Gotham Greens, a Certified B Corporation™ and New York-based indoor farm, has raised more than $310 million in new capital, bringing the fast-growing company’s total financing to $440 million since its founding in 2009. The funding round also constitutes the second-largest funding round banked by an indoor farming company since the start of the year and Plenty’s USD 400 million funding round, the round also exceeds the USD 300 million funding round banked by Little Leaf Farm a couple of months ago
The latest fundraising round, the company’s largest to date, includes equity and debt funding led by new investors BMO Impact Investment Fund (IIF), a sustainability-focused investment fund of the Bank of Montreal (BMO) (NYSE: BMO), and Ares Management funds (Ares). The Series E round was joined by additional new investors, including Commonfund, RockCreek and Kimco Realty Corporation (NYSE: KIM), along with key existing investors, including Manna Tree Partners and The Silverman Group.
As a leading organization in the indoor farming and plant-based fresh food categories, Gotham Greens plans to use the funding to “accelerate its mission to decentralize agricultural production and bring more greenhouse-grown produce and fresh, plant-based foods to people across the United States through channel and geographic market expansion, increased operational capacity and new product development” as per the company’s most recent press release. The company’s product portfolio includes greenhouse-grown leafy greens and herbs, along with a line of refrigerated salad dressings, dips and cooking sauces.
This Series E capital raise will support Gotham Greens’ new greenhouse projects currently under construction in Seagoville, Texas (near Dallas), Monroe, Ga. (near Atlanta) and Windsor, Colo. (near Denver), the expansion of its existing greenhouses in Chicago and Providence, R.I., as well as future projects and acquisitions in other regions across the U.S.
By 2023, Gotham Greens is set to own and operate 13 high-tech, climate-controlled hydroponic greenhouses, totalling more than 40 acres (1.8 million square feet) across nine states. The greenhouse expansion projects join Gotham Greens’ existing greenhouse farms in New York, Rhode Island, Maryland, Illinois, Colorado and California. The new greenhouses will enable Gotham Greens to continue serving many of the country’s largest grocery retailers, which continue to see a steady increase in consumer demand for greenhouse-grown produce.
“Gotham Greens was founded with a vision to advance indoor farming and sustainably grow high-quality leafy greens in cities across America every day of the year. Today, our ambitions and footprint are outgrowing our roots in the best way, and we’re humbled to receive this funding from new and existing investors to continue our national expansion in order to reach our goal of delivering Gotham Greens fresh produce within a day’s drive from our greenhouses to 90% of consumers across the U.S.,” said Viraj Puri, Co-Founder and CEO of Gotham Greens. “With increasing climate and supply chain related issues facing our food system, it’s more important than ever to bring innovative farming solutions that grow high-quality produce while using fewer precious natural resources. Gotham Greens is growing fast, and we look forward to bringing our brand to new markets in the coming months.”
Gotham Greens also recently completed the acquisition of FresH2O Growers, Inc., a 540,000 square foot hydroponic greenhouse grower in Stevensburg, Va. (50 miles southwest of Washington, D.C.). FresH2O leafy green salad products are sold in grocery stores across the Mid-Atlantic region.
“We are proud to pass the torch of the greenhouse facility and business to Gotham Greens, our trusted friends and industry partners. We have admired Gotham Greens’ outstanding track record of success in the industry and being exceptional growers, and there was no better choice in the CEA industry to continue what we built in Virginia,” said Joe Van Wingerden, former owner of FresH2O Growers, Inc. “Gotham Greens and FresH2O shared a desire to advance greenhouse agriculture and to bring more fresh, local and sustainably grown produce to consumers across the country, and we are confident they will continue to service our customers with high-quality, longer lasting leafy greens and other exciting innovations in the years to come.”
A recent Nielsen Total US xAOC study demonstrated that the company achieved a 26% year-over-year growth in the leafy greens category alone (compared to 3% and 2% YoY growth for conventional and organic sectors, respectively). Driven by strategic expansion, both national and regional retail partnerships continue to grow with key accounts, including Whole Foods Market, The Kroger Co., Albertsons, Sprouts Farmers Market, The Fresh Market, AmazonFresh, FreshDirect and more. Gotham Greens products are available in more than 3,000 grocery stores nationwide.
“The Gotham Greens management team has a demonstrated track record of successful execution, having developed a distributed network of greenhouse facilities with near national reach while producing positive facility level unit economics, a key differentiator in the indoor farming space,” said Marc Khouzami, Managing Director, BMO Impact Investment Fund. “BMO IIF is excited to be partnering with Gotham Greens on the next stage of the company’s growth, as they continue to expand their market share and solidify their position as a leading indoor farming operator.”
“Ares is excited to support Gotham Greens’ plans to expand its leadership within the fast-growing controlled environment agriculture sector,” said Mike Roth, Partner in the Ares Infrastructure Opportunities strategy. “Through its innovative approach to food production, Gotham Greens has built a resilient business model that also drives positive environmental and social impact within its communities. We look forward to collaborating with the Gotham Greens team as we continue to advance our commitment to support sustainable climate infrastructure while seeking to deliver attractive returns for our investors.”
Gotham Greens is purposefully expanding its operations to provide sustainable supply chain solutions to its diverse retail and foodservice customers. The Colorado River is rapidly drying, creating a water crisis in seven states, including California and Arizona, which collectively provide 98% of leafy greens grown in the United States. In California, where Gotham Greens recently opened a greenhouse in 2021, more than 37 million people are affected by drought with 87% of the state classified as Severe or Extreme Drought. By using hydroponic growing systems in renewable electricity-powered greenhouses, Gotham Greens’ farms use up to 95% less water and 97% less land compared to conventional farming. The proximity of Gotham Greens’ greenhouses to key metropolitan markets also eliminates the need for long-distance refrigerated transportation while improving product quality and shelf life, and ultimately reducing food waste.