(Bloomberg) -- Indoor-farming company Gotham Greens raised more than $310 million from investors in its latest funding round, the company said Monday.
The Series E round was led by new investors BMO Impact Investment Fund, a sustainability-focused investment fund of Bank of Montreal, and Ares Management funds. Other fresh investors include Commonfund Capital Inc., RockCreek and Kimco Realty Corp., and existing investors such as Manna Tree Partners and Silverman Group also joined. The round, which includes both equity and debt funding, brings the greenhouse grower’s total capital raised to $440 million.
Gotham Greens, a New York-based seller of hydroponically grown salad greens and herbs as well as dressings and cooking sauces, also recently acquired FresH2O Growers Inc., a Stevensburg, Virginia-based grower with a 540,000-square-foot greenhouse that sells salad products in supermarkets in the Mid-Atlantic region, the company said. The funding will finance the construction of greenhouses the company is building in Texas, Georgia and Colorado; expansions of current facilities in Chicago and Providence, Rhode Island; and more projects and acquisitions across the country. With the acquisition and new facilities, the company predicts that its annual production capacity will reach about 100 million heads of lettuce a year, tripling its volume.
“Now we have nine operating facilities across the country,” Chief Executive Officer Viraj Puri said. The funding and acquisition together “puts us near national reach.”
Novel farming operations raised significant funds in 2021. The largest raise went to vertical-farming company Bowery Farming Inc., according to a report from investor and researcher AgFunder. It brought in $300 million in investment in May last year.
As with other companies growing leafy greens indoors, Gotham Greens’ operations allow it much greater control than conventional field growing, using 95% less water and 97% less land, according to the company. By farming close to destination markets and not in far-flung states — an early Gotham Greens greenhouse sits atop a Brooklyn Whole Foods Market — indoor farms also reduce the number of miles their products travel to supermarket shelves. Gotham Greens has an advantage over its vertical-farming competitors: Its greenhouses use significantly less energy because they rely mostly on sunlight rather than artificial lighting. Nearly all of the energy they do use comes from renewable sources, Puri said.
“When I look at companies like Gotham Greens,” said Henry Gordon-Smith, the founder of Agritecture, a farm-tech consulting firm, “they’ve been able to take advantage of the reduced costs and compete in the market and just have a better pathway to profitability — and a lower carbon footprint.”
While food inflation could steer customers away from Gotham Greens’ sometimes-pricier offerings, Puri said that overall, the company was seeing plenty of growth. Its leafy-greens sales are up 26% in the last year.
Gotham Greens’ products are sold at more than 3,000 US supermarkets, including locations of Amazon.com Inc.’s Whole Foods, Kroger Co. and Sprouts Farmers Market Inc.
(Updates with additional detail on FresH20 greenhouse. An earlier version corrected FresH2O’s location and a photo credit.)
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