Gotham Greens, an indoor farming startup, has raised $87 million in new funding to continue its expansion of high-tech greenhouses across the U.S.
The capital raise comes as the indoor agriculture space has seen a series of high-profile deals in recent months, including vertical farming giant Plenty raising $140 million in Series D financing and the purchase of AppHarvest by a SPAC that was expected to generate $475 million in proceeds.
Viraj Puri, co-founder and CEO of Gotham Greens, said the sector is well-positioned to grow amid climate-related challenges and other supply chain issues.
"Because we're in this highly-controlled environment, we're not reliant on outdoor weather conditions, so adverse rain, snow, hail, drought, things like that would not affect us being in a greenhouse," he said.
He said that the company's method of indoor farming can grow 95 percent more food on an acre of land while using water 95 percent more efficiently than outdoor agriculture. The latter is especially important as concerns mount over water scarcity worldwide.
"As water becomes a more scarce resource globally, we believe this form of farming is going to play a much more compelling role," Puri said.
The new capital will mostly support physical expansion. The company currently operates greenhouses in five states and has distribution in around 40 states. In addition to expanding operational capacity at existing facilities, diversifying channels, and launching new products, the money will support the construction of new "souped-up greenhouses," according to Puri.
Increasing the size of its physical footprint is key to Gotham Green's mission of creating a decentralized agriculture system, which Puri said can gain an advantage over traditional agriculture by growing closer to markets and shortening transportation times.
"Traditionally most fresh produce in this country is grown in a few counties in California and then has to be shipped across the country," he said. "Our concept has been to decentralize that supply chain by building high-tech, climate-controlled greenhouse facilities that enable us to grow consistent, reliable yields of fresh produce year-round."
Even with its technical advantages, indoor farming still only represents a small fraction of agricultural output. Leafy greens, for instance, are a $15 billion category in the U.S. and Canada, but currently, just about 1 percent are grown in indoor facilities.
"Really this funding is to accelerate that mission to continue to build greenhouses around the U.S.," Puri said.