Currently, less than 1% of fresh produce is grown with hydroponic systems compared to open field farming, but Mordor Intelligence predicts this segment will grow by almost 11% or about $600 million by 2025.
Season five
Near the last steel mill in the impoverished industrial town of Braddock on the Monongahela River, just nine miles from the Pittsburgh American Steel Tower, a vertical farming business is thriving, backed by billionaire Nicholas Pritzker’s Tao Capital as an agtech innovator.
Founded in 2016 as RoBotany by MBA student Austin Webb and created at Carnegie Mellon University, the startup is aiming to disrupt the $60 billion U.S. grocery market. Now dubbed “Season Five” for a more consumer-friendly sound, the growing business is leveraging cutting-edge technology, $75 million in venture capital, expanded distribution, a planned new facility in Columbus, Ohio, and an expanded management team to succeed in a fast-growing vertical. farmer’s market. CEO Webb confidently predicts Fifth Season could become a $15 million business in Pittsburgh over five years and $500 million through geographic expansion plans, and predicts double-digit revenue this year with a $600 increase in revenue. %.
“Our smart manufacturing plant improves the yield, taste and texture of vegetables, and does it with 95% less water, 95% less land and no pesticides or chemicals,” said Webb, 33. Fifth Season’s automated, patented system grows fresh produce year-round indoors in vertical trays, relying on artificial intelligence, robotics and data to manage light, water and nutrients, and harvest leafy greens.
Hydroponics is growing fast as a food source
Currently, less than 1% of fresh food is grown with hydroponic systems compared to open field farming, but Mordor Intelligence predicts this segment will grow by almost 11% per year to be worth about $600 million by 2025. and more reliable operations eliminate risk,” said Brian Holland, managing director of Cowen & Co. in New York. “This is a massive race with potential winners to prove the economics of automated robotic cultivation,” he added. “Season 5 is more advanced, if not the most advanced, on the market, combining technology and robotics to grow vegetables indoors at a lower cost.”
Fifth Season competes in a capital intensive, highly fragmented market with over 2,000 mostly small farms and a few big players. Among the largest is San Francisco-based Plenty Unlimited, which recently secured $400 million in strategic funding from Walmart and plans to sell fresh produce from its Compton facility in the retailer’s California stores. Another big competitor is Newark, NJ-based AeroFarms, which has abandoned its SPAC deal to go public in October 2021 and continues to ramp up capacity at its Danville, Virginia farm.
“Market leadership is simply a function of time and a function of capital,” Webb said.
In an effort to grow its business and keep up with the competition, Fifth Season plans to build its second indoor grow farm in 2023 and is in talks for land in Columbus, Ohio, near the John Glenn Airport. Through a partnership with hummus maker Sabra, in December 2021, the company also introduced a new product line of collaborative takeaway salad sets priced between $6 and $8. Its product distribution is expanding this March to more Giant Eagle outlets, as well as Kroger and ShopRite in 10 states and 1,000 locations, with a goal of reaching 3,000 grocery stores in 2023. In its first year of commercial operation in 2000, about 500,000 pounds of its products were supplied to nearby restaurants and eateries on campus from its 60,000 square feet of floor space on a half acre of land.
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New Arrow Rust Belt
The growth spurt of Fifth Season signals a new era of high technology for the former steel capital. Dozens of regional tech startups are springing up in Pittsburgh and across the former Rust Belt as factory workers move into tech jobs and old industrial cities reboot.
“The tech multiplier doesn’t lift all the boats, but it spreads deep into the outback,” said Congressman Ro Khanna of Silicon Valley, author of Dignity in the Digital Age.
“The factory workers and technicians know how to make things and have extraordinary ethnic work and a sense of community. They challenge past conventions,” he said.
Getting ready to go, Fifth Season expanded its leadership team in January and the number of employees is expected to increase to 100 next year from 80 currently. Finance and technology veteran Brian Griffiths joined the team as CFO of semiconductor company Skorpios Technologies, with experience at Credit Suisse and Guggenheim Partners. Varun Khanna was hired as VP Food from senior positions at Chobani and Sabra. Glenn Wells has joined us as Senior Associate Sales Officer and has previously worked at Quaker Oats, Welch’s and Dole.
Another aspect of its growth strategy is the planned $70 million spending on the new Columbus vertical farm, which is three times the size of the $27 million Braddock plant, including real estate development for land, building and equipment. The company’s highly automated farms require only 35 to 50 production workers. The Pittsburgh plant produces four million servings of lettuce per year, while the larger central plant in Ohio is expected to produce 15 million servings. Fifth Season is working with economic development groups One Columbus and Jobs Ohio at the new location.
Association with Carnegie Mellon
Fifth Season’s groundbreaking business is based on the brainpower of Carnegie Mellon University and Pittsburgh’s Technology Entrepreneurial Cluster in Computer Science, Robotics and Engineering. Webb developed the prototype in his final year of the MBA program and launched the business after graduation with co-founder Austin Lawrence, an environmental scientist and mechanical engineer he met on campus.
The third co-founder, Webb’s brother Braque, is the CTO. He developed the production software. The system was stress tested for two years at a converted steel plant in South Pittsburgh before the Braddock farm went live in 2020.
Webb’s mentor was Dave Mohinney, executive director of the Center for Entrepreneurship. Schwartz CMU, who helped him connect with investors and role models such as serial entrepreneur Louis von Ahn, the Pittsburgh-based founder of Nasdaq-listed education company Duolingo. He also introduced MBA student Grant Vandenbushe, a former General Mills global strategy coordinator who joined the team in 2018 as a business development manager and is now a category director. “Season five is a testament to CMU’s ability to attract very talented youth and develop entrepreneurs through its MBA program,” Mohinni said. “It’s all about the network.”
Season 5 CEO Austin Webb
Season five
Even before its release in 2017, Webb had raised capital from angel investors, most of whom were affiliated with CMU. The network effect also showed up when Mohinni introduced Webb to Columbus-based venture capital firm Drive Capital, which invested $1 million in 2017 and led a $35 million round in 2019 when it came out of stealth mode and changed its name. from RoBotany, and Drive partner Chris Olsen has joined us as a board member.
“Chris pushed us to be market conscious and think broader nationally, not just local or regionally, and build a long-term company and a new product line,” said Vandenbushe.
The $75 million it has raised to date from investors includes not only Tao Capital Partners Pritzker in San Francisco, but eight different groups of investors who have joined them throughout 2021.
“Pittsburgh is coming together as an ecosystem. One of the reasons it’s doubling down is its strengths in artificial intelligence, machine learning, and legacy in the life sciences,” said Keith Muller, who leads RustBuilt’s community networking group and recently became vice president of the cryptoasset. Stronghold Digital Mining in Pittsburgh.
No longer dependent on steel, iron, and rivers as competitive advantages, the city is moving away from the sand industry, and robotics startups are crowding into the so-called Silicon Strip of former warehouses. This mid-sized city of 303,000, less than half its peak population of 677,000 in 1950, has become a testing ground for self-driving technology from Ford-invested Argo AI and Amazon-backed Aurora, as well as Uber’s tech arm. acquired by Aurora. It is also a stronghold for the research labs of Facebook, Apple, Google, Zoom and Intel.
A lingering problem facing Midwestern startups is a lack of venture capital. California, New York and Boston contributed about two-thirds of the $329.9 billion seed investment in 2021. This imbalance is beginning to shift toward specialized in-house centers as strongholds form, such as Pittsburgh with robotics, Cleveland with biotech, and Indianapolis with SaaS.
Improved living conditions, greater opportunities, and a lower cost of living are attracting millennial tech talent to domestic hubs. The co-founders of Fifth Season and many others came to Pittsburgh to do business and stayed.
“The only people who don’t like Pittsburgh are those who never came here and those who left and never came back,” said Lynsey Campbell, a serial founder who has been touring New York, Los Angeles and San Francisco, but returned home as a Pittsburgh Partner of The Fund Midwest, a leader in the city’s venture capital and startups.
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