Almost two years after emerging from bankruptcy, US vertical-farming business AeroFarms has raised new funds to support construction of a second facility.
AeroFarms, which supplies microgreens grown in a controlled indoor environment to the retail channel, said in a statement it has refinanced its debt to “support” ongoing operations at its Danville site in Virginia.
In addition, the New Jersey-based company said it has raised new equity financing to fund pre-construction activities for its new farm, the location of which was not identified in the statement.
Molly Montgomery joined AeroFarms as executive chair and CEO when the company surfaced from bankruptcy in September 2023. When it entered Chapter 11 in June of that year the business said it had “faced significant industry and capital-market headwinds”.
The capital-intensive vertical-farming industry has encountered challenges around fund raising and scaling, with many corporate participants struggling to gain profitability. Many have gone out of business.
Montgomery was (and still is) a partner at agri-food investor Grosvenor Food & AgTech (GFA) when she took on the CEO role at AeroFarms, which was one of the company's existing investors, along with Doha Venture Capital. They were both part of an “asset purchase agreement” in the bankruptcy resolution.
GFA, as well as Ingka Investments, Cibus Capital, ACEG, and others, have now provided the new equity financing.
“We have recently demonstrated that vertical farming can indeed be sustainable, profitable, and produce fresh greens at scale,” Montgomery said in the statement.
“Our vision is to provide local food production of nutritious microgreens to regions around the world, while preserving natural resources.”
AeroFarms said an asset-based loan from Siguler Guff was utilised to fully repay a previous debt facility from Horizon Technology Finance.
The new loan offers a “more favourable interest rate”, interest-only terms, and a carve-out for eligible equipment financing, the group said.
Montgomery extended “gratitude” to the financial partners who “provided financing to support our operation in Danville and commencement of pre-construction activities for expansion to a second farm”.
Before Chapter 11, AeroFarms also operated another facility in Newark, New Jersey. Just Food has asked the company to confirm what happened to that site and for more details on the location and investment outlay for the new plant.
Meanwhile, Stephan Dolezalek, a managing partner of GFA, said in the statement: “We believe AeroFarms can play a significant role in the global fresh food supply chain, by providing nutritious greens at scale to local regions around the world.
