Greenhouses just got a little greener.
BrightFarms, a New York City-based company bringing commercial hydroponic greenhouses to urban areas, raised $4.9M in a series-B round. Lead investors were NGEN Partners; Emil Capital Partners and Ted Caplow, the BrightFarms founder. Other investors were undisclosed family VC firms and individuals.
“There are a large number investors who are interested in the ag space,” VP of Finance Neal Parikh told AgFunder. “I’m almost more surprised when investors don’t seem to be interested in these issues of health and wellness, climate change and sustainability.”
This series B brings the company’s aggregate investment to an impressive $9.2 million.
“Produce buyers sincerely want to bring good food at good prices to their customers,” said BrightFarm’s CEO Paul Lightfoot. “They just need a better option.”
Parikh says BrightFarm’s appeal to investors is two-fold. First, the company is nestled in the nexus of sustainability, demand for local produce, and hydroponic greenhouse technology, all areas in which “impact investors” are looking.
But perhaps more importantly, BrightFarm’s business model is the key that Parikh says sells it best. “We’re not innovating based on technology,” said Parikh. “We’re really about business model innovation.”
Focused predominantly in urban areas, the greenhouses are largely based on a similar footprint model. Pakrih says that by having similar greenhouses throughout, risk for investors is decreased as the successful models continue to thrive.
BrightFarms is planning to use the Series B funding to scale up production within the US. With seven retail partners such as A&P, Shnucks, and McCaffrey’s selling its produce, BrightFarms has plans for greenhouses in Washington DC, St. Louis, and New York City. The farms are expected to produce 600,000 lbs of produce per year.
“We are particularly excited to be supporting BrightFarms, as it sits on the leading edge of the demand for local food production, utilizing sustainable practices and disruptive distribution model,” said NGEN managing director Peter Grubstein in a statement. “BrightFarms is well-positioned to rapidly scale its model and now has the customer support and team to do so.”
While this 4.9 million-dollar announcement is a big one, Parikh says there are more updates to come in the first quarter of this year.
FEATURED PHOTO: Photo from BrightFarms