Local Bounti’s vision to grow is financed in deals totaling $145M

Further proof that not all funding for controlled environment agriculture has dried up, Local Bounti recently confirmed multiple financing streams that will bolster its growth and production plans.

Not only has Local Bounti agreed to a $35 million sale-leaseback with a real estate investment trust, but it also secured $110 million in available financing from Cargill Financial Services. The $145 million total in available funds will support Local Bounti’s plans to scale up production.

“The capital will allow us to run our operations and scale our business as we continue to build our national platform through locally grown facilities,” Brian Cook, president of Local Bounti, told The Packer.

Expanding across the U.S.

What’s more, Cook said, this leaseback is in line with Local Bounti’s growth trajectory and expanding distribution footprint, assuring its partners have access to the freshest locally grown produce.

The Montana-based indoor grower is focused on completing CEA facilities in Georgia, Texas and Washington, but its growth plans don’t stop once these sites are built.

“We are always looking to grow programs with our partners by solving for needs so they may hit their strategic goals,” Cook told The Packer. “Those needs can be regionally, with products, or any number of other situations that if we can solve for, we will.”

In a statement, Local Bounti’s Chief Financial Officer Kathleen Valiasek confirmed that the sale-leaseback and additional funds will finance expanding Local Bounti’s presence across the U.S.  

“This cash, combined with proceeds available from our agreement with Cargill, provide us with over $58 million of capital to fund our operations,” Valiasek said in the release. “We are laser focused on executing our growth plan, further scaling up our operations and delivering locally grown, fresh and delicious produce to consumers across the country.”

The only aspect of Local Bounti’s growth that will wane as the company continues to scale its U.S. network of farm facilities is the presence of its Pete’s brand, acquired in 2022, Cook said.

“As our plan to have a nationally known presence through locally grown facilities continues to take shape, the Pete’s brand will fade to promote to consumers the great values of Local Bounti,” Cook told The Packer.

Proprietary grow technique at the heart of production 

At the heart of Local Bounti’s growth strategy is cultivating its leafy greens using its proprietary “stack and flow technology” method to grow plants indoors.

“In essence, we are combining the best of both growing methods,” Cook said. “In the early phase of the growth cycle, we grow our plantlets to a specific size where the effectiveness of vertical farming peaks. We then introduce the plantlets into the greenhouse for its final growth cycle using reduced resources and Mother Nature to finish.”

The end goal is to increase output and improve unit economics within the greenhouse-grown CEA model. As Local Bounti continues to scale and grow, having a tight production strategy will be key to thriving in additional facilities across the U.S.