
Plenty, Indoor Farming Startup, Raises $200M - stenlix
https://techcrunch.com/2017/07/19/billionaires-make-it-rain-on-plenty-the-indoor-farming-startup/?ncid=rss&utm_source=tcfbpage&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29&utm_content=FaceBook&sr_share=facebook
======
Osiris30
See previous recent discussion of indoor/vertical farming (1).

As discussed on that thread, vertical/indoor farming is great for leafy
greens, but much harder for other plants.

See this video [2] - "Why Vertical Farming Won't Save the Planet: Bruce
Bugbee, Utah State University Department of Plants, Soils and Climate, has
studied plant growth in controlled environments for most of his career. Here
he presents the results of his analysis of the environmental effects of
Vertical Farming/Indoor Agriculture (September 2015)".

A copy of the slides can be downloaded here (the link shown on the youtube
page is dead - correct link[3]).

[1]
[https://news.ycombinator.com/item?id=14347288](https://news.ycombinator.com/item?id=14347288)

[2]
[https://www.youtube.com/watch?v=ISAKc9gpGjw](https://www.youtube.com/watch?v=ISAKc9gpGjw)

[3]
[https://cpl.usu.edu/htm/research/publication=15787](https://cpl.usu.edu/htm/research/publication=15787)

~~~
IkmoIkmo
This is absolutely crucial. I love indoor farming, I've built some hydroponics
systems before, automated a bunch and spoke with my municipality about urban
farming projects.

But anyone who looks into it long enough finds that indoor-farming only works
for leafy greens. Not because they're leafy greens, but because they're low-
caloric plants.

i.e. a whole head of lettuce is about 50 calories. No wonder you can grow it
under artificial lighting in water.

That works for a commercial solution: a (hyper) 'local' head of lettuce,
produced without any pesticides, by turning a shop or office or otherwise
urban environment into 'nature', is lovely and can (with some ignorance on the
part of the customer) sell at a premium. But indoor farming still does nothing
to impact our ecological footprint at any scale. Once you can produce our
_staple_ foods in a manner that's less energy intensive inside than outside,
that'd be amazing. But I haven't ever seen anything like that proposed on a
major scale.

~~~
tpeo
I don't think growing staples within cities will be economically viable within
our lifetimes. As a general rule, agricultural land use orders itself around
it's markets according to transportation. The more delicate the produce, the
closer the producers must be to a city. There's even a (very simple, it's from
the 19th century) model for this, which is the Von Thünen's model of land use.

I wish I had some actual data easy at hand to show you, but this is more or
less observable from history. Until active refrigeration, spoilage losses
associated with the more delicate agricultural products pretty much put them
outside of the reach of the majority of urban dwellers. If you wanted any sort
of fresh dairy, fresh meat, fresh vegetables or fresh fruit in say, the early
19th century, you'd better live on a farm. So whereas a farmer might have had
fresh milk, a city worker would have cheese, and instead of fresh meat, cured
meat, and so on.

But anyway, in short of the whole world becoming one huge city, it's unlikely
that staples would ever be grown inside them.

~~~
schiffern
>There's even a (very simple, it's from the 19th century) model for this,
which is the Von Thünen's model of land use.

Fun fact, Von Thünen's model was the original inspiration for "zone planning."
[https://deepgreenpermaculture.com/permaculture/permaculture-...](https://deepgreenpermaculture.com/permaculture/permaculture-
design-principles/4-zones-and-sectors-efficient-energy-planning/)

------
jrapdx3
The short article doesn't provide info about the technology to be used in
"indoor farming", so I can't say too much about it.

However based on past experience with growing crops under artificial light, I
wonder if the investment makes sense. There are a number of issues that have
to be addressed, the most urgent is providing enough light for plants to grow.
Sunlight is _very expensive_ to replicate with human-made light sources, the
energy requirements are steep even with the most efficient illumination
available.

Indoor culture is still subject to "standard" problems like insects, plant
diseases, nutrient and water supply requirements. These are handled routinely
in growing "under glass" so probably nothing novel in it for indoor
production.

Except for human interplanetary travel, the applications for "indoor growing"
are hard to imagine. It used to be people would grow cannabis indoors where
doing so was illegal, the priced fetched for the product justified the expense
of the operation. For food crops, who would pay the high cost that has to be
charged just to break even?

One year I successfully produced a small bounty of tomatoes in the dead of
winter under artificial light. When all was done and said I calculated the 5cm
tomatoes were worth about $25 each ($30 adjusted for inflation). Even with
economies of scale and better technology, who would pay $10 or more for a mere
tomato when it's readily available at a nearby grocery for a tenth the cost?

If I'm somehow missing the boat, I'm sure someone will lend me a clue.

~~~
thisone
What kind of light were you using?

I currently use 5w LED grow lights for garden vegetable hydroponics. They are
very cost effective. At about 12p/kwh, make it easy and say lights on for 10
hours a day, that would be 1 kwh every 20 days per light, so 12p per 20 days
per light.

From what I understand from people who need to also provide heat to their
crops, what they save in electricity cost with LEDs, they end up spending in
heating costs. So in some cases it can be a bit of a wash

~~~
jrapdx3
At the time I was using metal halide/HP sodium lamps. Not as efficient as LED
to be sure (LED gives >1.5 times the output per watt) but at scale, even with
LED, the energy input required remains substantial. LED does have advantages,
e.g., easier to supply illumination at plant level, but indoor growing is
still not a cheap or easy thing to accomplish.

------
billyhoffman
Since indoor farming is best for low caloric leafy greens, I assumed the long
term strategy of these companies was based on the legalization or
decriminalization of marijuana. As in, grow leafy veggies or tomatoes in
vertical, urban farms for now to work out the logistical and scale issues,
then switch to substantially higher value crop as the political situation
changes.

Given the new administration in the US and the Attorney General's push on
marijuana, if this was the endgame of these start ups, it will be a bumpy
ride.

~~~
yourapostasy
I can't believe I had to scroll all the way down here to find this comment. If
true, then this is a variation of land banking, but I agree with you on how
unstable the political picture is at the moment for pot legalization, hence
making this business model a little dicey.

However, I've yet to run across an explanation that squares the "they're
positioning themselves for growing pot" hypothesis with the question, "why
indoors?". If pot is legalized, why grow it more expensively indoors, when it
can be another cash crop for far cheaper outdoors?

~~~
wcchandler
More control over the product. You can grow "clones" of a plant which
effectively make them identical to each other but if one gets more light, more
humidity, literally just about anything, it can alter the resulting trichomes
and terpenes. By controlling more variables you can have a slightly more
reliable product.

And people can get very picky about their weed.

------
danblick
I haven't heard of Plenty before. At first I thought they wanted to build
indoor farms _in_ cities, but I guess you could still build them someplace
else (where real estate is fairly cheap) and make turnaround _faster_ by
taking advantage of indoor technology instead of using fields. [The articles
mentions LocalGarden and FarmedHere, which I guess is where my impression came
from.]

Is that where they hope to make their money - getting consumers to pay for
fresher food? Or else, can they grow better produce indoors? Just trying to
understand their value proposition.

Not long ago I was reading about a different thing called Farmbot. There's a
discussion online about how much area you'd need to grow all your own food.
They calculated something like 250 square meters using black beans. I was
really impressed by how much _space_ food production takes up. It's funny to
think that just to survive, each of us living in a city depends on a big chunk
of land somewhere else.

[https://farmbot.io/2015/10/14/how-much-food-can-farmbot-
grow...](https://farmbot.io/2015/10/14/how-much-food-can-farmbot-grow/)

~~~
jv22222
A few things make this a good value prop:

\- It's much easier to grow plants inside because you don't have to worry
about weird weather like frost or insects or fungus etc.

\- You can claim organic status and that puts you in a higher price bracket

\- You don't need to spend anywhere near as much on transportation so that
saves you lots of cash

\- You can have much tighter control of supply/demand dynamics (for instance
ship smaller batches) because of local proximity

I'm sure there are more but those are the ones that spring to mind.

~~~
KaiserPro
A few things that make it less good value:

\- Its not new tech, its greenhouses with indoor lighting

\- Its an enclosed large monoculture of plants, which means you are prone to
pest and fungus. [see note]

\- It has a very large electricity demand (heat and electricity)

\- It is labour intensive.

[note]

growing plants in the city is difficult, mainly because the food triangle is
so distorted. In central london there are loads of aphids from the lime trees,
and lots of powder mildew.

Now considering these setups are aimed at green leafy rapid growth plants,
you're going to be spending lots of importing ladybirds. (not much you can do
about powder mildew though)

~~~
posterboy
I've been led to believe you'd be best served with a clean room setup of some
level, clean clothes and all.

edit: anyway, _within the city_ is a ridiculous proposal at scale, if housing
is scarce already. Except for huge price differentials as from cannabis.

~~~
KaiserPro
The clean room would explain the cost. if the yield is really 500x traditional
farms, that explains why its still more expensive than "organic" produce

------
avip
There's no shortage in players in this space: Alterrus (built Vancouver's
vertical farm, filed bankruptcy), infarm (Germany), aerofarms (US), growup
(UK).

There are lots of issues to settle with vertical farming. One is organic
labelling, which is N/A for detached soil in most (all?) countries. They can't
compete in the non-organic market.

There's currently nothing "sustainable" or "ecologic" about these indoor
farms. They are used to grow leisure low-calorie high price ingredients for
hipsters.

~~~
petra
Assuming they manage the convince a large player in the organic retail biz to
play they can create some sort of a "label" and go from there. Not that big of
an issue.

~~~
avip
This is not how food labelling usually works.

For the current state of hydroponics in the US:
[https://www.forbes.com/sites/annefield/2017/04/18/usda-to-
we...](https://www.forbes.com/sites/annefield/2017/04/18/usda-to-weigh-in-on-
whether-organic-farming-means-using-soil/#60724cf046be)

~~~
exhilaration
The article says the USDA would make a decision on April 19th of this year but
I can't find what that decision was. Do you know?

------
patkai
I am amazed and wish them luck, but it's almost impossible to imagine the
economics of this. Whatever equation you write up there are at least two
impossible factors: indoor land vs. outdoor "land" price is like 4000-10000
times higher, and growth time / logistics time is like 1000? I can imagine
this in a fine restaurant though, picking a tomato in front of your eyes and
chopping it, not too shabby!

~~~
slfnflctd
As others here have pointed out, it undoubtedly only makes economic sense in a
few niche scenarios right now. Premium hyper-local urban boutique veggies used
in small quantities, or perhaps supplementing MREs in very remote, isolated
military/industrial compounds (possibly including Mars?).

However, if we were facing the specter of a global nuclear winter - or similar
effects from a large asteroid impact, ground/water pollution, etc. - I think
something would be worked out with regard to the 'cost of renting' large
indoor spaces.

------
inspctr_reality
This round is likely to be a combination of equity, debt and non-dilutive
capital like project finance -- and it is not the first 9-figure deal in
indoor ag, just the first made public this way. Indoor ag is growing quickly
and investor appetites are up.

I am co-founder of a venture-backed indoor ag company. Here is a good summary
of the "on the ground" view authored from the woman who runs Indoor Ag Con
where Plenty presented a couple months ago:
[https://agfundernews.com/will-2017-bring-indoor-
ag.html](https://agfundernews.com/will-2017-bring-indoor-ag.html)

The calorie problem is true. You can't feed the world on leafy greens. Many
startups are trying to combine aquaponics to provide protein with leafy
greens. Those startups are not as far along as Plenty.

Cannabis is great but the cost and price are both on an almost inevitable path
to commodification. It's high-value now but it will not always be high value.

Insects may be the greatest area for advancement in indoor ag. Insects can be
used for protein, vitamins and nutrients and calories from fat concentrations.

The real advantage is something analogous to alternative energy's advantages:
distributed infrastructure with lower risk and lower volatility.

------
Fricken
SoftBank is on a rip, wow.

[https://www.crunchbase.com/organization/softbank/timeline#/t...](https://www.crunchbase.com/organization/softbank/timeline#/timeline/index)

~~~
matt_wulfeck
The country has negative interest rates. That money has to go to work
somewhere.

------
cannonpr
There was a question posted in the techcrunch comments section regarding
Nitrogen fertiliser from natural gas being used heavily in vertical farms such
as this. I understand thats the case for a lot of agriculture regardless. That
having been the case, regardless of how 'green' these companies try to go,
aren't they really just using fossil fuels en mass the same as everyone else ?

~~~
dsfyu404ed
It's no different than shipping your product in plastic containers.

Sure, there's a dead dinosaur somewhere up the supply chain but unless
whatever your company's industrial process is is incredibly inefficient it's
not a big deal.

~~~
schiffern
>Sure, there's [fossil fuels] somewhere up the supply chain but... it's not a
big deal.

It is if you want sustainable food production.

An unsustainable system is _by definition_ in the process of destroying
itself. I don't know about you, but I want humanity to continue having food
for generations to come.

------
builtinbuffalo
This smells like a long play on cannabis. As it becomes further legalized
across the country the demand will grow for suppliers.

------
zzmicier
Farming startup that literally raises money is kinda fun.

~~~
LogicX
Growing money on... leafy plants?

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justinzollars
Their idea is very cool. their logo looks like a toilet paper brand.

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Jabanga
Indoor farms makes sense to me as a dual-use house plant, i.e. if I'm going to
have house plants, they may as well be edible.

