Dive Brief:
- Indoor farming was a $79.3 billion market in 2021, according to PitchBook, which expects the segment to expand at a 14.4% compound annual growth rate to hit $155.6 billion by 2026.
- The indoor farming space, including growers and providers of growing systems, raised a total of $1.6 billion through 70 deals in 2021, marking a more than 36% increase year over year, according toPitchBook. The bulk of this funding — or $1.3 billion — went to indoor growers, which raised 25% more year over year.
- As controlled environment agriculture players raise massive funding rounds and invest in technology to boost their production and cost efficiencies, the segment has tremendous potential to gain even more traction — if it can get a handle on its sizable startup costs.
Dive Insight:
If the investment dollars flowing into indoor farming show anything, it's that the space has potential.
In the fourth quarter of 2021, there were 11 indoor farming venture capital deals totaling $489.6 million, according to PitchBook, just about 7% off a high water mark set for deal value the previous quarter. Among the largest in 2021 wereBowery Farming's $320.7 million Series C funding roundin August, and a $121.7 million Series B round for Upward Farms, a New York-based vertical farming firm.
Players also don't lack in ambition. This January, Upward Farms promised to build what it said would be theworld's largest indoor vertical farm, a 250,000-square-foot behemoth located in Pennsylvania and slated to open in early 2023. The size easily dwarves the90,000-square-foot facility in Abu Dhabithat competitor AeroFarms boasted would be the world's largest in a 2020 announcement.
Of course, every facility is state-of-the-art, according to whatever indoor farming company is making the announcement. And in this space, having a computer-assisted, automated element is becoming table stakes to simply compete. A few players have acquired robotics firms outright, including Bowery Farming, which in February bought 3-D vision androbotic harvesting startup Traptic, and Plenty, whichuses AI technologyto control everything from water usage to growing conditions.
正是这种技术的军备竞赛,驱动器competition in the indoor farming space and companies' endless pursuit of funding. As PitchBook noted in its report, indoor farming players face high startup costs around building their sprawling greenhouses, along with installing automation and environmental controls. As they survive their first months of operation, they face high utility costs to maintain optimal growing conditions, with the cost of lighting alone oftenmaking up 30% of operational costs. And because many of these CEA firms like to build facilities close to the end consumer to minimize their greenhouse gas footprint, they often have to pay the higher costs associated with urban centers.
This has made turning a profit thus far an aspirational goal for most operators in the space. And it has at times stymied CEA firms' efforts to go public and raise more money for growth. The most famous example of this is AeroFarms, whichcalled off plans to mergewith a special purpose acquisition company this past October after funding dried up. Indoor farming saw seven exits in 2021 with an estimated value of $737.1 million, according to PitchBook, compared to a value of only $16.9 million over three deals in 2020.
Correction: An earlier version of this story misidentified the location of Upward Farms' upcoming indoor vertical farm. It will be located in Pennsylvania.








