(Bloomberg) — Penti Unlimited Inc., a vertical farming pioneer backed by billionaires including Jeff Bezos, is in talks for a new funding round that would effectively wipe out existing stockholders, according to a person familiar with the matter. .
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Penty, which has brought in about $1 billion from investors such as Eric Schmidt and SoftBank Group Corp., is in talks to raise another $125 million as part of a recapitalization, according to people familiar with the matter. The new deal will value the company’s existing shares by less than $15 million, one of the people said. Previously, investors valued Plenty at $1.9 billion, according to PitchBook.
The company declined to comment on the deal.
In recent weeks, Penty has installed an interim chief executive officer after the exit of Arama Kukutai, said one of the people, who asked not to be identified discussing personal information. The new executive CEO is Daniel Malech, previously the company’s senior vice president of strategy and general counsel.
At the same time, the company is undergoing a comprehensive strategy change. Instead of growing a variety of fruits and vegetables, Penty will focus on strawberries, which are more profitable.
Kukutai and Malech did not respond to requests for comment.
New York investment firm One Medicine Group is expected to lead the new financing. SoftBank’s Vision Fund, a long-time Penty investor with more than $400 million invested in the company, is also in talks to participate, the people said, as is Walmart Inc. The financing is not yet complete and may still fall through, they added.
SoftBank and Walmart declined to comment. A medicine group did not respond to requests for comment.
Plenty’s shifting strategy spells bigger struggles for the once-dominant agricultural industry. The news comes months after Bowery Farming, which was previously valued at $2.3 billion, put operations on hold, according to reports. Earlier, companies including Aeropharm, Kalera and AppHarvest had all filed for bankruptcy.
Plenty has been a leader in the indoor farming world, aiming to use less land and water to grow food while avoiding the effects of climate-induced extreme weather. Founded a decade ago, it has attracted a star-studded list of billionaire backers as well as investment from corporations such as Driscoll’s Inc.
