80 Acres Farms strikes 'significant investment' from San Francisco private equity firm
Virgo Investment Group has completed more than $1.1bn in investments related to utility-scale wind, community solar, electric vehicle charging and now an LED lighting driven business through 80 Acres Farms.
Founded in 2015 by food industry executives Mike Zelkind and Tisha Livingston, 80 Acres Farms plots its indoor farming facilities close to customers, who have access to a variety of locally grown, just-picked leafy greens, microgreens, and
vine crops, including tomatoes and cucumbers grown completely indoors in the company's closed loop hydroponic delivery system using LED lighting (allowing fresh produce to grow 365 days a year).
Over the past three years, the company has developed its own artificial intelligence-powered growing system, data monitoring, and automation technologies to deliver locally-grown produce to consumers at an affordable price.
“We are optimizing every aspect of our production processes and driving down costs, which is crucial to scaling an indoor farming business like ours,” said Zelkind, co-founder and chief executive officer of 80 Acres Farms.
80 Acres Farms currently distributes to major national grocers, local retailers, restaurants, and food service companies from its facilities in Ohio, Arkansas, North Carolina, and Alabama.
The multi-billion dollar market of vertical farming
A continuous rise in the world's population combined with growing land and water scarcity has forced the food industry to create sustainable agricultural solutions such as vertical farming. According to Allied Market Research, vertical farming is expected to become a substitute to traditional farming, as it produces 70% more crop and uses almost 90% less water as compared to the traditional farming.
The global vertical farming market is growing at CAGR of 23.6% reaching $6.4bn by 2023 with hydroponics holding 42% market share of the category (in 2016), Allied Market Research noted.
Another positive aspect of indoor vertical farming, is that it gives consumers access to local produce all year round at a more wallet-friendly price point since the greens and vegetables are not traveling the expensive long distances to arrive at retailers. And consumer purchase intent for local items has never been higher: according to the Food Marketing Institute's Pwoer of Produce report, grocery shoppers are 60% more likely to buy a locally-grown item (if quality and price are the same) compared to a conventional and organic counterpart.
Eli Aheto, partner of Virgo Investment Group, added: “80 Acres Farms has created a unique and automated growing process and has built great relationships with its retail customers. We want to help accelerate the company’s growth in this multi-billion-dollar market. The 80 Acres investment is an expression of Virgo's longstanding focus on investing in energy efficiency opportunities driven by reduced equipment costs."
With the recent investment, 80 Acres Farms will be able to complete the build-out of a fully-automated (from seeding to growing) indoor farm in Hamilton, Ohio, featuring robotics, artificial intelligence, data analytics, and around-the-clock monitoring sensors and control systems to optimize every aspect of growing produce indoors.
The first phase of the Hamilton project under construction is expected to be operational in early 2019, the company said.
“We are rapidly increasing yields for our produce, while advancing each generation of our grow zone designs to lower capital costs, production costs and reduce the use of natural resources. Our facilities represent the realization of the next generation of farming. Our vision is to prove that indoor farming can be fully-automated, commercially scalable, higher-yielding, and profitable,’’ Zelkind said.