Walmart sells an awful lot of produce and now the retailer wants to help change how it's grown.
The Bentonville, Ark., retail giant agreed to invest in Plenty, the South San Francisco vertical-farming company.
The investment, which the two companies declined to specify, is part of a $400 million Series E funding round at Plenty. Walmart also will name a representative to Plenty's board. Walmart's investment is subject to clearance under U.S. antitrust law.
Plenty Also Has Softbank as an Investor
Plenty, founded 2014, said on Tuesday that it closed the $400 million funding round. Besides Walmart, a current investor, Softbank (SFTBF) , joined the round as did two new investors, the New York investment firms One Madison Group and JS Capital.
The agreement enables Walmart "to source Plenty's leafy greens for all its California stores from Plenty's [Compton, Calif.], farm, beginning later this year," a statement said.
Walmart said it works with a number of vertical-farming companies but this is the company's first equity investment in the industry.
Plenty Also Has Deals With Amazon, Albertson's
"While this is the first investment from a major U.S. retailer in indoor vertical farming, Plenty has previously partnered with Albertsons (ACI) - Get Albertsons Companies, Inc. Class A Report, and the company's produce is sold in several Bay Area grocers including" Amazon's (AMZN) - Get Amazon.com, Inc. Report Whole Foods, Albertsons' Safeway, and others," a spokeswoman for Plenty told TheStreet by email.
Plenty "offers pesticide-free, peak-flavor produce to shoppers every day," Charles Redfield, chief merchandising officer at Walmart U.S., said in the company's statement. The partnership also reinforces the retailer's commitment to sustainability, he said.
On its website Plenty said that indoor vertical farms boost farm yields sharply. They provide an optimal environment for plants, "reducing the unpredictability of changing climates. No bleach, no pesticides on our plants. No GMOs."
Plenty said its methods ["condense] hundreds of acres of farmland into the size of a big box retail store." The system uses 1% of the land required by traditional farming, it says.
Omar Asali, chairman and chief executive at One Madison, added that Plenty's modular system enables growing year-round "even in geographies where traditional farming is difficult.”
Besides the Compton growing facility, Plenty operates an indoor plant-science research facility in Laramie, Wyo.