US-based urban agriculture company BrightFarms closed an oversubscribed $2.4m tranche of financing yesterday, enabling it to complete a $7.4m series B round.
Private equity firm WP Global Partners led the round, which also included Emil Capital Partners, the US venture unit owned by Germany-based retailer Tengelmann, and venture capital firm NGEN Partners, as well as additional private investors.
Founded in 2011, the year when it secured $4.3m in a series A round also backed by Emil and NGEN, BrightFarms aims to build a network of locally-operating greenhouse farms that can supply produce to local supermarkets and food sellers.
BrightFarms sells the food to the retailers through fixed-price, maximum volume ‘produce purchase agreements’ similar to the contracts used in the renewable energy market.
Like those businesses, BrightFarms seeks to secure external project finance for each farm, and it has so far built up a $100m backlog of projects since formation.