Signs That Indoor Farming Is Making A Comeback

Controlled Environment Agriculture (CEA) experienced some high-profile bankruptcies and closures and a deep decline in VC funding in 2022 and 2023. However, there are now signs that the CEA market is improving.

Investment Trends

VC investments in indoor farms declined 90% year-over-year. Several high-profile vertical farm companies went bankrupt and ceased operations. By contrast, 2024 has seen significant funding and project finance in CEA. Some recent examples include:

• Generate Capital Invests £38 Million in GrowUp to Scale:
• Ceragen Raises $2M in Seed Funding to Expand Operations.
• iyris (formerly RedSea): This AgriClimate Tech company completed a $16 million Series A fundraising on May 31, 2024.
• Agrourbana: The Chilean vertical farming company raised $6 million in Series B funding.
• Growcer Inc.: The Canadian container farming company raised $3 million to expand operations.
• Oishii: Achieved a remarkable $134 million in funding from 19 investors, including Nippon Telegraph and Telephone
• Hippo Harvest: Successfully closed a $21M Series B funding round led by Standard Investments.
• Crysp Farms: Completed a $2.25 million Pre-Series A funding round, focusing on decentralized vertical farming in the Middle East region.
• Plenty Unlimited Inc. and Mawarid Holding Investment: This large project plans to develop up to five farms over the next five years, requiring an investment of up to AED 2.5 billion (US$680 million).

Some things are different this time around:

1. Many of the 2024 large project announcements are newer companies, outside of North America and Europe, in emerging markets.
2. Food security, local supply chains, and climate change are driving CEA customers.
3. Many investors believe interest rates have peaked and will soon come down, which will stimulate the economy.
4. Greater emphases on companies delivering proven results.
5. A more practical and careful use of technology because it works rather than because it is more high-tech.

VCs are sitting on increasing amounts of accumulated capital after pulling back in 2022 and 2023. This is leading to investments in larger projects to more established companies. More information is available here.

Image: growupfarms.co.uk

David Shiller

David Shiller is the Publisher of LightNOW, and President of Lighting Solution Development, a North American consulting firm providing business development services to advanced lighting manufacturers. The ALA awarded David the Pillar of the Industry Award. David has co-chaired ALA’s Engineering Committee since 2010. David established MaxLite’s OEM component sales into a multi-million dollar division. He invented GU24 lamps while leading ENERGY STAR lighting programs for the US EPA. David has been published in leading lighting publications, including LD+A, enLIGHTenment Magazine, LEDs Magazine, and more.

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