U.S. Vertical Farming Startup Plenty Announces $680 Million Joint Venture with UAE's Mawarid 

Source: Reuters

Plenty, a leading U.S. vertical farming startup, has entered into a significant joint venture with Mawarid, a subsidiary of Alpha Dhabi Holding. This $680 million partnership aims to establish a network of indoor farms across the Middle East, starting with an initial investment of around $130 million to build an indoor farm in Abu Dhabi. The project is set to commence early next year and is expected to be operational by 2026.

The Abu Dhabi farm will focus on producing over 4.5 million pounds of premium strawberries annually, catering to local consumption and export demands within Gulf Cooperation Council member countries. Notably, a portion of the financing for this venture is sourced from local bank debt, highlighting a unique funding approach in the capital-intensive indoor farming sector.

Vertical farming, which involves growing crops in controlled indoor environments, is recognized for its sustainability benefits, including reduced water usage and proximity to consumption points. Despite its potential, the high costs of establishing such facilities have hindered widespread adoption. According to PitchBook, funding for indoor farming has significantly decreased, now at just 20% of its 2021 peak.

Arama Kukutai, CEO of San Francisco-based Plenty, emphasized the financial viability of this venture, stating, "We are targeting returns north of 20%, which is significantly higher than traditional agriculture. In that context, we think there's a lot of capital for the space."

The strategic partnership also addresses the UAE's food security goals. Kashif Shamsi, CEO of Mawarid, noted, "We've been looking to bring food security into the UAE. We want to offer a solution that addresses scarce land and water resources and can pivot to different crops if necessary."

Plenty's UAE farm's strawberry production has already been pre-sold to Driscoll's, a dominant player in the regional berry market. This collaboration comes at a time when the indoor farming industry is exploring new financial avenues for sustainable growth. In early 2022, Plenty raised $400 million, achieving a valuation of $1.43 billion. To date, the company has secured over $940 million from prominent investors, including Softbank and Walmart.

This joint venture marks a significant step forward for both Plenty and Mawarid, positioning them at the forefront of sustainable agriculture in the Middle East.