DEEP DIVE

Future Proofing the Food Supply with Plenty

Masa Son, Bezos, and a Billion in Venture Dollars

Plenty is a vertical farming company that’s raised a billion dollars. Not valued at a billion dollars like a run-of-the-mill unicorn, Plenty has raised $941 million.

I know raising a billion dollars isn’t terribly uncommon for late stage companies. Chime and Stripe have both raised $2.2B, Instacart $2.9B, GoPuff and Databricks $3.5B each – but playing in the early stage sandbox it’s hard for me to contemplate numbers that big. More importantly, I’ve heard of all of those other companies and you probably have too. I’d never heard of Plenty.

But Jeff Bezos has.

Masa Son and SoftBank’s Vision Fund have poured $340M into the company. Jeff Bezos invested via Bezos Expeditions. NFX’s Peter Flint led the Seed way back in 2016. In January 2022 Plenty raised another $400M.

Which made me wonder, what mission and what market is massive enough to justify Bezos and Masa Son scale returns?

I interviewed Plenty Cofounder and Chief Science Officer Nate Storey to find out. It did not disappoint.

What is Plenty?

Plenty’s mission is to future proof the world’s food supply by transforming how humans farm. Armed with cutting-edge plant science and modern manufacturing best practices, they’re reimagining farming from the ground up, and possibly – creating new farming capacity to feed more people around the globe and fend off a warming climate.

Plenty’s Business Today:

• 60+ farms in the SF Bay Area
• Sells produce into ~50 grocery stores in the Bay
• Is building the world’s largest indoor farm in Compton, CA
• Plans to scale Plenty produce into 400 new grocery stores in the Los Angeles area once the Compton farm is complete

The business model is interesting. Plenty is both building new kinds of farms and also selling produce direct to consumer through grocery stores.

If you live in LA there’s a good chance you’ll see Plenty spinach and kale in your local grocery stores in the next 12 months. Then once they’re proven, they plan to sell farms to franchisees.

Into the Greenhouse

Farming Metrics

When a young Nate Storey was just a PhD student at the University of Wyoming he was studying greenhouses. And there was one problem he couldn’t get over, what he calls an accounting error.

Productivity in a greenhouse is accounted for on a square-meter basis but the inputs are all volumetric. To heat a greenhouse in the winter, cool it in the summer, or maintain moisture levels year round, you need to fill a whole room.

Which set young, then PhD student Nate Storey thinking: What about a greenhouse that used every square inch of that space? Volumetric production to match volumetric inputs.

Can you build a photon trap? A machine that captures every iota of light inside the leaves of crops to maximize photosynthesis, growth, and ultimately, crop yield?

The answer is yes. Today Plenty’s farms look like this:

Vertical planes that grow leafy greens like a cliff face covered in vegetation. Half factory, half bioreactor and a fully controlled system.

Cost Curves: Compounding Technology

The boldest claim Nate made was that Plenty puts agriculture on a technology-esque cost curve.

The idea is Plenty’s farms will get increasingly efficient, produce more and more crops with fewer and fewer inputs. Like televisions or semiconductors or computers. Increased output for lower costs. Decade after decade.

Fun Fact: You iPhone has about 100,000 times more processing power than the computers Apollo astronauts had on the first missions to the moon. Something to consider while you’re scrolling TikTok

If Plenty can do that for agriculture, in a factory in the suburbs, just miles from where those crops will be consumed, the impact could be massive.

But claims about cost curves have been made before by non-tech businesses. WeWork turned out to be a real estate business.

So what does Plenty have going for it?

Nate broke it down into two drivers: Inputs + R&D

Inputs: First, a lot of Plenty’s technology inputs are already on a cost curve. LEDs, data storage, sensors, robotics. Every one of those things is becoming cheaper and cheaper at a breakneck pace. If those are the raw materials needed to to build a Plenty farm – light, sensors, and robots – they can bet on cheaper inputs over the next 50 years.

R&D: Second is Plenty’s R&D. As Nate pointed out, vertical indoor farming is a nascent industry. There’s huge amount of white space to improve on these farms over time.

Plenty’s process, how they integrate technologies like LEDs and robotics, into a farm is a piece of it, but they’re also developing some new technologies from scratch and building unique software to run the farm. All of which can boost crop yield.

And you can never underestimate returns to scale. Operating like factories means they’ll become increasingly efficient as they get larger.

📈 Returns to Scale + Technology Breakthroughs = Increased Crop Yields

So yeah the cost curves look pretty good.

Manufacturing Land

Ag has always been an energy and real estate business. Plenty is changing that.

We’re not a farming business necessarily. We’re a real estate business. Because what we’re doing is we’re using technology to manufacture land, to manufacture capacity.

Nate Storey, CSO at Plenty

Today, the number of places where you can make a profit growing fresh fruits and vegetables is shrinking. California’s Central Valley has always been ideal for farming. Unending drought is changing that calculus. Costs are rising and as Nate said: “They’re not getting more water.”

It’s into that market that Plenty’s launching a way to scale the farm-able land we have available. Technology to ‘manufacture land’ closer to where it’s consumed than ever before.

We’re removing all of the geographic and environmental constraints on production.

So what exactly does Plenty need to build a farm? Water, people, and power.

And since water and fertilizer inputs are pretty low, mostly people and power. As for where these can be built, the sky’s the limit.

Vision

My last question for everyone on the show is about vision. Nate gave this answer off the cuff:

In 10 years we’ll be a business that has many, many farms out in the world. We need to fill a gap that’s roughly the equivalent to double the current size of the fresh fruit and vegetable industry.

I think within 20 or 30 years, we’ll be moving into crops that are fairly unthinkable today just given the cost curve and where it’s pointing us. So think field crops, think about de-risking parts of the world that are super dependent on food pricing and food pricing stability.

I think we’ll be in crops outside of the food world. We’ll be engaged in the manufacturing of novel proteins, medical proteins, pharmaceutical manufacturing and a number of other industrial and food ingredients.

Plenty is everything you want in a startup story, revolutionary new technology born from unremarkable component parts, an ambitious business model, a ridiculously grand vision, and a fair chance of bringing it to life.