Indoor Farming Startup AppHarvest Aims For Wall Street With SPAC Deal

AppHarvest, which has attracted strong names in terms of investors and board members, is going public with a SPAC deal. 

The SPAC Deal: AppHarvest will go public via Novus Capital Corporation NOVS. The deal targets $475 million in gross proceeds for AppHarvest. This includes a $375 million PIPE from existing and new investors, including Fidelity, Inclusive Capital and Novus Capital Corp.

The deal values AppHarvest at $1 billion. The new company would trade as AppHarvest under an as-yet unnamed ticker on the Nasdaq. AppHarvest founder and CEO Jonathan Webb will lead the company going forward, according to a Tuesday SEC filing. 

“This will allow us to pursue our mission of transforming agriculture. We now know that, to build a more resilient food system that meets our growing population demands, we must immediately start building controlled environment agriculture facilities, as these farms use far fewer resources to grow far more produce,” Webb said in a statement. 

Novus Capital Corp. went public in May, raising over $100 million. 

About AppHarvest: The company is a pioneering developer and operator of sustainable indoor farms. The company is building a 60-acre indoor farm in the Central Appalachia region of Kentucky. The water-rich region is located within a day's drive of around 70% of the U.S. population.

The company’s initial focus will be tomatoes, a crop that is now 60% imported, according to AppHarvest. 

Key AppHarvest People: The company is backed by AOL co-founder Steve Case through his fund’s investment in a $120-million funding round.

NBA player Blake Griffin is also an investor in AppHarvest.

The company’s board includes Martha Stewart, which provides good name recognition and could lead to exciting partnerships and branding down the road.

AppHarvest recently announced the addition of David Lee to the board of directors. Lee spent time at DelMonte Foods and is the current CFO of Impossible Foods.

What’s Next For AppHarvest: AppHarvest said it has long-term distribution agreements in place to reach top grocers.

The company’s goal is to target the top 25 grocery companies in the U.S. The primary shipping regions will be Atlanta to New York and as far west as St. Louis and Chicago.

AppHarvest’s central location will improve transportation costs, according to the company. 

The first harvest is expected in early 2021.

AppHarvest's IPO and resulting funding will likely lead to accelerated plans for more indoor farms, according to the company.

“We believe that this partnership with Novus Capital is a transformative transaction which will allow us to both rapidly scale our agriculture facilities and build the country’s AgTech capital with Appalachia,” Webb said. 

NOVS Price Action: Shares of Novus Capital Corp. were trading 19.9% higher to $12.11 at last check Tuesday.