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Pittsburgh robot farm business of future backed by Pritzker billions

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Hydroponics is currently used to produce less than 1 percent of fresh produce than open-field farming. However, Mordor Intelligence projects that this market will grow by almost 11,%, or approximately $600 millions, by 2025.

Fifth Season

Near the Monongahela River, in Braddock’s poor industrial area, lies a new vertical farming venture that is being supported by billionaire Nicholas Pritzker of Tao Capital. This business will be an agritech innovator.

RoBotany, an MBA student who founded the start-up in 2016, was incubated by Carnegie Mellon University. It aims to disrupt America’s $60 billion produce market. Named Fifth Season now, the business leverages advanced technology, 75 million in venture capital and increased distribution. The company also has plans for a new Columbus facility. They have an expanded management team that will help them score in the vertical-farming market’s fast growth. Webb is confident that Fifth Season can be a $15 Million business. Pittsburgh Within five years, $500 million will be generated through geographical expansion plans. Sales estimates predicts that sales will reach a double-digit rate in revenue this year as well as a 600% increase in revenue within the next six months.   

Webb, 33, said that his smart manufacturing facility increases the vegetable’s yield and texture. It uses 95% less water and 95% more land and no pesticides. Fifth Season uses artificial intelligence, robotics, data and data to grow fresh vegetables year-round in indoor trays. It also harvests leafy greens from the reliance on light, water, nutrients and robots.

As a food source, hydroponics is rapidly growing.

Hydroponics accounts for less than one percent of all fresh produce. This is compared to open-field farming, which is about 11%. Mordor Intelligence forecasts that the hydroponics segment will increase by almost 11% annually to approximately $600million by 2025. “There’s tremendous runway as the price comes down and more reliable operations remove the risk,” said Brian Holland, managing director of Cowen & Co. in New York.  He said, “It is a race for scale with potential multiple winners who prove the economic model of automatic, robotic growth.” Fifth Season, which combines technology with robotics in order to grow indoor vegetables at lower costs, is certainly the more innovative, if it’s not the best.

Fifth Season competes in an extremely capital-intensive, fragmented marketplace with over 2,000 farms, some smaller, and only a few larger players. Plenty Unlimited in San Francisco, which has recently received $400 million of strategic financing from WalmartIt plans to sell fresh produce at its Compton plant in the retailer’s California shops. AeroFarms of Newark, New Jersey is another major competitor. They scrapped an SPAC contract to go public in Oct 2021, and are continuing to increase capacity on a Danville, Virginia, farm. 

Webb said, “Market leadership does not depend on time or capital.”

Fifth Season, which is racing to expand its business and stay ahead of its competition, plans to create its second indoor farming farm by 2023. Fifth Season also intends to negotiate for land near Columbus, Ohio’s John Glenn Airport. The company has also launched a line of grab-and-go salad kits priced between $6 and $8 through a partnership in December 2021 with Sabra, a hummus manufacturer. Giant Eagle stores will be carrying its products more often this March. KrogerShopRite in 10 states, and 1000 locations. The goal is to reach 3,000 grocery shops by 2023. Its initial year of operation, 2000 saw approximately 500,000 pounds of produce being delivered to local restaurants and campuses from the 60,000 square foot space that it grew on half an acre.

CNBC’s Small Business Playbook has More

A new Rust Belt boom

The Fifth Season growth spurt is a sign of a new high tech era in the ex-steel-making capital. As blue-collar workers transition to tech jobs, dozens of start-ups in the region are being created throughout Pittsburgh and across the Rust Belt.

According to Congressman Ro Khanna, Silicon Valley’s author of “Dignity in a Digital Age”, “The tech multiplier does not lift all boats”

The factory workers and technicians are skilled in making things, and they have a strong sense of belonging and ethnicity. “They are challenging the conventions of the past,” he stated.

Fifth Season has been busy. Fifth Season grew its leadership team to 80 in January. Next year, the company expects to have 100 employees.  Brian Griffiths is a tech and finance veteran who joined the company as Chief Financial Officer. He has worked at Credit Suisse, Guggenheim Partners and Skorpios Technologies. Varun Khanna, who was previously a leader at Chobani or Sabra, was appointed vice president for food products. Glenn Wells was previously employed at Quaker Oats Welch’s and Dole as senior vice-present of sales.   

A planned $70million investment in a Columbus vertical farm is another prong of its growth strategy. This is three times the size of Braddock’s $27 million plant. It also includes real estate development to develop land and buildings. Highly automated farms require only 35-50 production workers. The Pittsburgh plant makes four million salad meals annually, while the larger central Ohio location is expected to produce 15 million. The new site is being developed by Fifth Season in collaboration with One Columbus, Ohio and Jobs Ohio.

Carnegie Mellon Connection

Fifth Season’s innovative business is a result of the intellect at Carnegie Mellon University, Pittsburgh’s tech entrepreneurial cluster for computer science and robotics engineering. Webb, a mechanical and environmental engineer and a scientist by training, created a prototype and began the company with Austin Lawrence after he graduated from the MBA program.  

Webb’s younger brother Brac is the CTO. The production software was designed by Webb. Two years of stress testing were done in a former steel mill located on Pittsburgh’s south side before Braddock Farm began operation in 2020.    

Dave Mawhinney was Webb’s mentor. He helped Webb connect with investors, role models, and other entrepreneurs such as Luis von Ahn (a serial entrepreneur who is listed on Nasdaq) founder of Duolingo, an edtech startup.  Grant Vandenbussche is a former General Mills Global Strategy Coordinator and was also introduced to the group. He joined in 2018 as a Business Development Manager, now Chief Category Officer. Mawhinney said, “Fifth season is testament to CMU’s ability to attract young talent and grow entrepreneurs through their MBA program.” It’s all about network.

Austin Webb is Fifth Season’s CEO

Fifth Season

Webb was able to secure capital from several angel investors before even graduating in 2017 – most of which were CMU alumni. Mawhinney, a Columbus-based VC firm, introduced Webb in 2017. They gave Webb $1 million to seed the company in 2017. Drive Capital led a round of $35 million funding in 2019. The start-up was in stealth mode. It changed its name to RoBotany and Chris Olsen became a board member.

Vandenbussche stated that Chris had pushed them to think big about the market. He also encouraged us to see national trends, look at more than just local and regional markets, in order to establish a company with a sustainable future and create new products.

Pritzker’s Tao Capital Partners in San Francisco is one of the investors it has received, but there are eight additional investor groups who joined during 2021.

“Pittsburgh has become an ecosystem. It’s growing because it has strengths in AI and machine learning, and its legacy with biosciences,” stated Kit Mueller, head of RustBuilt community networking group and vice president at Stronghold Digital Mining, a crypto-asset company in Pittsburgh.

The city’s competitive advantage is no longer dependent upon steel and iron and its rivers. Instead, it transitions from gritty industries to robotics start ups moving into what the Silicon Strip was once warehouses. This city, which is now a small town of about 303,000 people, was home to less than half the population that it had in 1950. It’s also an anchor for R&D labs at Facebook, Apple, Google, Zoom, and Intel.  

The shortage of venture capital remains a problem for Midwestern start ups. About two-thirds (329.9 Billion) of start-up investment in 2020 was made in California, New York, Boston. As the specialized hubs of the inland begin to emerge, such strongholds like Pittsburgh (robotics) and Cleveland (biotech) are beginning to change.

The influx of millennial talent from the inland is attracted by improved lifestyle options, better opportunities, and lower living costs. Fifth Season’s co-founders, along with many others, moved to Pittsburgh in order to pursue entrepreneurial endeavors. 

Lynsie Campbell said that the only people who dislike Pittsburgh are those who have never been here or those who moved away but didn’t return. Lynsie is a partner in The Fund Midwest and a pioneer in both city’s start-up and venture capital spheres.

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