- Soli Organic has raised $125 million in Series D funding to expand its indoor soil-based vertical farming operation across the US.
- Climate-focused global investment group CDPQ led the round, which Soli Organic says “signals the sustained and immense confidence in the Soli Organic model.”
- European investment firm Movendo Capital, B.V. also participated, along with existing investors S2G Ventures, Cascade Asset Management Company and XPV Water Partners.
- Funding will support construction of additional Soli Organic controlled environment farms “in strategic locations” around the US.
On background:
Founded in 1989 as Shenandoah Growers, Virginia-based Soli Organic holds roughly 35% of the market for organic culinary herbs. In recent years, the company has transitioned many of its outdoor growing systems to vertical farming environments indoors.
- Soli Organic uses a soil-based system for these vertical farms. This is a major differentiator from most other vertical farming companies nowadays that grow produce via soil-less hydroponic systems.
- CEO Matt Ryan tells AFN the soil-based system is part of the reason the company received this round of funding. “The cost we were able to prove was 30% less growing inside in soil versus growing in the field,” he says. “There’s no way that we’ve seen anything like that from hydroponics out there.”
- Soli Organic currently operates seven growing facilities around the US.
- It provides greens to more than 20,000 retail stores nationwide. Customers include major retailers like Kroger, Target, Walmart and Whole Foods.
Why it matters:
Soil-based vertical farming has several benefits over hydroponics, according to Ryan. “Growing in soil indoors is frankly harder to do but the benefits are twofold,” he says.
Cost is the major one. “It seems counterintuitive, but you have to think about how plants grow when they grow in soil. The plant puts its energy into growing a useful green product on top instead of root balls [common with hydroponic farming]. As a result, all the energy and resource use goes into the actual sellable part of the product.”
Growing plants with hydroponics often requires less space, and Ryan admits that water is harder to move around a facility with soil. However, a soil-based system has to contend less with plant-borne illnesses than hydroponic systems, he says. For example, one reason spinach is so difficult to grow hydroponically is its susceptibility to a water-borne pathogen that attacks the plant’s roots.
Reduced carbon footprint is another benefit, he says. “We literally build our own [fertilizer] carbon-free by taking waste streams and turning them into fertilizer. That’s our secret sauce. And the plants themselves sequester carbon.”
It’s this soil-based growing that also allows Soli Organic to grow a consistent product, says Ryan, whose past includes time at Starbucks and Disney.
“[Product consistency] happens in the entertainment business and with every other category, where somebody figures out how to deliver something consistently that’s relevant and differentiated. It’s never been done in produce before,” he says. Part of the reason he transitioned to Soli Organics was to bring his experience building this product consistency to the produce category. In doing so, the Soli Organic model becomes attractive to investors.
Future growth:
The Series D funding will support growth towards a total of 15 farms across the US. Ryan says the company will shift “a large portion” of its growing to these indoor vertical farms next year. Within two years, Soli Organic plans for the vast majority of its produce to be grown inside these soil-based indoor systems.
Farms are planned for the Mid-Atlantic, Southeast, and Pacific Northwest regions. Soli Organic is currently identifying sites for its next farms in the Midwest and Northeast.
Eventually, the company plans to grow crops besides leafy greens and herbs, though for now it will continue to focus on those core crops. Without naming specific plants, Ryan says Soli Organic is considering other crops in its “three to five-year plan.”
“We’re not going to be growing banana trees or anything like that, but there are a number of crops that are completely addressable by our technology because basically anything that can grow in soil can grow in our indoor facilities.”
