Temasek and Bayer JV targets fledging vertical farming seeds space

Unfold Bio has received an initial $30m in start-up capital from the two founders but future funding rounds could be opened up to external investors.

A new company jointly established by Temasek and Leaps by Bayer, the impact investment arm of Bayer AG, is to be given access to Bayer’s intellectual property on thousands of lines of vegetable and fruit seeds.

Unfold Bio will start by creating seed varieties for lettuce, spinach, cucumber, tomato and peppers specifically bred to be grown in a vertical farming environment and will then continue to expand its portfolio.

“To the best of our knowledge, all others in the vertical farming space are more focused on, let’s call it the hardware, so greenhouses, the lightning, the energy, but not so much really on the ingredients,” head of Leaps by Bayer Jürgen Eckhardt told Agri Investor.

“That’s where Unfold is really unique and has a head start on everybody else because Unfold is basically gets access to part of Bayer’s IP in the germplasm space. And that’s obviously a great advantage for Unfold to open up successfully.”

Unfold received $30 million in a closed initial funding round from the two founders. Eckhardt said it is “well conceivable” that future rounds could be open-up for external investor participation.

The vertical farming space is estimated to currently be worth around $2 billion to $3 billion dollars by various analysts, with growth projections for the market’s growth ranging between $10 billion to $15 billion by 2030.

“It’s poised to grow because of the inherent advantages. We are faced with a growing population and scarce land resources. If we manage to grow fruit and vegetables in large cities where there is no arable agricultural land, then obviously we can expand and produce more food than we are able to today. Plus, it’s going to be local, fresh, it’s going to use less water, less land [and will] have a higher yield because it’s a controlled environment,” said Eckhardt.

Unfold will be led by president and CEO Dr John Purcell, who moves from his role at Bayer as head of vegetable R&D, crop science, senior vice-president. Purcell will be based in the new company’s California office, and it will also have an office in Singapore.

One of the ways Unfold will seek to enter the market is through partnerships with stakeholders across the supply chain, the company’s website said, but Eckhardt said none of these have been fleshed out yet at this early stage.

He did say that Unfold will be “very open” in this regard, and partnerships could take the shape of joint ventures, licensing agreements, or supply agreements.

Separately, Kentucky-headquartered AppHarvest recently closed a $28 million Series C funding round led by Narya Capital, to build out its flagship 2.76 million-square-foot greenhouse facility.

AppHarvest’s funding rounds have been notable to date due to their ability to attract high profile individual investors with limited prior exposure to agriculture, including former News Corp executive James Murdoch and NBA stars Kevin Johnson and Blake Griffin, among others.