AppHarvest, the US-based farming and technology specialist, has closed an US$82 million deal with Equilibrium Capital to build the company's 60-acre greenhouse in Morehead, Kentucky. In addition, ValueAct Spring Fund has led the company's Series A, with existing investor Revolution's Rise of the Rest Seed Fund also participating.
Construction has began immediately on the company's first controlled-environment agriculture facility in Appalachia with its opening planned for 2020. During the timeline of construction to completion, AppHarvest will create 285 full-time permanent jobs, as well as 100 construction jobs.
Climate control in the facility will use built-in software to react in real-time to incoming weather patterns and temperature changes, and address fertiliser and humidity needs.
The greenhouse will also be outfitted with a $15m hybrid LED lighting system, making it the world's largest LED installation for a single building. For this, the facility will utilise Philips GreenPower LEDs from Signify and will begin installation early next year.
Climate control in the facility will use built-in software to react in real-time to incoming weather patterns and temperature changes, and address fertiliser and humidity needs
The facility will grow tomatoes and cucumbers to be distributed to America's top grocers by distribution partner Mastronardi Produce.
"The 60-acre, state-of-the-art facility will be one of the most sustainable, efficient and technologically advanced greenhouses of its kind," said Paul Mastronardi, President and CEO, and the fourth-generation family member to lead Mastronardi Produce, which will distribute the produce to America's top grocers. "This is a significant milestone for Kentucky's farming and food sectors."
Investors
ValueAct Capital Founder and CEO Jeffrey W Ubben has also joined AppHarvest's board of directors alongside ValueAct Spring Fund leading a Series A financing round for the company. The amount of the Series A financing will not be disclosed.
Revolution's Rise of the Rest Seed Fund, led by AOL Co-founder Steve Case and best-selling author JD Vance, has made a follow-on investment in AppHarvest as part of the Series A, adding to its initial seed funding.
Goals
As a Benefit Corporation, AppHarvest aims to solve four distinct problems:
America needs to farm more sustainably: Controlled-environment agriculture technology will allow AppHarvest to grow non-GMO, pesticide-free produce year-round using 90% less water than traditional farming. The facility's water needs will be met entirely by a 10-acre retention pond combined with sophisticated circular irrigation systems. These growing techniques have been perfected by farmers in the Netherlands, which uses AgTech to realise incredibly high yields. The Netherlands is the world's second-largest exporter of agricultural products, despite a landmass roughly similar in size to Eastern Kentucky.
America needs a homegrown food supply: The United States relies increasingly on imports, settling for produce that is picked prior to being ripe then ages up to a week on a truck before briefly sitting in grocery bins because of its shortened shelf life. AppHarvest's location places it within a day's drive of 70% of the US population, reducing diesel use in transportation by 80% compared to foreign imports trucked to the east coast.
America needs better access to nutritious food: Just 1 in 10 adults eat enough fruits and vegetables, according to the US Centers for Disease Control and Prevention. Hunger-relief non-profit Feeding America also estimates 12.9% of Americans struggle with food insecurity, or the lack of access, at times, to enough nutritionally adequate food. Children are worse off nationwide with 17.5% of kids dealing with food insecurity. By providing fresher, cost-competitive produce, AppHarvest will encourage Americans to eat more fruits and vegetables.
America needs to invest in Appalachia and create jobs: The coal industry, which long served as Appalachia's dominant industry, has seen employment fall to its lowest levels since 1898. Throughout Appalachia, one in four residents live in poverty. In Morehead, Kentucky, where AppHarvest's first controlled-environment agriculture facility will be built, the US Census Bureau estimates 23.7% of residents live in poverty compared to just 12.3% nationally. In partnership with regional universities and colleges, AppHarvest plans to include educational upskilling initiatives for its employees.
Equilibrium Chairman Dave Chen: "We are actively investing in the expansion of large-scale controlled-environment foods and agriculture across North America. Farming is shifting to a capital and production infrastructure intensive model to meet the demands of consumers, retailers and food processors for more reliable, regionally grown, year-round, fresher and sustainable foods."
