May of 2017 the company announced a $20 million Series A co-led by General Catalyst and GGV Capital, and including GV, First Round Capital, as well as other seed round investors. With this funding in pocket, Bowery expanded, launching a second New Jersey indoor farm that is 30 times larger than its first, and grew its team from eight to more than 65.

Despite these achievements, Bowery says that the company has a lot of work yet to accomplish. The funding from this latest round will be used across three main areas: building out its operations, expanding its product lines and partnerships, and further expanding its team.

The company has already begun the development of its first farm outside of the Tri-State area, and has a target of launching multiple farms in the coming year, establishing a global network of farms that are connected to each other through the company’s proprietary computer system, BoweryOS.

“What is great about this model is that we are able to build our farms in any city,” Fain told Inc. in 2017. “Our goal is to locate these farms in a way to provide the highest quality food to cities where it has traveled a very short period of time compared to the traditional agriculture supply chain where it can be two to three weeks from when our food is picked to when it reaches us.”

The high level of transparency and lack of pesticide usage with Bowery’s produce has generated strong retail and consumer demand. Since its initial partnership with Whole Foods, Bowery has since added agreements with sweetgreen – a chain of farm-to-table salad bowl locations, and Dig Inn – a chain of restaurants in New York and Boston that focus on locally grown and sourced ingredients. Moving into 2019, Bowery plans to continue adding to the types of produce it offers, and to forge new distribution partnerships with retail, food service, and restaurants.

“What we can deliver is local, pesticide-free produce year-round. But the other thing that we can do, which is becoming increasingly more important, is we can deliver a level of transparency but also food safety that is isn’t possible from the traditional supply chain,” Fain told Project Nosh. “The breadth of opportunity is immense.”

-Lynda Kiernan