February 5, 2018 / 11:21 AM / 8 months ago

Berlin urban farm-in-a-box raises $25 million for European expansion

FRANKFURT (Reuters) - Berlin-based urban farming start-up Infarm has raised $25 million to expand its indoor growing system - a soil-less technology better known for furtively growing marijuana - into major supermarket chains and restaurants across Europe.

Erez Galonska and Osnat Michaeli, founders of the urban farming start-up Infarm, pose for a picture beside indoor growing systems at the company's showroom in Berlin, Germany, February 5, 2018. REUTERS/Hannibal Hanschke

The company, founded by three Israeli filmmakers-turned-entrepreneurs, plans to use the funds to roll out mini, in-store farms with Edeka, Germany’s largest supermarket chain. It is also working with Metro (B4B.DE), the country’s No.2 grocer.

Infarm wants to help cities become self-sufficient in food production, lowering farming’s environmental footprint.

A single, two-square-meter unit can be located in stores or dining rooms, or the same units can be chained together in central distribution centers to grow hundreds of different varieties of plants, each with its own micro-climate.

“We decided it would be more effective to distribute the farms themselves and farm directly where people live and eat,” Co-Founder and Chief Executive Erez Galonska said.

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Industrial-scale U.S. rivals claim to be removing waste from long-distance agricultural supply chains, while Infarm is trying to break down the need for a supply chain itself, Osnat Michaeli, another co-founder and Infarm’s chief marketing officer, told Reuters.

Plenty Inc of South San Francisco, which operates vast indoor fields growing fruit, vegetables and herbs, raised $200 million in a 2017 round led by Softbank (9984.T) Vision Fund, marking the largest-ever agricultural tech venture funding.

Infarm said it will have 1,000 miniature urban farms operating across Europe by the middle of next year, starting with locations in Paris, London, Copenhagen and additional German cities by the end of 2018.

The compact plant growing system sits on stacked shelves, using hydroponics - a way of growing plants without soil - in a climate and LED-lighting controlled glass case. It grows everyday and exotic herbs like small-leaf Greek basil or Peruvian mint and leafy greens which customers are selling for prices at or below that of plastic-packaged herbs.

“We have replaced 15 grams of herbs in plastic boxes with living plants priced around 1.50 euros,” said Michaeli. “It’s the same type, similar price, but it’s alive.”

The new round of investment was led by Balderton Capital, one of Europe’s top early-stage venture investors, and joined by debt-financing firm Triple Point Capital and Mons Investments.

The company plans to invest further in its Berlin-based urban farm and research lab to expand its product catalog beyond some 200 herbs currently to include tomatoes, chillies, mushrooms, fruits and flowering vegetables, the company said.

Reporting by Eric Auchard; Editing by Kirsten Donovan

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