Hundreds of households in Iowa and Minnesota receive regular deliveries of freshly harvested lettuce and greens grown not in fields, but in an innovative and technology-driven indoor farm. Iowa-based Clayton Farms (formerly Nebullam) is a fast-growing indoor-farming company that uses the latest equipment and technologies to deliver fresh and healthy produce to subscription customers.
The company was founded in 2017 by Clayton Mooney and Danen Pool with the original concept of designing, building and selling a new generation of indoor farming equipment, then licensing the software to run indoor farms to buyers who would open and operate indoor farms themselves.
The innovation meant updating old concepts of indoor farming with stacking systems to take better advantage of space, be more efficient and using technology to reduce labor costs. The company built a demonstration farm at their Iowa State University Research Park location in Ames and was selling lettuce and microgreens to local restaurants when COVID-19 pandemic hit in 2020.
Pivoting business model
“At the start of the pandemic, we had no way to make our business model work. A big part of our sales process was bringing people in for tours, which we couldn’t do, and selling our harvested lettuce wholesale to restaurants, which weren’t open,” said Mooney. “So, we tried a new experiment to keep the business alive, pivoting to a subscription service for customers to purchase lettuce and greens directly from us and have delivered just a few hours after harvest.”
The experiment worked, and the number of subscribers has grown steadily and driving a change in the company’s business model. Instead of building equipment and technology for others to be indoor farmers, Mooney and Pool became farmers themselves. The company updated its brand and name earlier this year, becoming “Clayton Farms,” and opening the second indoor farm in the Twin Cities area.
“A round of investor funding earlier in 2022 is allowing us to take what we’ve learned and built in Iowa and replicate it in other markets,” said Mooney. “Our new Twin Cities farm went from getting the keys to the building to harvesting plants in eight weeks.”
A growing appreciation for Iowa’s entrepreneurial ecosystem
As a self-described Iowa “boomerang,” Mooney has found connections and resources in Iowa key to the development and growth of the company.
“I didn’t have an appreciation for Iowa until I moved back to the state,” he said. Mooney was a professional poker player in Ireland before returning to the state looking for opportunities to work for or found a start-up. He was a founder of KinoSol, which made solar food dehydrators, then connected with Pool to found Nebullam, now Clayton Farms.
Iowa was the right choice for a number of reasons, said Mooney.
“First, Iowa is an agriculture state. With Iowa State University researchers and resources in our backyard, the ability to hire ISU alumni, and having industry partners and manufacturers all within the state, it all results in better collaboration and less downtime,” he said.
Mooney has also seen firsthand the growth of Iowa’s startup ecosystem, participating in the Iowa State CyStarters program with Kinosol and in the second cohort of the ISU Startup Factory with Clayton Farms. Ames-based Ag Startup Engine invested in the company in 2017, with a follow-on investment in 2019. Mooney has also served as an entrepreneur in residence with Start Something College of Agriculture and Life Sciences (CALS).
In October 2022, Clayton Farms launched The Grow Room, a co-working space in its ISU Research Park location, providing a space for founders to not only work, but collaborate and connect.
“A rising tide lifts all ships,” he said. “A strong community of entrepreneurs means that we all benefit from the other people in the room, collectively we can help someone else save time, money or heartache.”
Published December 2022.