Vertical Farming Outfit Raises $100M In Funding
Credit: George Hodan
Author: Lauren Manning
Vertical farming operation AeroFarms has raised $100 million in a Series E funding round, bringing its total funding to $238 million. The funding will help the company expand its warehouse facilities that hold its vertical farms and look into growing different types of produce. The company has been on a slow and steady growth trajectory.
Ingka Group, parent company of furniture maker Ikea, led the funding round, bringing AeroFarm's total funding to $238 million. In 2019, the vertical farming company closed a deal with Singapore Airlines to provide fresh produce for in-flight food.
Based in New Jersey, AeroFarms is one of the oldest players in the indoor farming sector, founded in 2004. It is part of the Precision Indoor Plants Consortium, which focuses on growing crops specifically for indoor farming and optimizing their flavors.
Investors keep pouring dollars into indoor farming operations, which promise to provide retailers and consumers with efficiently produced, fresh and tasty produce. Indoor farming is projected to be a $3 billion market by 2024 as consumers continue to show an interest in finding more local produce.
But a numerous hurdles still challenge indoor farmers’ hopes of scaling beyond a niche industry. For starters, many indoor farms are limited in what they can produce, sticking to leafy greens and herbs. High electricity costs and water input needed to power indoor farms also have some asking whether they really are more resource-efficient than traditional farming.
In order to expand their footprint and get their products on more diners’ dinner tables, indoor farming startups are eyeing partnerships with key retailers and doubling down on efforts to be able to provide fresh leafy greens to hundreds of grocery stores, according to Reuters.
The East and West coasts have hotbeds for indoor ag innovation, but the Midwest is getting its own urban farming campuses soon thanks to Elon Musk’s Square Roots. The Brooklyn-based company inked a deal with Gordon Food Service’s campuses in Wyoming and Michigan that involves setting up 10 specially designed shipping containers to provide fresh produce to the food supply company’s supply chain. The herbs and greens grown on campus will be sold commercially to chefs and to consumers who shop at Gordon Food Service’s retail store.
Google Ventures backed Bowery Farming, which recently raised $90 million, is expanding to its third farm and has supply deals with key NYC establishments like Whole Foods, Foragers and Sweetgreen. Competitor Bright Farms is opening three new greenhouses in Massachusetts, New York, and North Carolina and sells to numerous retailers including Tops Friendly Markets, Food Lion, and Jungle Jim’s.
Vertical farming operation Plenty also raised $200 million in June and is hoping to branch into other types of crop cultivation like strawberries and tomatoes. It’s banking on e-commerce by selling its packaged salads through online grocery delivery platform Good Eggs.
The indoor ag industry is sprouting across the pond, too, with online grocery company Ocado recently taking a 58% stake in Jones Foods Co., the largest vertical farm in Europe, and joining forces with mission-driven indoor farming startup Infinite Acres.
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Filed Under: Fresh food Natural/organic Corporate