(Bloomberg) -- Plenty Unlimited Inc., a pioneer of vertical farming that’s drawn backing from billionaires including Jeff Bezos, is in talks for a new funding round that will virtually wipe out existing stockholders, according to a person familiar with the matter.
Plenty, which has brought in almost $1 billion from investors like Eric Schmidt and SoftBank Group Corp., is in talks to raise another $125 million as part of the recapitalization, according to people familiar with the matter. The new deal would value the company’s existing shares at less than $15 million, one person said. Previously, investors had valued Plenty at $1.9 billion, according to PitchBook.
The company declined to comment on the deal.
In recent weeks, Plenty has installed an interim chief executive officer after the exit of Arama Kukutai, said one of the people, who asked not to be identified discussing private information. The new acting CEO is Daniel Malech, previously the company’s senior vice president of strategy and general counsel.
At the same time, the company is undergoing a broader strategy shift. Instead of growing a variety of fruits and vegetables, Plenty will focus on strawberries, which yield higher profits.
Kukutai and Malech did not respond to requests for comment.
New York investment firm One Madison Group is expected to lead the new financing. SoftBank’s Vision Fund, a longtime Plenty investor that’s funneled over $400 million into the company, is also in talks to participate, said the people, as is Walmart Inc. The financing is not yet completed and could still fall apart, they added.
SoftBank and Walmart declined to comment. One Madison Group did not respond to requests for comment.
Plenty’s shifting strategy reflects larger struggles for the once-promising indoor farming industry. The news comes just months after Bowery Farming, previously valued at $2.3 billion, halted operations, according to reports. Before that, companies including AeroFarms, Kalera and AppHarvest all filed for bankruptcy.
Plenty has been a leader in the indoor farming world, which aims to use less land and water to grow food while avoiding the impacts of climate-induced extreme weather. Founded a decade ago, it has attracted a star-studded list of billionaire backers as well as investments from corporations like Driscoll’s Inc.
In 2022, Plenty raised $400 million in a Series E funding round, according to financial data provider PitchBook. The same year, Plenty said it would build the world’s largest indoor farming facility — a series of towers across a 120-acre campus in Virginia, with robotic-assisted harvesting. The $300 million facility was designed to grow multiple crops, including leafy greens and tomatoes, the company said.
But last year, Plenty tried to raise a new funding round that failed to come together, according to one of the people.
Now, Plenty is shifting its focus to growing exclusively strawberries, which can be sold at high prices year-round. In December, it also said it would shutter its leafy vegetable factory in Compton, California, citing the rising costs of doing business in the state. “Closing this chapter was not a decision we made lightly, but it was a necessary step as we shift our focus to strawberries,” the company said in a LinkedIn post.
Plenty has also partnered with a unit of United Arab Emirates’ Alpha Dhabi Holding PJSC to develop Abu Dhabi’s first indoor vertical farm at a cost of over 500 million dirhams ($136 million). The farm will aim to produce more than 2 million kilograms of strawberries annually from 2026.
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