Equilibrium-backed AppHarvest, a start-up building a greenhouse in Morehead, Kentucky, secured an additional $11 million in a financing round its founder says was propelled by association with well-known investors.
“We’ve had a lot of high-profile investor conversations to bring people along,” founder and chief executive Jonathan Webb told Agri Investor soon after announcement of the round, which brought AppHarvest’s total fundraise to $120 million.
Investors in the round included the Rise of the Rest Seed Fund, managed by AOL co-founder Steve Case’s investment firm Revolution; ValueAct Capital’s socially responsible Spring Fund, which is managed by founder and chairman Jeffrey Ubben; and Blake Griffin Enterprises, a family office affiliated with a professional basketball player of the same name.
“Look at the excitement of a Blake Griffin wanting to get involved in a fruit and vegetable company in the middle part of America,” Webb said. “That shows how not only big, sophisticated institutional investors, but also investors with influence that don’t want to just use their money, want to get involved with these efforts. It’s an exciting time to be in agriculture.”
Equilibrium struck an $82 million agreement with AppHarvest in May that would see the firm lead construction of its 2.76 million square foot greenhouse in Morehead. Equilibrium chairman Dave Chen said AppHarvest will lease the greenhouse from his firm upon construction.
Webb said the Portland, Oregon-headquartered real assets specialist is among the investors that have committed additional capital to support construction of the facility as part of the $11 million round, but declined to provide additional details.
He said the Morehead facility will focus on the production of tomatoes and begin operations during the second half of 2020.
A portion of the capital from the most recent $11 million round, he added, will be devoted to personnel. For example, he said that Tim Robinson – formerly vice president of production at publicly listed Canadian greenhouse operator Village Farms – had recently joined AppHarvest as its vice president for production.
Webb said the financing round would also support training initiatives in local schools as well as outreach measures to help train a workforce, and thereby enable Central Appalachia to become a hub for indoor ag production in North America.
Webb added that in addition to the greenhouse’s location – which he said would allow it to supply three quarters of the US market within a day’s drive – AppHarvest’s potential to provide job opportunities in an economically challenged part of the country had been received warmly by LPs.
“The reality investors are going to have to face is – the companies we are talking about, 20 years from now, are going to be the companies looking to solve many of our societal problems,” he said. “You can call it impact investing, you can call it purpose-driven investment or just good, solid fundamental long-term investments. The capital is finding its way to those companies and those companies are finding that capital.”