July 20, 2024
Plenty, a U.S. vertical farming startup, is partnering with Mawarid, a part of Alpha Dhabi. They are forming a $680 million joint venture to create indoor farms in the Middle East.
They plan to build five farms in the next five years. The first farm, funded by a $130 million investment, will be in Abu Dhabi. Construction starts early next year, and it should be running by 2026.
This farm aims to produce over 4.5 million pounds of strawberries each year for local use and export within Gulf countries. Some funding comes from a local bank, which is unusual for this industry.
Indoor farms use less water and grow food closer to where it’s consumed, making them more sustainable. However, high building costs have made it hard to scale up production. Funding for indoor farming has dropped since its peak in 2021.
Arama Kukutai, CEO of Plenty, said they aim for returns above 20%, which is higher than traditional farming. The UAE farm’s strawberry production is already pre-sold to Driscoll’s, a major berry company.
The indoor farming sector is looking for new financial sources to grow. In early 2022, Plenty raised $400 million, valuing the company at $1.43 billion. So far, they have raised over $940 million from investors like Softbank and Walmart.
Kashif Shamsi, CEO of Mawarid, said they aim to improve food security in the UAE. They want to address the issues of scarce land and water and adapt to different crops if needed.