By Jane Lanhee Lee

(Reuters) – New York-based indoor vertical farming startup Bowery Farming said on Tuesday it raised $300 million in its latest funding round, valuing the company at $2.3 billion as the pandemic shed light on the importance of securing local food supply.

Vertical farming grows its produce in stacked arrangements in technologically controlled environments, reducing the need for vast expanses of land and bringing mass production right in to urban areas.

While the new industry has struggled to break even in the past, the drop in technology costs, such as LED lights, is changing the economics and fueling investor interest.

According to PitchBook data, nearly $1.9 billion of global venture capital was invested in indoor farming in 2020, nearly tripling investment in 2019.

Graphic: Global VC Funding in Indoor Farming, https://graphics.reuters.com/AGRICULTURE-INDOORFARMING/FUNDING/xegpbdgzjpq/chart.png

Bowery’s latest funding round, led by Fidelity Management & Research Company LLC, would be the largest vertical farming deal on record, based on previous such deals listed by PitchBook.

The company’s leafy greens are sold in 850 grocery stores and it has two commercial farms in New Jersey and Maryland, and a third coming on line this year in Pennsylvania, said Irving Fain, Bowery’s CEO and Founder. Fain said the products are the same or lower in price than their organic rivals, but declined to say whether Bowery was selling them at a profit.

“The real benefit of what we’re growing at Bowery is first of all, it’s completely pesticide free,” said Fain, adding that a large part of the power used for the farms is renewable with an aim to eventually make it fully renewable.

He said the new funds will be used to expand farms across the United States, looking for global expansion opportunities, and developing new crops and technology to grow things like strawberries, tomatoes and carrots indoors and near consumers as well.

Bowery’s investors include GV, formerly known as Google Ventures, General Catalyst, GGV Capital and Temasek.

(This story corrects in 6th paragraph location of farm to New Jersey and not New York and increases number of stores to 850)

(Reporting By Jane Lanhee Lee; Editing by Sam Holmes)

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