Infarm looks to raise $200m for vertical farm expansion

Infarm, a German start-up developing indoor farms, is closing in on a new $200m investment, hoping to capitalise on renewed investor appetite for companies that can address food supply problems that arose during the pandemic.
Berlin-based Infarm has closed an initial $140m of a planned $200m Series C funding round, said people involved in the deal, at more than double the valuation at which it raised $100m a year ago. The deal values the company in the hundreds of millions of dollars, these people said.
Unlike other vertical farming ventures that install crops in huge warehouses, Infarm’s smaller “modular” units sit on supermarket aisles and inside restaurants. These hydroponic farms can avoid the use of pesticides thanks to a tightly controlled environment, and reduce lengthy supply chains by offering produce that is fresh at the point of sale.

Hundreds of its small farms growing herbs and salads can be found on the shelves of supermarkets after it struck deals with Marks and Spencer in the UK and Kroger in the US, as well as European supermarkets including Metro, Casino and Migros. Last month it signed up Aldi in Germany.
LGT Lightstone, the “impact investing” arm of the Princely House of Liechtenstein, is said to be among Infarm’s new investors, joining venture capitalists including Atomico, Balderton, TriplePoint, Cherry Ventures and LocalGlobe. LGT Lightstone is also an investor in Lilium, the German air-taxi developer.
Infarm’s modular units sit on supermarket aisles and inside restaurants © Simone M.Neumann – www.simone-m-neumann.de
“Vertical farming is a pandemic-proof business,” said one investor.
Infarm declined to comment. LGT Lightstone did not immediately respond to a request for comment.
But while the Covid-19 pandemic’s pressures on food supply chains have opened opportunities for new producers such as Infarm, it has also hit demand from restaurants, which make up a smaller portion of the company’s business.
While tech investing has continued during the pandemic, lockdowns make it harder for potential investors to perform due diligence on hardware-based companies such as Infarm.

The company was founded in 2013 by Osnat Michaeli and brothers Erez and Guy Galonska. It competes with several other venture-backed indoor farming start-ups including Plenty, Bowery Farming and AeroFarms.
The group was founded in 2013 by Osnat Michaeli, pictured, along with brothers Erez and Guy Galonska © Simone M.Neumann – www.simone-m-neumann.de
Bowery has raised more than $140m from investors including Alphabet’s GV, according to Crunchbase, while SoftBank-backed Plenty has a $400m war chest.
Infarm’s latest fundraising, when complete, would allow it to close the gap with Plenty, which also counts Amazon founder Jeff Bezos and former Google chief Eric Schmidt among its investors. In late March, Bloomberg reported that Plenty was looking to raise at least $100m in new financing.
However, Infarm’s expansion has outpaced Plenty, which remains largely focused on building facilities in its native California.
While larger warehouses such as Plenty’s have high upfront costs and are expensive to provide with lighting and air conditioning, Infarm argues its modular farms are easier to scale and prove appealing to retailers looking for differentiation. Investors hope that it can also build a brand of its own, unlike most agricultural suppliers.
Additional reporting by Emiko Terazono

Hedge funds eye new corporate structure in Singapore

Multibillion-dollar hedge funds, private equity firms and family offices from Asia, Europe and the US are poised to move assets to Singapore, after the city state launched a corporate structure in a bid to become the region’s leading financial centre.
The moves come amid growing concerns about the status of Hong Kong. Funds have been developing contingency plans for life outside the semi-autonomous territory after months of pro-democracy protests last year and Beijing’s decision to impose a national security law.
Japan and Singapore have both stepped up efforts to present themselves as the best alternative, with Tokyo expected to offer free office space, visa waivers and fast-tracking of licences.

Singapore launched a legal structure in January called the Variable Capital Company, designed to lure the assets of fund managers and family offices registered in low-tax jurisdictions such as the Cayman Islands and Luxembourg. The VCC is designed for both traditional and alternative investment funds and can be used either as a standalone entity or as an umbrella for multiple funds.
The structure shares many tax-efficient features of Luxembourg’s Sicav, the Segregated Portfolio Company (SPC) in the Caymans and Hong Kong’s Open-Ended Fund Company (OFC), said tax experts.
A large part of the VCC’s appeal derives from the country’s strong regulatory reputation relative to other domiciles, said asset managers that have launched the structure.
The government is also offering to offset up to 70 per cent of eligible set-up costs with a cap of S$150,000 ($108,000) per VCC, under a scheme valid until January 2023.
At least four multibillion-dollar real estate and credit funds with managers based in Tokyo, Hong Kong and Singapore are in the process of registering VCCs. One $1.5bn private equity fund as well as several Japan and Asia-focused hedge funds are also in discussions to do so, according to people with direct knowledge of the situation.
Seventy VCCs — many set up by small and boutique funds or local family offices — have already been launched.

But a much larger wave of companies is coming, say bankers, fund managers, tax advisers and other people familiar with the situation.
“We’ve heard of families from Europe and North America looking at this in a very serious way . . . and some of these have engaged lawyers to work on their mandates,” said Lee Woon Shiu, regional head of wealth planning, family office and insurance solutions at DBS Private Bank in Singapore.
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The Cayman Islands, which has historically attracted a large portion of new global hedge fund assets, is reeling from the EU’s decision in February to add the jurisdiction to its blacklist of non-cooperative tax jurisdictions. A significant number of funds with assets in the Cayman Islands are run by managers based in Hong Kong.
The VCC legislation “came out at the right time to soak up this demand where asset managers are now slightly nervous of having their product not only in offshore jurisdictions”, said Armin Choksey, Asia Pacific Asset & Wealth Management Market Research Centre Leader at PwC Singapore, who helped set up the structure.
Yap Chee Wee, chief executive of Fleur Capital, a Singapore-based wealth management firm that has set up a VCC jointly with a visual effects company, said Singapore’s structure marked the first solid challenge to existing fund domiciles in years.
“In my 20 odd years in the financial industry, this is the first time there’s [been] major change. It was long awaited and should have been done much earlier,” he said, adding that he is considering redomiciling the company’s existing funds from the Cayman Islands.
Benny Chey, assistant managing director at the Monetary Authority of Singapore, the de facto central bank, said he expected the VCC to “attract the interest of private wealth and large institutional investors” thanks to its “capital variability, segregation of assets and liabilities, and its ability to access tax treaty benefits”. 
Mr Chey added that requiring VCC fund managers be regulated by the MAS and imposing anti-money laundering and counter-terrorism obligations are among the measures that will ensure these structures’ legitimacy.

Russia accused of offering Taliban bounty for killing US troops

The White House has denied a report that Donald Trump was briefed on a Russian plot to pay militants a bounty to kill US soldiers in Afghanistan.
The allegations, contained in a New York Times report, said US intelligence officials concluded months ago that Russian operatives offered Taliban-linked militants money to target Nato troops in the country, including American and British forces.
It said the intelligence was briefed to Mr Trump and that his National Security Council discussed the problem at an inter-agency meeting in late March, but that British counterparts were told only this week.

“While the White House does not routinely comment on alleged intelligence or internal deliberations, the CIA Director, National Security Advisor, and the Chief of Staff can all confirm that neither the President nor the vice-president were briefed on the alleged Russian bounty intelligence,” White House press secretary Kayleigh McEnany said in a statement on Saturday.
But Ms McEnany stopped short of denying the report about the alleged Russian operation itself, which the NYT said was conducted by an arm of the GRU, Russia’s military intelligence unit, that may have been aimed at destabilising peace talks held last year in a bid to undermine American interests.
“This does not speak to the merit of the alleged intelligence but to the inaccuracy of the New York Times story erroneously suggesting that President Trump was briefed on this matter,” said Ms McEnany.
The Russian foreign ministry denied the claims on Saturday, describing them as “another piece of fake news” and an invention of the American intelligence community. It said US intelligence agencies were riled by a new diplomatic outreach between Moscow and the Taliban.
The CIA and the Pentagon declined to comment. The British embassy in Washington did not immediately answer a request for comment.
US officials spent more than a year negotiating a peace deal between Washington and the Taliban, which was signed in February but has yet to be fully implemented. The Taliban committed to halt violence against US forces and Mr Trump has made US troop withdrawal from Afghanistan, site of America’s longest-running war, one of the key platforms of his foreign policy.

The peace deal foresaw withdrawing all US troops within 14 months of signing the February deal, along with Nato’s 39,000 troops. But the pace of withdrawal remains unclear, and the peace deal has snagged on talks due between the Taliban and the Kabul government.
Michael McCaul, the top Republican on the Democrat-controlled House foreign affairs committee, said the reports, if true, “would only deepen” his grave concerns about Russian president Vladimir Putin’s regime and its impact on global affairs. He cited its invasion of Ukraine, propping up dictators around the world — a reference to Moscow’s support for regimes in Syria and Venezuela — and interfering in both US and European elections.
“If accurate, the Administration must take swift and serious action to hold the Putin regime accountable,” Rep McCaul said of the report in a statement, adding that he had already reached out to the administration.
Mr Trump has frequently been accused of failing to stand up to Russia. In 2018 he broke ranks with his own intelligence community’s assessment that Moscow interfered in the 2016 presidential election by appearing to accept Mr Putin’s denial of any interference.

Covid-19 cases hit new records in US states

The number of new daily coronavirus cases hit records in several US states on Saturday, as officials started closing venues they had recently reopened and workers demanded new safety protections.
Florida’s cases increased by 9,636 to 132,545, the state’s health department said Saturday. The state, the third-largest in the US, reported 8,942 new cases on Friday. South Carolina and Nevada also reported record numbers of new Covid-19 cases on Saturday.
In Nevada, the Culinary Union said it will file a lawsuit on Monday on behalf of workers in Las Vegas casinos to demand better sanitary measures. The union represents about 60,000 workers including most of the casino workers in Las Vegas.

More than a dozen states in the south and west have experienced a new wave of coronavirus cases, raising the prospect that many of the regions that reopened their economies will have to reverse the measures.Texas recorded 5,707 new cases on Friday, the fourth straight day of more than 5,000 infections. Arizona, another western state that has seen a sharp increase, had 3,428 new cases, near a new record. California recorded 4,890 and San Francisco’s mayor said the city would delay reopening measures scheduled for Monday.
Anthony Fauci, the infectious diseases expert helping to lead the US pandemic fight, said on Friday that some states might have to return to full “shelter-in-place” policies, but suggested they should first start with less severe restrictions such as limiting crowds and requiring masks.
As the US recorded its largest one-day increase in coronavirus cases since the pandemic began on Friday, fears that the country’s economic rebound could be shortlived caused the benchmark S&P 500 to fall 2.4 per cent for the day. 
Florida’s new Covid-19 cases are a setback for its economy, which had been recovering from lockdowns ordered earlier this year. People poured into Florida’s vacation rental homes in May, bringing needed tourism revenue into the state.
But on Friday, Florida governor Ron DeSantis prohibited alcohol consumption in bars, effectively ordering them to close just weeks after many had reopened. Miami said its beaches would be closed over the July 4 independence day holiday.
More positive Covid-19 test results among young adults and rising hospitalisation forced the decision to close beaches, Miami-Dade County mayor Carlos Gimenez said. “If people are not going to be responsible and protect themselves and others from this pandemic, then the government is forced to step in and restore common sense to save lives.” 

The decision to close bars on Friday confused some local police officers who started closing restaurants that did not need to be shut, said Carol Dover, head of the Florida Restaurant and Lodging Association.
After the governor’s announcement, “there just was a lot of confusion,” Ms Dover said on Saturday.
In Texas, governor Greg Abbott, also ordered all bars to close and limited public gatherings to fewer than 100 people.
Mr Abbott’s executive order, which requires restaurants to cut their indoor dining to half capacity, was the second attempt in as many days to snuff out a sudden jump in cases in Texas.
“If I could go back and redo anything, it probably would have been to slow down the opening of bars,” Mr Abbott told a Texas news station on Friday. “A bar setting, in reality, just doesn’t work with a pandemic.”