Plenty's Struggles: Vertical Farming Pioneer Faces Drastic Valuation Cut and Strategic Shift

Plenty Unlimited Inc. Faces Dramatic Funding Challenges

Plenty Unlimited Inc., a leader in vertical farming backed by notable investors like Jeff Bezos, is currently negotiating a new funding round that may significantly diminish the value of existing stockholders. According to insiders, this funding round could wipe out most of the current shareholders.

New Funding Round Details

The company is seeking to raise $125 million as part of its recapitalization efforts, despite having already attracted nearly $1 billion from investors including Eric Schmidt and SoftBank Group Corp. The proposed funding would value Plenty’s existing shares at under $15 million, a drastic drop from its previous valuation of $1.9 billion recorded by PitchBook.

Leadership Changes and Strategic Shift

Recently, Plenty appointed Daniel Malech as the interim CEO following the departure of Arama Kukutai. Malech previously served as the company's senior vice president of strategy and general counsel. The company is also shifting its operational focus; instead of cultivating a wide range of crops, it will now concentrate on strawberries, which are expected to yield higher profits.

Broader Industry Context

This move comes in the wake of a challenging environment for the indoor farming sector, with several companies, including Bowery Farming, having ceased operations or filed for bankruptcy. Plenty's new financing is expected to be led by One Madison Group, with participation discussions ongoing with SoftBank’s Vision Fund and Walmart Inc. However, the completion of this financing is not guaranteed.

Conclusion

Plenty's shift in strategy underscores the growing difficulties faced by the indoor farming industry, which aims to provide sustainable food solutions amid climate challenges. Founded a decade ago, Plenty has garnered significant attention and investment but must now navigate these turbulent waters to secure its future.