Bowery raises $7.5m to solve global food and water shortage. Fingers crossed it's not secretly evil!
Last week I got a pitch about an indoor farming company called Bowery that has raised funding. After explaining a bit about the company, it ended with asking “Can I interest you in a chat?”
In a Proustian moment I was taken back to the good ol’ days, before the bros, before the unicorns and decacorns, before Facebook, Apple and Google were all vying to become the first $1 trillion dollar company, before the world got evil and tech marched right along with it. Before I knew that heroes of our industry colluded to illegally suppress wages of their workers-- the very people who they claim represent their greatest asset. Before Pixar was embroiled in a similar scandal to suppress the wages of animation workers. Fucking Buzz and Woody! Back when I was friends with Peter Thiel. When I thought Travis Kalanick was only harmlessly douchey. When I looked up to the feminist stance Sheryl Sandberg took without reservation. When I knew what the fuck Mark Zuckerberg stood for.
You know, the good ol’ days when I could just fucking write about startups. When I could give tech and venture capitalists and founders the benefit of the doubt. And when that was a contrarian position.
God, I miss those days.
In that Proustian haze, I wrote back: “I would like to talk to him.”
Fuck yes. What could be evil about farming?
And so I got on the phone with co-founder Irving Fain, who has raised $7.5 million lead by First Round Capital, with funding from Box Group, Lerer Hippeau Ventures, and Top Chef star Tom Colicchio among others to revolutionize and scale urban farming.
They call it “post-organic” because the plants are grown indoors, hydroponically with absolutely no pesticides. “Post-organic” sounds a little buzz-wordy but, hey, it’s better than “DISRUPTION!” It’s a sign, yes, that tech and venture capital truly wants to disrupt the oldest industries on earth. And of the two, agriculture is the decidedly less sexy one.
But given the complaints that tech doesn’t tackle the big problems, are we so jaded that that is necessarily that a bad thing?
If you want to go back to those days, when pure startup stories were what we did, enjoy the following Q&A about how Fain got here, how a vertically-integrated farming company can also be “eaten” by software, and….. Seriously, is there something evil that could come of this?
Sarah Lacy: Tell me about your history.
Irving Fain: Before this I built an enterprise software company here in New York City, a venture-backed company. I was also on the team that built iHeartRadio as part of Clear Channel. I’ve been an entrepreneur since I was a young kid, the kid on the playground who bought plastic animals for a dime and was selling them for a quarter. I’m a firm believer in the innovation economy and tech’s ability to solve difficult problems.
But I’ve never done a farming company before.
Coming out of [marketing and communications software] I wanted to work on something more important to me personally, and that could impact a larger set of people. You start looking at agriculture, and it’s at the epicenter of a number of global problems: Health, food quality, food access, environmental degradation.
Agriculture is 70% of global water supply, and we in the United States use 700 million pounds of pesticides a year. You can see the destruction from the industrialization of farming.
By 2050, we need between 50%-70% more food to feed the population of the world. We are going to get there by moving lots of levers. We waste up to 40% of food. We probably need to eat less meat. We need to increase the yields in developing countries. The current farming methods are not going to get us there.
And while we this was all happening 70%-80% of the world’s population is going to be living in and around cities. How do you provide fresh food in a way that is more self-sufficient and sustainable?
The one thing every city has is a plethora of open indoor spaces.
There’s been another exciting trend with indoor lighting. Lights have been used to grow food for some time, but lights were expensive and inefficient. LEDs are more energy efficient and the price structure has completely changed. They’ve come down substantially and the efficiency has more than doubled. What was only done in labs before can be done profitably now.
SL: Yeah, but I’ve been reading about “urban farming” for a while now. What’s different about your approach?
IF: Urban farming and indoor farming have been popular and there are a lot of derivations within that category.
The first thing is we built the system from scratch. We grow hydroponically, with the plants floating in water and roots hanging down. They are getting exact amount of water and nutrients they need. Overall the farm is a completely controlled environment. That allows us to grow 365 days a year, independent of weather and seasonality. Just the elimination of volatility is a big problem solved. And it means we can grow with no pesticides and agrochemicals at all.
We are 100x more productive, we are growing more crop cycles, we are growing twice as fast, plus we have more yields every crop cycle.
We employed a lot of automation. We are not the first people to grow hydroponically. But we built our own hardware and software system.
A lot of automation creates efficiencies to drive our operating expenses down. We’ve built what we call “the farm operating system.” It’s the brains of our farms, taking in all this data in real time, looking at the plants themselves and understanding the health of the plants, the quality of the plants, the growth rates of the plants, and it looks at all of that data to see what is working and what isn’t and what adjustments can we make. Our system can make adjustments in real time.
We can make healthier crops and higher yielding crops and can even change the taste variables. Can we make a mustard green spicier?
SL: Ok, so what is the actual business plan though? Just building farms everywhere or is it ultimately a software play?
IF: We are totally vertically integrated, building our own farms and growing and selling produce. That allows us to ensure [the crops] are getting maximum care. We are not planning to sell or license the technology. We plan to operate our own farms in cities around the country and countries around the world.
SL: What was your experience like fundraising?
IF: Well, this was not your traditional VC deal, but I had a lot of interest from the seed round, which we raised a while ago. I wanted to build the farm and the software and the team. We spent over a year researching the technology, validating our assumptions, so that when we took money from people, we felt confident would work.
So we were able to go in with a high degree of confidence. We were really fortunate to be working on a problem a lot of people care about personally, and they also understood the technology we were using to solve the problem.
SL: Ok, I have to ask because it’s 2017, if you should succeed wildly, what is the unanticipated evil thing that your company winds up doing? Because everyone seems to have an evil ripple effect in tech now. We didn’t expect it from Twitter and Facebook. But it’s there. So what’s yours? Do you wind up screwing over local farmers? Putting them out of work? Making their lives harder?
IF: We are big believers in local farming and organic farming. We aren’t focused on them, if we succeed we will take a dent out of industrialized agriculture. Fortunately there are so many people that demand outstrips the supply the supply. It’s not a displacement. The demand is going up.
SL: You say you won’t hurt the local farmer or the organic farmer, but how do you actually know that? How do you know you only hurt the large industrialized farmer?
IF: Right now we are able to be price competitive with field grown products who are on the shelf at stores, not selling in farmers markets, for instance. Also organic farming is on a growth tear and has been for a while.
Really, it’s supply that needs to catch up to demand. People are looking for more high quality product, locally grown and the industrial, large-scale players can’t fill that.
[EDITOR’S NOTE: We are going to hold you to that!]