AppHarvest Raises More Cash for World’s Biggest Greenhouse

(Bloomberg) -- In a bid to push more sustainable production into the U.S. food system, hedge funder-turned impact investor Jeff Ubben is backing agricultural technology greenhouse startup AppHarvest in his first deal since leaving ValueAct Capital Management LP in June to launch a new firm, Inclusive Capital. 

AppHarvest, which is planning to open the world’s largest greenhouse this fall—a 2.76 million square foot facility in Morehead, Kentucky—raised $28 million in a Series C funding round, it announced Thursday. That brings the total raised for the company to $150 million over the past two years.

The latest round was led by J.D. Vance’s  Narya Capital, which focuses on “scientifically complicated” startups. It also includes James Murdoch’s Lupa Systems investment firm and Steve Case’s Rise of the Rest fund, among others.  

“We have to figure out how to feed people fresh produce that doesn’t extract so much from the planet,” Ubben said in an interview. “This is all about creating nutrition-rich whole foods that don’t sit on the border for a week waiting to get to the supermarket, and using agriculture and technology to get there at scale.”

The company’s Kentucky greenhouse less than a day’s drive from 70% of America’s population, AppHarvest said, a strategy designed to reduce fuel and food waste associated with transporting fresh vegetables around the country. The greenhouse grower, which relies on rainwater rather than local water supplies, aims to create jobs in Eastern Kentucky, a region hard hit by the decline of the coal industry.

“Agriculture is at a tipping point now where we have to have technology and infrastructure come onto farms and update them over the next few years,” said AppHarvest founder and Chief Executive Officer Jonathan Webb. The company is betting that supply chain disruptions related to the coronavirus pandemic will push large grocers to back more domestic sources of produce. 

AppHarvest, which said it plans another, larger fundraising round later this year, plans to use the new funding to hire employees. It said its facility in Morehead will have 300 workers when it opens in the fall. The startup said it added Martha Stewart, Impossible Foods Chief Financial Officer David Lee and author J.D. Vance to its board of directors in conjunction with the fundraising round.

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