AppHarvest

AppHarvest was a Kentucky-based indoor farming company that operated high-tech greenhouses to grow tomatoes and other produce.¹²⁴⁷¹⁵ The company went public in 2021 through a SPAC merger at a $1 billion valuation, but faced financial difficulties and filed for Chapter 11 bankruptcy in July 2023.^{1271012141517} AppHarvest's bankruptcy involved a liquidation plan to sell its greenhouse facilities, and the company's assets were sold through a court-supervised auction.¹⁴¹⁷

Timeline

Money raised

AppHarvest raised $142 million across 5 funding rounds, according to Multiples.⁸ AppHarvest raised $691 million in total capital, according to IdeaProof.³ In March 2019, AppHarvest raised a Series A round led by ValueAct Capital, Revolution, and Equilibrium Capital.⁸ In May 2019, AppHarvest raised $97 million in a Series A round from investors including Equilibrium Capital, ValueAct Capital, and Revolution.⁸ In January 2020, AppHarvest closed an $11 million corporate funding round from investors including Equilibrium Capital, Revolution, and ValueAct Capital.⁸ In August 2020, AppHarvest raised a $28 million Series C round led by Narya Capital.⁸ In September 2020, AppHarvest announced a SPAC merger with Novus Capital that would bring in $475 million in gross proceeds and value the company at $1 billion.⁷¹¹ In February 2021, AppHarvest completed its merger with Novus Capital and received approximately $475 million in gross proceeds, including $375 million from a PIPE transaction.¹⁰ In July 2021, AppHarvest secured a $91 million construction loan from Equilibrium Capital for a facility in Richmond, Kentucky.⁸¹³ In August 2022, AppHarvest raised $50 million in a funding round.¹³

Investors named in the sources: Revolution⁸, ValueAct Capital⁸, Equilibrium Capital⁸, Bossa Invest⁸, Endeavor Catalyst⁸, S2G Investments⁸, Narya Capital⁸, Martha Stewart⁷, Peter Thiel⁷, Fidelity Management & Research Company⁷, Inclusive Capital⁷, Novus Capital⁷.

What happened

AppHarvest was founded in 2017 and headquartered in Morehead, Kentucky.⁸ The company aimed to build high-tech indoor farms in Appalachia to grow fresh produce and create jobs.⁴ AppHarvest planned to build a 60-acre greenhouse in Morehead, Kentucky, with a cost of $97 million.⁴ The company's founder, Jonathan Webb, had no prior farming experience but attracted $97 million in project financing.⁴ AppHarvest partnered with Dutch greenhouse provider Dalsem and distributor Mastronardi Produce.⁴

The company planned to run the greenhouse entirely on rainwater.⁴ AppHarvest raised a Series A round in March 2019 led by ValueAct Capital, Revolution, and Equilibrium Capital.⁸ In May 2019, AppHarvest raised $97 million in a Series A round.⁸ In January 2020, AppHarvest closed an $11 million corporate funding round.⁸ In August 2020, AppHarvest raised a $28 million Series C round led by Narya Capital.⁸

In September 2020, AppHarvest announced a merger with SPAC Novus Capital to go public at a $1 billion valuation.⁷¹¹ The SPAC merger was expected to bring in $475 million in gross proceeds, including a $375 million PIPE.⁷ In February 2021, AppHarvest completed the merger and began trading on NASDAQ.¹⁰¹² AppHarvest received approximately $475 million in gross proceeds from the merger.¹⁰ AppHarvest operated four farms in Kentucky: Morehead, Richmond, Somerset, and Berea.¹⁵¹⁷

The company produced tomatoes, leafy greens, cucumbers, and strawberries.¹⁷ In April 2021, AppHarvest acquired Root AI for $60 million.⁸ In July 2021, AppHarvest secured a $91 million construction loan from Equilibrium Capital for a facility in Richmond, Kentucky.⁸¹³ In December 2021, AppHarvest entered into a $100 million committed equity facility with B. Riley Principal Capital.¹³ In August 2022, AppHarvest raised $50 million in a funding round.¹³

AppHarvest faced a liquidity crisis attributed to lower-than-expected crop yields, higher-than-expected operating costs, declining equity markets, and pressure from secured creditors.¹⁷ In April 2023, AppHarvest announced a $40 million share offer to raise capital.⁹ On July 23, 2023, AppHarvest Products, LLC and eleven affiliated debtors filed for Chapter 11 bankruptcy.¹⁴¹⁷ At the time of filing, AppHarvest had more than $609 million in assets and more than $341 million in debts.¹⁵ The company had approximately $190 million in funded debt across three secured facilities and nearly $30 million in trade obligations.¹⁷

AppHarvest's bankruptcy case was assigned to Judge Christopher M. Lopez in the U.S. Bankruptcy Court for the Southern District of Texas.¹⁴ The company planned to transition the Berea farm back to the company that leases it.¹⁵¹⁸ AppHarvest had enough money to keep the Morehead, Richmond, and Somerset farm operations running for 60 days after the filing.¹⁵ The goal was to find buyers for the farms within 60 days.¹⁵ On September 14, 2023, Judge David R. Jones confirmed the amended joint plan of liquidation.¹⁷

The bankruptcy case moved from petition to plan confirmation in under 60 days.¹⁷ The effective date of the bankruptcy plan was December 5, 2023.¹⁴ AppHarvest's high-tech greenhouses remained operational during bankruptcy, and product continued to flow to grocery chains, restaurants, and other partners.¹ A class action securities lawsuit was filed against AppHarvest, alleging that the company failed to disclose problems and misrepresented its ability to succeed.⁶¹⁶ The securities litigation was settled, with a settlement hearing held on July 11, 2024.¹⁶

Legal outcomes

• filedA lawsuit filed by AppHarvest investors argued that the startup had failed to disclose problems and misrepresented its ability to succeed.⁶
• settledIn re AppHarvest Securities Litigation was a class action lawsuit that was settled, with a settlement hearing on July 11, 2024.¹⁶

Where the founders are now

Jonathan Webb was the founder and CEO of AppHarvest.⁴⁷ Tony Martin was the CEO of AppHarvest at the time of the bankruptcy filing.¹⁵

Sources

1. Indoor farming company AppHarvest files for bankruptcy, agriculturedive.com, Jul 26, 20
2. Why did AppHarvest file for bankruptcy? A timeline of events, bizjournals.com, Jul 25, 20
3. Test Your Idea in 120s — Free AI Startup Validator | IdeaProof, IdeaProof.io
4. Paid Program: The Indoor Farmer Who Wants to Remake Appalachia's Agriculture, Samsung, 2019-08-29
6. The vertical farming bubble is finally popping, fastcompany.com, Feb 27, 20
7. CEA startup AppHarvest to go public, expects $475m funding at $1bn valuation, AgFunderNews, 2020-10-01
8. AppHarvest Funding, Investors & Competitors | Multiples, multiples.vc, Sep 18, 20
9. AppHarvest to raise $40m via share offer for indoor-farming capital - Equilibrium, Equilibrium - Sustainable Returns, 2023-04-17
10. AppHarvest and Novus Capital Complete ..., appharvest.com, Feb 1, 202
11. AppHarvest starts trading after merger valuing company at ..., fooddive.com, Sep 29, 20
12. AppHarvest: Timeline of startup, financial woes & bankruptcy, kentucky.com, Jul 24, 20
13. AppHarvest – Funding, Valuation, Investors, News, Parsers VC
14. AppHarvest Products, LLC, et al., cases.stretto.com
15. AppHarvest files for Chapter 11 Bankruptcy protection, WCHS, 2023-08-02
16. In re AppHarvest Securities Litigation - Strategic Claims Services, Strategic Claims Services
17. AppHarvest: Asset Sales and Liquidating Chapter 11, ElevenFlo, 2026-03-19
18. AppHarvest files for bankruptcy, will seek to transfer Berea ..., kentuckylantern.com, Jul 24, 20

How this case file was put together

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