Why we invested in AppHarvest

AppHarvest is one of the most ambitious, inspiring, and important companies in the Breyer Capital portfolio.

In 2019, the UN projected that the world will need 50% more food by 2050. Christopher Flavelle covered the report for the New York Times, writing, “The world’s land and water resources are being exploited at unprecedented rates… which combined with climate change, is putting dire pressure on the ability of humanity to feed itself.”

With 70% of the earth’s fresh water already dedicated to agriculture, if we don’t find a better way to grow our food, the time will come when we won’t have enough.

While projections like these are terrifying, AppHarvest gives us hope.

AppHarvest is a developer and operator of tech-enabled large-scale indoor farms. Their first greenhouse was completed this year. It is located in Morehead, Kentucky and at 60 acres is the largest indoor farm in the United States. We could not be prouder of the team’s ability to follow-through on their plans and build on schedule, especially considering the challenges and tribulations of 2020.

We first learned about AppHarvest in 2018. Our friends Steve Case and JD Vance had already invested through Revolution’s Rise of the Rest fund and they told us that the company planned to build tech-enabled greenhouses throughout Appalachia. While the idea was potentially complex, we admired the vision and approach. In the weeks and months to come, my sons and I got to know AppHarvest’s Founder and CEO Jonathan Webb and share in his enthusiasm.

One of the things that we admire most about Jonathan is his unwavering commitment to local impact. Jonathan was born and raised in Kentucky and wants to bring jobs and innovation to his home state. He envisions that one day Kentucky will be the ag-tech capital of the US. AppHarvest will employ and empower some of the hardest working men and women in our country. The ripple effects in the years to come could be dramatic. Who knows how many AppHarvest employees will go on to start their own companies and choose to do so in Kentucky?

Jonathan and his team’s commitment to sustainability is equally impressive. The AppHarvest greenhouses will only use recycled rainwater, chemical-free growing practices, and low-energy LEDs. Today, most of America’s fresh tomatoes, which AppHarvest is growing, come from Mexico, thousands of miles away. Because AppHarvest’s greenhouses are located in Kentucky, notably within a one day’s drive of 70% of the US population, trucks will use 80% less diesel. Thanks to AppHarvest, the carbon and shipping costs of our fruits and vegetables will be significantly lower.

Lastly, we especially admire Jonathan’s approach to technology. While many ag-tech startups build their own tech, AppHarvest has found ways to partner with some of the best tech companies and institutions. We agree with this approach. The Dutch have shown us that the technology already exists to grow sustainable food at scale. This tech will continue to improve, but in the meantime, why not partner with the best? Breyer Capital will continue to introduce Jonathan to the top people and companies we know in ag-tech. Not only does this collaborative approach seem necessary in the face of such a daunting food security problem, but it will also help AppHarvest reach its financial, social, and environmental goals.

AppHarvest’s recent move to go public through a SPAC was a significant and exciting step. While we’re still early in the AppHarvest journey, the company has already shown an impressive ability to execute on plan and prioritize the right things. We think Jonathan sums up this unique opportunity, and unique moment, perfectly: “In my lifetime,” he told CNBC, “most power will come from renewables, most cars will be run on electricity, [and] most fruits and vegetables in this world at scale are going to be grown indoors and in a controlled environment. We simply do not have a choice.”

Breyer Capital is thrilled to support AppHarvest as they usher in a new era of sustainable change in the agriculture industry.