Fertilizing Growth: Gotham Greens Raises $310M To Expand Reach and Portfolio

Indoor farming company Gotham Greens announced today it raised $310 million to expand the reach of its “decentralized agricultural” systems nationwide and expand its array of CPG products, with new launches set for later this month.

The round brings Gotham’s total capital raised to-date to $440 million and includes equity and debt funding. The raise was led by Bank of Montreal investment fund BMO Impact Investment Fund (IIF) and Ares Management funds, with additional participation from existing investors Manna Tree Partners and The Silverman Group as well as new backers including Commonfund, RockCreek and Kimco Realty Corporation.

“Today, our ambitions and footprint are outgrowing our roots in the best way, and we’re humbled to receive this funding from new and existing investors to continue our national expansion,” said Viraj Puri, co-founder and CEO of Gotham Greens, in a press release. “With increasing climate and supply chain related issues facing our food system, it’s more important than ever to bring innovative farming solutions that grow high-quality produce while using fewer precious natural resources.”

The capital is already being put to use. In today’s release Gotham Greens also announced its acquisition of hydroponic farm FresH2O Growers which sells leafy salad greens to stores across the Mid-Atlantic. Gotham will take over operations at its Stevensburg, Virginia greenhouse as well as manage the business’ sales, marketing and distribution.

“We have admired Gotham Greens’ outstanding track record of success in the industry and being exceptional growers, and there was no better choice in the [controlled environment agricultural (CEA)] industry to continue what we built in Virginia,” said Joe Van Wingerden, former owner of FresH2O Growers, Inc, in a press release. “Gotham Greens and FresH2O shared a desire to advance greenhouse agriculture and to bring more fresh, local and sustainably grown produce to consumers across the country.”

Ultimately Gotham hopes to achieve a geographic reach that enables it to serve 90% of U.S. consumers with fresh produce delivered “within a day’s drive” from any of its greenhouses. That goal is coming into view after over a decade of operations which began with a rooftop indoor farm in Brooklyn, later expanding with a second Brooklyn greenhouse, operating above and supplying the Whole Foods store below. The company now operates indoor farms in Illinois, Rhode Island, Maryland, Virginia, Colorado and California.

While Gotham’s portfolio consists primarily of various salad greens, the company also sells a line of dips and dressings, which will see a line extension later this month. Its current lineup includes three pesto varieties, chimichurri, lemon basil and green goddess dressing, as well as conventional and plant-based caesar and ranch dressings. Gotham Greens’ products are sold at over 3,000 grocery stores nationwide including Whole Foods, Kroger, Albertsons, Sprouts Farmers Market, The Fresh Market, AmazonFresh and FreshDirect, among others.

“The Gotham Greens management team has a demonstrated track record of successful execution, having developed a distributed network of greenhouse facilities with near national reach while producing positive facility level unit economics, a key differentiator in the indoor farming space,” said Marc Khouzami, managing director of BMO Impact Investment Fund, in a press release. “BMO IIF is excited to be partnering with Gotham Greens on the next stage of the company’s growth, as they continue to expand their market share and solidify their position as a leading indoor farming operator.”

This capital will give Gotham a substantial leg up, but the brand still faces competition. Roughly two months ago Cox Enterprises announced a “significant” investment in Mucci Farms, a producer of indoor grown fruits and vegetables, and last year acquired producer Brightfarms. Other players in the space include Square Roots and Little Leaf Farms, the latter of which recently announced the close of a $300 million round.