Backed by millions of dollars in fresh funding, Fieldless Farms sees fertile ground for expansion as it strives to get its hydroponically grown produce into grocery stores across the country.
Launched three years ago, the Ottawa-based startup is already selling leafy greens in more than 40 Farm Boy stores in Ontario as well as Massine’s Your Independent Grocer and McKeen Metro Glebe in the capital.
But founder and CEO Jon Lomow says Fieldless is poised to cultivate a bountiful crop of new market opportunities after finalizing a $17.5-million series-A funding round led by Forage Capital Partners, a Calgary-based VC that primarily invests in agri-tech ventures. Farm Credit Canada and the Business Development Bank of Canada also contributed debt financing to the round, which was announced on Thursday.
Lomow says the capital will allow the company to boost its production capacity tenfold while adding new products to its lineup.
“Canada has a huge problem,” the Carleton University business graduate said in an interview with OBJ on Thursday morning.
“We import $60 billion of food a year, and that’s a bit of a risk. We’re starting to wake up to the fragility of supply chains and how those kinds of disruptions to supply chains can create inflation pressures on food.”
“We import $60 billion of food a year, and that’s a bit of a risk. We’re starting to wake up to the fragility of supply chains and how those kinds of disruptions to supply chains can create inflation pressures on food.
“We need to start getting better at producing our own food. Technology is getting to the point that we can really make a dent in those imports. I think there’s a huge economic opportunity in that $60-billion number, and we’re focused on going big into that number.”
Forage Capital chief executive Jim Taylor is betting that Fieldless has the goods to deliver on that promise.
“We really like Fieldless’s approach and what the company has been quietly and cost effectively building here in Canada,” Taylor said in a statement. “We think the company is well positioned in the current economic climate for steady and significant growth.”
Fieldless produces two types of lettuce mixes – Northern Crunch and Ontario Sweets – at its Cornwall indoor farming facility. Lomow wouldn’t reveal exactly how much produce Fieldless currently grows, but in 2020 he told OBJ the firm delivered almost 2,000 packs of lettuce a week.
That number has almost certainly risen since. The lettuce, which is grown without herbicides or pesticides in a climate-controlled, 20,000-square-foot indoor farm using renewable energy, has become so popular “we have trouble keeping it on the shelves,” Lomow said.
Expanding to 60,000 square feet
Fieldless is in the midst of expanding its Cornwall facility to 60,000 square feet as it pursues new customers and branches out into new crops. Now at 30 employees, the firm expects to more than double its headcount over the next few years.
Lomow said the firm is looking to increase the yield of its current lettuce mixes and add other leafy greens such as kale, spinach, romaine lettuce and more to its list of products. From there, Fieldless hopes to begin cultivating other vegetables such as cucumbers and peppers as well as other food.
The company’s other main priority is getting its greens into more stores. Lomow said Fieldless will likely target major supermarket chains such as Loblaw and Sobeys – which is owned by Farm Boy’s parent company, grocery giant Empire – in a bid to spread its footprint from coast to coast.
The firm, which raised $3 million in seed capital to get off the ground in 2019, now feels it has the ideal financial partners to help it achieve its lofty mission.
Lomow said he’s “super excited” to have Forage on board, calling the Western Canadian fund “probably Canada’s savviest, most well-known agri-food VC.” Meanwhile, FCC and BDC provide a powerful one-two punch on the debt financing side.
“We see it as a long-term strategic partnership with both FCC and BDC,” Lomow said. “It’s going to allow us to grow a lot more … using debt.”
Fieldless – which partners with a number of Canadian and foreign companies that provide its state-of-the-art hydroponic technology that grows crops without soil – is already planting the seeds for another funding round that could come to fruition within the next 12 months, he added.
If many in the Canadian business community see storm clouds on the horizon as the threat of a recession grows stronger seemingly by the day, Lomow appears unfazed. Canada’s food sustainability challenges aren’t going to just melt away, he notes, making the agri-tech sector an attractive proposition for investors seeking a safe harbour.
“I think the way that we’ve organized our business makes it hugely appetizing to investors looking to deploy funds in a market like this,” Lomow said.
“The air is kind of out of the tech bubble a little bit, and when you’re in a market like this that’s super concerned about supply chains and food sustainability and food reliability and all those things, we’ve got this emerging sector of food-tech and biotech happening. I think it’s kind of the perfect place for investors to turn right now.”
Like nearly every company that’s in expansion mode right now, Fieldless is contending with mounting supply chain disruptions and ongoing labour shortages that are hampering its efforts, Lomow conceded.
How effectively the company can overcome those hurdles will go a long way to determining its ability to cash in on a once-in-a-generation opportunity, he said.
“We’re battling all those things like everyone else is. We’re working as hard as we can to get this happening as quickly as possible. We’ve got to execute, and we’ve got to do it well and fast.”