Bowery Farming

Vertical farming, the future of agriculture

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Video about Bowery Farming

Bowery Farming is the U.S. largest producer of leafy greens in vertical farms. Bowery farms operate 365 days a year and yield 100 times more than traditional farms, using 95% less water. The company's products are sold in 850 grocery stores including retail chains such as Giant Food, Stop and Shop, Walmart, etc.

Quick Overview

Website

https://boweryfarming.com

Products

Leafy greens production in vertical farms

Total funds raised

$472M

Last round

May 2021. Valuation $2.3B

Investors

Fidelity Management & Research Company LLC, GV (former Google Ventures), General Catalyst, GGV Capital, Temasek, Groupe Artémis, actress Natalie Portman, musician Justin Timberlake, Formula One racing driver Lewis Hamilton, basketball player Chris Paul

Business Growth Phase

Product

Bowery Farming was founded in 2015 and became a leader of the vertical farming segment in the US. Bowery farms are highly automated and run by proprietary sensors that track the level of humidity, nutrients, lighting and CO2. Also computer vision models are used.

The information obtained from the sensors and cameras is then analyzed by artificial intelligence algorithms to detect disease and optimize growing conditions for crops. Thus, Bowery Farming crops are grown practically without human involvement in the process.

The company doesn’t use any pesticides, which in the light of the growing trend towards healthy dietary, makes the companies products more attractive than vegetables and fruits produced by traditional or organic farmers, as they are forced to use chemicals to protect their crops from weather conditions and insects.

Traditional farms produce one to six crops a year. Bowery Farming's innovative farms yield over 100,000 crop cycles a year per farm.

Evolution

At the moment, the company grows salad, parsley, green sorrel, basil and other greens. Bowery Farming plans to expand production and grow tomatoes, root crops, strawberries, peppers and other crops in the near future.

The company has commercial farms in New Jersey and Maryland and a third, opened this year in Pennsylvania. Bowery Farming also has two R&D centers in New Jersey. Opened in 2021, Farm X became one of the largest and most technologically advanced R&D centers in vertical farming. The center will increase research capacity by 300%.

The Bowery Farming green leaf vegetables are sold in 850 grocery stores including retail chains Giant Food, Stop and Shop, Walmart, Weis, Whole Foods and others, as well as online venues such as Amazon Fresh. In comparison, Plenty, a Bowery Farming competitor, is present in 53 stores.

Market Opportunities

The vertical farm market is projected to reach $13B by 2026, at an annual growth rate of 22.3%. The US vertical farm market is highly fragmented. According to data for 2019, there are 2,000 vertical farms in the country, 61% of which are represented by small players, with the remaining share coming from a few large players: Bowery Farming, AeroFarms, Plenty, Freight Farms and Green Sense farms holdings.

Bowery Farming is a leader in the segment, and according to our estimates, its production and research capacity are twice as much as of AeroFarms, its closest rival.

The leafy greens market, where the company is operating so far, will reach $103B by 2023. According to the polls, 93% of buyers would prefer locally produced products if they were available. Bowery farming vision is to open farms locally, close to the consumer.

Team

Bowery Farming was founded by Irving Fain, a seasoned entrepreneur. He started his career as an investment banker for Citigroup, Fain co-founded and became CEO of CrowdTwist as well as managed the marketing strategy for iHeartMedia.

In February 2021, a new CTO, Injong Rhee, joined the company. Previously, he was vice president of Internet of Things at Google and chief technologist at Samsung Mobile. Rhee will work on improving computer vision systems and Bowery sensors that detect when plants need to be watered and supplied with nutrients.

Financials

In May 2021, the company raised $300M in the C series funding led by Fidelity Management & Research Co. This round became the largest private fundraise to date for an indoor farming company. The company was valued at $2.3B. Bowery plans to use the funding to open more farms in the U.S., look for new global expansion opportunities, cultivate new crops and technologies for growing strawberries, tomatoes, and carrots.

To date, Bowery Farming’s total raised is $472M from 32 investors, including celebrities like Natalie Portman, Justin Timberlake, Lewis Hamilton, Chris Paul, Dara Khosrowshahi (Uber CEO), and well-known funds like GV (the investment arm of Alphabet Inc.), General Catalyst and Temasek.

Bowery Farming doesn’t disclose its financial results but reports that it has experienced more than 750% retail growth in 2020 and more than 4X e-commerce sales growth.

The pandemic has led to the disruption in the supply chain globally and reduced availability of raw materials. Nevertheless, the vertical farming market thrived during the crisis. The high demand for organic food products and the surging demand for locally-grown agri-products have led the manufacturers to expand their production facilities. Bowery Farming has taken a leading position in this market, and it continues to bring indoor farming to the masses in the United States and globally. It has built a strong brand and is routing towards profitability.

Investments Rounds and Share Price

Investors and Their Most Successful Investments

Fidelity Management – invested in Clover Health, Squarespace and AppHarvest

GV – Robinhood, Lemonade, Upstart

General Catalyst – The Honest Company, Deliveroo and BigCommerce

GGV Capital – Square, Alibaba Group and BigCommerce

Temasek – Blend, Alibaba Group and Zomato

Risks Related to Bowery Farming

Competition. The US vertical farm market is highly fragmented. Among the main competitors of Bowery farming is Plenty, which has a farm in Wyoming and is building another in California. The company plans to supply 430 stores. Another rival, AeroFarms, currently owns the world’s largest vertical farm, which, like Bowery, is located in New Jersey. However, we believe that Bowery’s strong team, support from famous investors and large research capacity will help Bowery reinforce its leading positions and brand recognition.

Overvaluation of the market. The vertical farming industry is quite young – there is a risk that in the long run this market will grow more slowly than venture capitalists and analysts assume. This could reduce Bowery Farming’s value.