Gotham Greens raises $310M and makes first acquisition

Dive Brief:

• Gotham Greens raised $310 million in a Series E round led by BMO Impact Investment Fund and Ares Management. The indoor farming company plans to use the funding to support greenhouses under construction in Texas, Georgia and Colorado; facility expansions in Illinois and Rhode Island; as well as future projects and acquisitions.    
• Gotham Greens also has acquired FresH2O Growers Inc., a Virginia-based producer of leafy green salad products, for an undisclosed amount. The purchase includes a 540,000-square-foot hydroponic greenhouse in Stevensburg, Virginia, that supplies grocery stores in the Mid-Atlantic region. 
• The controlled environment agriculture (CEA) space continues to draw investors and big fundraising rounds to support the considerable costs associated with building and operating its high-tech greenhouses.

Dive Insight:

With its largest funding round to date, Gotham Greens is thinking big as it expands its national footprint and product mix.

By 2023, the New York-based indoor farming company plans to own and operate 13 climate-controlled hydroponic greenhouses in nine states, spanning more than 40 acres. Gotham Greens already has a presence in the Northeast, Midwest and the Mountain and Western regions. Its $34 million greenhouse under construction in Monroe, Georgia, will not only help establish its presence in the Southeast but also give it access to the massive Atlanta market about 50 miles away.

The purchase of FresH2O Growers fills in some of the gaps between Gotham Greens’ Northeast and Southeast markets. The acquisition — Gotham Greens’ first in its 13-year history — and expansions will help it meet its goal of doubling the size of its greenhouse capacity to more than 1.2 million square feet in 2022. 

Gotham Greens saw a 26% year-over-year sales increase in leafy greens, according to Nielsen data shared by the company, compared to a 3% growth for the entire conventional greens segment. Beyond salad greens, the company’s product line has expanded into herbs, refrigerated salad dressings, dips and cooking sauces. 

Its products are available in more than 3,000 grocery stores nationwide including Whole Foods, Kroger, Albertsons and Amazon Fresh. Gotham Greens is aiming to deliver its fresh produce within a day’s drive of its greenhouses to 90% of consumers across the U.S.

“Today, our ambitions and footprint are outgrowing our roots in the best way,” Viraj Puri, co-founder and CEO of Gotham Greens, said in a statement. “We’re humbled to receive this funding from new and existing investors to continue our national expansion.” 

Gotham Greens has raised a total of $440 million since it was founded in 2009, according to the company. Its series E round is one of the largest yet in the CEA space, placing it among Bowery Farming’s $320.7 million Series C funding round and Upward Farms’ $121.7 million Series B. The news also shows investors’ enthusiasm has not waned for the segment even after a banner year in 2021. Indoor growers raised a total of $1.3 billion last year, according to PitchBook, up 25% from 2020.