Six investors add $6m to AeroFarms funding round amid institutional interest

New Jersey-headquartered indoor farming company AeroFarms has raised at least $5.7 million from six previously undisclosed investors that include Momofuku chef and founder David Chang, retired General David Petraeus and Swedish furniture retailer Ikea.

The company announced Friday that it closed a $40 million Series D investment round in which the new investors joined existing backers. These include Emir of Dubai-linked Meraas Holdings; ADM Capital’s Cibus Fund, which held a first close on $100 million in May and has a $500 million target; and Wheatsheaf Group, an agriculture-focused subsidiary of the Duke of Westminster’s Grosvenor Estate.

AeroFarms co-founder and chief marketing officer Mark Oshima declined to identify the three remaining unnamed investors. He did tell Agri Investor, however, that most had been secured in May, but that timing and logistics delayed the official announcement made last week.

Oshima added that General Petraeus, chairman of the KKR Global Institute and a partner at KKR, had first come to know AeroFarms as the result of a presentation given to the private equity giant a few years ago. Oshima said that Petraeus, who visited an AeroFarms site in 2016 in part to meet company employees who are US veterans, made his investment partially with concepts of national “food security” and “food resiliency” in mind.

“These are important themes and we think about the impact that AeroFarms can have on addressing them, and he [Petraeus] wanted to get involved,” Oshima said.

AeroFarms said that Chang will also join the company’s board of advisors to help with further culinary developments.

“Without question, he [Chang] is one of the top arbiters of taste,” Oshima said, adding that Chang reports personally using AeroFarms products. “He’s going to help us, not just on the retail, but also food service, thinking about how to have differentiated products offerings and create excitement in this category.”

Institutional demand

Oshima said that AeroFarms has  continued to see strong interest from institutional investors and is currently thinking of ways to meet the demand for exposure with further financing rounds. He added that capital from the Series D would be used to invest in further research and development and support steps towards continuing to expand internationally, with Asia and the Middle East being key target markets.

Founded in 2004, AeroFarms operates nine indoor farms that each use LED lighting, aeroponic mist and data analytics to grow what the company says is up to 2 million pounds of leafy greens annually. It has raised more than $100 million in corporate and project financing from investors that have also included AB (formerly AllianceBernstein), Goldman Sachs and others.

In May, a regulatory filing revealed that AeroFarms had raised $34.3 million from 14 investors for a vehicle with a target of $40 million. A subsequent filing for the same vehicle in August showed it to have reached its target, technically $40.4 million, with commitments from a total of 20 investors.

“We’re the world leader in the space, probably by about two years,” David Rosenberg, AeroFarms’ CEO, told Agri Investor in May. “This [fund] speaks to our ambitions of growing internationally and these parties are helping us expand internationally. It’s more than just money, there is a strategic element to the money.”