AppHarvest is now APPH: Rise of the Rest’s First Publicly Traded Company
On February 1st, the AppHarvest team — led by Founder & CEO Jonathan Webb — rang the opening bell on the NASDAQ stock exchange, signifying the start of their new chapter in life as a publicly traded company after successfully completing a merger with Novus Capital Corporation. In that moment, it became the ~20th publicly traded company in Kentucky, the third in its corporate-office HQ of Lexington, and the first in our Rise of the Rest Seed Fund portfolio. The company’s flagship facility, a 2.8 million square-foot indoor farm, operates in Morehead, KY, which is in the second poorest Congressional district in the country.
The company’s mission is to feed the future from the heart of Appalachia. I am at once proud of and awed by Jonathan, whose dual-track passion for the future of food and the future of Appalachia has brought him to tears more than once since we first invested in early 2018. Having the opportunity to learn from the founders you back is by far one of the most rewarding parts of being a venture capital investor. After all, entrepreneurs are the realistic optimists who are brave enough to reimagine the future and crazy enough to believe they can make it happen.
AppHarvest is an applied technology company that combines longtime best practices in agriculture with bleeding edge technology to build large-scale, high-tech greenhouses that grow fresh produce, beginning with tomatoes. The company’s sustainable growing techniques yield nutritious, chemical pesticide-free non-GMO fruits and vegetables at scale, using 90 percent less water than traditional open-field agriculture and 100 percent recycled rainwater. The “Appalachian Advantage” of being within a day’s drive of nearly 70% of the U.S. population, also helps streamline costs, which makes the produce more affordable for the everyday American consumer.
AppHarvest raised its first round of institutional capital from our Rise of the Rest Seed Fund and others in January 2018. Three years later, the company is trading publicly, with its shares trading up 44% in its market debut. I used to joke that the company moves at “the speed of Jonathan,” referring to the founder’s incredible impatience with the status quo. But in reality –and without jest — the company’s DNA is wired with an urgency that meets the moment: the United Nations has predicted that by 2050 we will need up to 50% more food to meet a rising population and growing middle class. And we would need a second planet Earth to grow the food we need if we continue as-is. In response, AppHarvest has plans to launch 12 large-scale greenhouses by 2025. If the company wins, they will help reshape an industry plagued by poor operational practices, help rebuild a region long overburdened by economic neglect, and help alleviate one of the existential global crises of our generation. It is a pioneer in what the American startups of the future can — and should — look like. I believe we’re in transition from an economy dominated by consumptive business models that drain resources to post financial gains, to one filled with regenerative workplaces that demonstrate financial wins and social wins are not only possible, but deeply dependent on each other.
Our foundational investment thesis at Rise of the Rest is a simple one: we see opportunity first through the lens of geography. While more than 75% of the Fortune 500 is headquartered in cities all across the country, nearly 75% of venture capital dollars invested each year ($130B+ in 2020) is concentrated in just three states: California, New York, and Massachusetts. We believe that transformative companies led by brilliant entrepreneurs can — and should — be able to start and scale anywhere in the country. Early stage venture capital is often the fulcrum security that can unlock a startup’s potential, help fuel regional job creation, and ultimately drive large-scale economic development. Access to this type of accelerant capital can be the great equalizer so that more startups can scale to become public companies. With AppHarvest’s NASDAQ debut, we are one step closer to closing that divide.
Anna Mason serves on the board of APPH.
