Investors back Soli Organic expansion with $125M in funding

Negotiating Strategy.
Negotiating Strategy.
(Photo: Wutzkoh. Adobe Stock Photo. )

Virginia-based organic culinary herb-grower Soli Organic secured nearly $125 million in funding to expand operations and build additional controlled environment farming operations. Combined with a recent $120 million financing arrangement with Decennial Group and $50 million in venture debt financing from Horizon Technology Finance and Bridge Bank, new funds will support construction of additional modern, high-tech controlled environment farms in new U.S. locations and support additional scaling of technology and operations, according to a news release.

"We believe that Soli Organic is one of the most promising companies in indoor farming. With transformational soil-based growing technology, the company has solved for the quality, affordability and crop diversity issues that challenge others in this space, all while being organic," Sanjeev Krishnan, chief investment officer and managing director at S2G Ventures and member of the Soli Organic board of directors, said in the release.

The Series D funding round that totaled nearly $125 million was led by global investment group CDPQ, with leading European investment firm Movendo Capital. B.V. also joining the round, along with follow-on investment from existing investors S2G Ventures, Cascade Asset Management Company and XPV Water Partners. Goldman Sachs & Co. LLC acted as the exclusive placement agent for Soli Organic.

"For returning investors, Soli Organic offers a track record of strong performance — buoyed by effective and creative leadership and a relentless focus on unit economics as the company continues to scale — all while offering considerable ESG benefits for investors and others seeking to reduce the impact of the food system and boost access to healthy food options," Krishnan said.

Focused on achieving the best possible unit economics, Soli Organic has relied on very little venture funding to date and instead is reinvesting profits into technology development in pursuit of price parity with field-grown organic produce. Soli Organic recently launched its Indolce basil product, priced at nearly a dollar less per ounce, on average, than field-grown organic produce, one of many new comparably priced products the company will roll out in the near future. 

"With our legacy in retail, we were particularly impressed by the superior quality and unique flavor profiles of Soli Organic's products, key differentiators as the company seeks to build a brand in a new frontier: the produce aisle," Pedro Pereira Gonçalves, CEO of Movendo Capital, B.V., said in the release. "The company has nailed the consumer proposition with top quality products at mass market prices. Soli Organic also solves for the critical needs of retailers, offering fresher, reliably available products and supporting surety of supply despite the challenges posed by climate change. We are excited to partner with Soli Organic as they continue to scale and bring additional offerings to consumers and retailers."

Strategic venture funding through this round will enable the build-out of additional large, high-tech, soil-based indoor farms that will transform Soli Organic’s nationwide production footprint. Soli Organic’s expansion plans include a total of 15 farms in locations throughout the U.S, including high-tech facilities in the Mid-Atlantic, Southeast and Pacific Northwest, as well as several smaller, early generation facilities currently in production. Soli Organic is also in the process of identifying sites for its next farms in the Midwest and Northeast.

"Throughout our 30-year history, first in organic field agriculture and now as a leading indoor organic farming company, Soli Organic's North Star has always been what consumers care most about: organic, flavor, quality, freshness and affordability," Matt Ryan, CEO of Soli Organic, said in the release. "Our unique technology advantage enables us to offer a superior consumer proposition. Growing indoors in soil confers both high quality and better unit economics, breaking the paradigm that organic food must cost more. We're excited to work alongside world-class partners like CDPQ, Movendo Capital and returning investors to bring our products to more consumers across the country."

 

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