Is Indoor Farming Making A Comeback?

Good morning readers.

In today’s edition, we explore how indoor farming is experiencing a resurgence after a challenging period marked by a decline in investments from 2022 to 2023.

Reading Time: 10 to 12 minutes

Special thanks to Henry Gordon Smith, Glenn Behrman, Thea-Isabella Otto & Peter Tasgal for their valuable input! Check out their respective content here.

What We Are Covering Today:

1. Investment Trends in Indoor Farming: A Tale of Two Periods

2. Examining the Shift in Investment Trends in Indoor Farming

3. Learning from Past Mistakes: Evolving Strategies in Indoor Farming

4. The Role of Accumulated Capital

5. The Impact of Potential Interest Rate Cuts on the Indoor Farming Industry

6. Investment Distribution in Indoor Farming: A Focus on Larger Companies

7. Additional Resources

INVESTMENT TRENDS
Investment Trends in Indoor Farming: A Tale of Two Periods

The 2022-2023 Investment Downturn

The indoor farming faced significant challenges during 2022-2023, marked by a sharp decline in venture capital (VC) investments. According to a May 2023 Pitchbook report, VC investments in indoor farms plummeted by over 90% year-over-year. Several key factors contributed to this downturn, including soaring energy costs, particularly in Europe, rising interest rates, and a generally unfavorable funding environment for startups.

These economic pressures resulted in severe consequences for several prominent indoor farming companies:

• Infarm: Filed for bankruptcy and ceased operations.

• Kalera: Filed for bankruptcy, although it kept operating some of its facilities.

• Future Crops: Filed for bankruptcy and ceased operations.

The Resurgence of Funding in Recent Months

In contrast to the previous year's downturn, recent months have witnessed a resurgence in funding and project finance within the sector. Various companies have secured significant investments. Notable funding achievements include:

• Generate Capital Invests £38 Million in GrowUp to Scale: This investment aims to expand GrowUp's operations.

• 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 GCC region.

• Plenty Unlimited Inc. and Mawarid Holding Investment: This ambitious 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).

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