Jeff Ubben, the ValueAct founder who has shifted from shareholder activism to socially conscious impact investing, has joined the board of agricultural technology start-up AppHarvest as he seeks out investments in companies focused on the future of food.
The company is building a 60-acre greenhouse in eastern Kentucky where it plans to grow tomatoes and cucumbers using water-efficient, pesticide-free growing methods to distribute to grocers across the US, cutting down reliance on imports and long-distance travel for produce.
ValueAct’s Spring Fund — the impact investing fund launched by Mr Ubben after he handed over the reins of the firm’s main shareholder activist fund two years ago — led AppHarvest’s Series A fundraising on Tuesday. The fund invested $2m to be used for working capital.
It invested along with the start-up’s existing seed investors, Revolution’s Rise of the Rest Seed Fund, led by AOL co-founder Steve Case and author JD Vance. AppHarvest, which was founded in 2017, also raised an $82m investment from Equilibrium Capital’s Controlled Environment Food Funds for construction costs.
A spokesman for AppHarvest declined to comment on the total amount of the fundraising from other investors or the company’s valuation.
Mr Ubben, who has sat on the boards of companies including Twenty-First Century Fox, Willis Towers Watson and Valeant Pharmaceuticals, described the concept as “among the breakout ideas that is needed today”.
“It envisions a fundamental change in how America farms,” he said. “Its goal is to establish Appalachia as a hub for AgTech technology and expertise also has far-reaching positive implications for jobs an education in the region and beyond.”
Mr Ubben joins high-profile investors including the Duke of Westminster, Jeff Bezos, Jack Ma and Viking Global who are piling into the agritech sector as climate change stands to alter how produce is grown and transported and meat is consumed.
Impossible Foods, which is aiming to popularise meat alternatives, raised $300m in its latest funding round last week, led by Temasek of Singapore and Horizons Ventures. The valuation of Beyond Meat, another plant-based meat substitute manufacturer, has soared since it went public three weeks ago.
Mr Ubben, founder and chief executive of San Francisco-based ValueAct, passed on control of the firm’s main fund to his protégé, Mason Morfit, now chief investment officer, in 2017. Since then, he has focused on impact investing by creating the firm’s Spring Fund.
AppHarvest said the produce would use 90 per cent less water than traditional farming, based on a system used in the Netherlands. Its water needs will be met by a 10-acre retention pond and circular irrigation systems.
The facility, which will sit on 366 acres of land, aims to create jobs in Morehead, Kentucky, a depressed area in the foothills of the Appalachian Mountain range where the coal industry once thrived. The town is just over an hour’s drive from Lexington, the state capital, and two hours to Cincinnati, Ohio.
AppHarvest is also seeking to cut down on the US’s reliance on imported produce. It said importing produce can shorten shelf lives because the items are picked before they are ripe and then age aged while they travel on trucks. The proximity could also reduce the time and energy cost of travel.
The start-up’s founder and chief executive, Jonathan Webb, said they are “building a Farming Now movement using proven technology to grow more fresh food with far less resources.”
“Eastern Kentucky is mobilising to lead the real food revolution and become the AgTech capital of America,” he said.
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