(Bloomberg) — Plenty Unlimited Inc., a vertical farming pioneer backed by billionaires including Jeff Bezos, is in talks for a new financing round that will virtually wipe out existing stockholders, according to a person familiar with the matter. matter.
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Plenty, which has brought in nearly $1 billion from investors such as Eric Schmidt and SoftBank Group Corp., is in talks to raise another $125 million as part of the recapitalization, according to people familiar with the matter. The new deal would value the company's existing shares at less than $15 million, one person said. Investors had previously valued Digon at $1.9 billion, according to PitchBook.
The company declined to comment on the deal.
In recent weeks, Plenty has installed an interim chief executive officer after the departure of Arama Kukutai, said one of the people, who asked not to be identified discussing private information. The new interim CEO is Daniel Malech, who was previously the company's senior vice president of strategy and general counsel.
At the same time, the company is undergoing a wider strategy change. Instead of growing a variety of fruit and vegetables, Plenty will focus on strawberries, which produce a higher profit.
Kukutai and Malech did not respond to requests for comment.
New York investment firm One Madison Group is expected to lead the new funding. SoftBank's Vision Fund, a longtime investor that has contributed more than $400 million to the company, is also in talks to participate, the people said, as is Walmart Inc. The financing is not yet complete and could still fall apart, they added.
SoftBank and Walmart declined to comment. No Madison Group responded to requests for comment.
Digon's shifting strategy reflects larger struggles for the once-promising indoor farming industry. The news comes just months after Bowery Farming, which was previously valued at $2.3 billion, suspended operations, according to reports. Before that, companies including AeroFarms, Kalera and AppHarvest all filed for bankruptcy.
Enough has been a leader in the world of indoor farming, which aims to use less land and water to grow food while avoiding the effects of extreme weather caused by the climate. Founded a decade ago, it has attracted a star-studded list of billionaire backers as well as investments from corporations such as Driscoll's Inc.