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Sunday Wrap-up: What Happened This Week in Indoor Ag?
Every Sunday, discover a wrap-up of the most important news that highlighted the week.
Good morning readers, this week has been marked by a USD 125M funding round, the acquisition of a company, the performance of certain indoor ag stocks, and the inflation rates still appreciating throughout the largest economies.
This week, soil-based indoor ag company, Soli Organic raised a USD 125M funding round to further its national expansion, and today, urban-gro announced the acquisition of Texas-based DVO to complete its product offering.
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Market Uncertainty Leads Indoor Farming Stocks To Tumble
Indoor Farming Stocks have been severely affected by the current market trend with certain companies flirting with the USD 1.00 per share zone which could lead to them becoming de-listed.
The macroeconomic events, and the speculation money fading away added to the fact that most Indoor Ag companies are yet to beat Earnings per Share estimates or, Revenue estimates constitute a perfect cocktail for their shares to plunge.
This led certain companies to plunge by over 80% in the past 3 months reaching all-time lows despite encouraging announcements with the opening of new facilities, new partnerships furthering their retail presence, and better performances compared to previous quarters.
As the earning season edges closer, we decided to give you a good overview of the current market trend as well as the recent announcements made by these companies.
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This Week in Indoor Ag: A USD 125M Funding Round & an Acquisition
Soli Organic Inc. has announced the close of a Series D funding round totaling nearly USD 125 million. The round was led by global investment group CDPQ, with leading European investment firm Movendo Capital, B.V. also joining the round, along with follow-on investment from existing investors S2G Ventures, Cascade Asset Management Company, and XPV Water Partners. Goldman Sachs & Co. LLC acted as the exclusive placement agent for Soli Organic.
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A proven performer focused on achieving the best possible unit economics, Soli Organic has relied on very little venture funding to date, instead reinvesting profits into technology development in pursuit of price parity with field-grown organic produce. Soli Organic recently unveiled ‘Indolce’ basil, priced at nearly a dollar less per ounce on average than field-grown organic produce, one of many new comparably priced products the Company will roll out in the near future.
Strategic venture funding through this round will fund the continued build-out of additional large, high-tech, soil-based indoor farms that will transform the Company’s nationwide production footprint. The Company plans to have a total of 15 farms in strategic locations nationwide, including high-tech facilities in the Mid-Atlantic, Southeast, and Pacific Northwest and other forthcoming locations, as well as several smaller, early-generation facilities currently in production. The Company is also in the process of identifying sites for its next farms in the Midwest and Northeast.
“Throughout our 30-year history, first in organic field agriculture and now as a leading indoor organic farming company, Soli Organic’s north star has always been what consumers care most about: organic, flavor, quality, freshness, and affordability,” said Matt Ryan, Chief Executive Officer (CEO) of Soli Organic. “Our unique technology advantage enables us to offer a superior consumer proposition. Growing indoors in soil confers both high quality and better unit economics, breaking the paradigm that organic food must cost more. We’re excited to work alongside world-class partners like CDPQ, Movendo Capital, and returning investors to bring our products to more consumers across the country.”
Urban-gro UGRO 0.00%↑ announced it has signed a binding letter of intent to acquire Dawson Van Orden, Inc, a world-class engineering firm with significant experience in indoor CEA.
In addition to mechanical, electrical, and plumbing engineering services, the acquisition of the 24-person, Texas-based firm will add fire protection engineering expertise and further urban-gro’s industrial architecture capabilities. The enhancement of these offerings is expected to create new opportunities and build upon DVO’s existing contracts and clients in the indoor CEA and industrial sectors.
Bradley Nattrass, Chairman, and CEO of urban-gro commented, “The addition of DVO represents an extraordinary opportunity to add depth and breadth of indoor CEA engineering expertise to our professional services offering. While this accretive and synergistic transaction increases our professional services revenues and margins along with future opportunities to leverage their existing clients, it also immediately adds a deep bench of talent and an engineering leadership structure to scale and meet the rising demand for our turnkey design-build solutions. Furthermore, I’m excited about the opportunity to continue strengthening our presence in Texas, as we expect the state to be an influential future business opportunity as Cannabis legalization is considered.”
The Company will fund the USD 7.25 million transactions, which includes a contingent consideration of up to USD 1.1 million paid in cash or equity at the Company’s discretion, through a combination of USD 1.3 million in cash, a seller’s note of USD 3.8 million paid out over four quarters, and USD 1.1 million of UGRO common stock at a pre-set price of USD 4 per share. DVO generated approximately USD 5.5 million of revenue and greater than 20% EBITDA in the trailing twelve-month period that ended September 30, 2022.
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Articles That We Read
IS COLD PLASMA THE NEXT BIG TECHNOLOGY BREAKTHROUGH IN INDOOR AG? - Article by Agritecture
Going For Gold in the GCC: the latest food and agtech trends in the gulf - Report by FoodHack
Precision Farming - What’s Next? - Article By ForwardFooding
The Bountiful Promise of Indoor Farming -Article by IFT.org