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Vertical Farming

Vertical farming brings fresh produce closer to consumers with efficient, advanced technology.

Overview

Vertical farming, a key subsector of the indoor farming industry, refers to the process of growing crops in vertically stacked beds or shelves inside controlled-environment buildings or containers. The process uses artificial lights and soilless growing techniques to simulate a crop’s optimal growing environment and control the desired outcome in terms of yield, texture, size, and other characteristics.

What's driving this industry?
Market Sizing

The US vertical farming market is estimated to reach USD 0.4–1.7 billion by 2025

Conservative case

USD 351 Mn

3.1% penetration
Base Case

USD 904 Mn

8.0% penetration
Expansion case

USD 1.7 Bn

15.0% penetration
USD billion02004006008001,0001,2001,4001,6001,800202020212022202320242025
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COVID-19 IMPACT

  • US VF players including Plenty Unlimited, Bowery Farming, AeroFarms, 80 Acres Farms, and Infarm have seen demand for their products increase amidst the Covid-19 outbreak.

  • LettUs Grow has ramped up the development of two vertical farm modules so it can supply fresh produce to vulnerable communities in Bristol, England, during the pandemic.

  • Berlin-based Infarm raised USD 170 million in September 2020 to fund global expansion, as demand for its modular vertical growing system increases

Market Mapping

Hydroponic farm operators account for nearly half of our list of disruptors and total funding in the range USD 1.4 - 1.6 billion.  These companies follow a soilless growing method that places crops’ roots directly in containers filled with nutrient-enriched water without the need for fish farming tanks (as in aquaponics) or air sprinklers (as in aeroponics). Due to ease of use, lower costs, and higher ROI, hydroponic farms are the most popular growing system in the vertical farming industry.

In contrast, less than 10% of our disruptors operate aquaponic or aeroponic growing systems to vertically produce crops. The average funding per start-up in these segments ranges between USD 35 - 60 million.

Incumbents
Growth
Early
Seed
Pre-Seed
Farm Operators: Aeroponics
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Farm Operators: Hydroponics
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Farm Operators: Aquaponics
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Growing System Producers
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AEssenseGrows
AEssenseGrows
AEssenseGrows
AEssenseGrows
AeroFarms
Agricool
AEssenseGrows
Living Greens Farm
GrowX
Kroger
Sobeys
Publix
Greenman Group
Marks and Spencer
McCain Foods
Plenty
Bowery Farming
Infarm
80 Acres Farms
GoodLeaf Farms
Freight Farms
Jones Food Company
Green Spirit Farms
Oasis Biotech
Dream Harvest Farming Company
Oishii Farm
Square Roots Urban Growers
Crop One Holdings
Sativus Tech Corp
Fifth Season (RoBotany)
PlantLab
Nordic Harvest
Green Sense Farms
Farm.One
Local Roots Farms
Greener Roots Farm
Ljusgarda
Big Box Farms
Kalera
Amplified Ag
Ferme d’hiver
Infinite Harvest
Frontier Farms
Ceres Greens
GeoGreens
GreenForges
Emerald Greens
Oppy
GrowUp Urban Farms
Upward Farms
Kappa Farms, LLC
Locals
Fresh Green Farms
Infarm
Agrify
Intelligent Growth Solutions
CubicFarm Systems
Vertical Field
Sativus Tech Corp
Vertical Future
OnePointOne
Gardyn
Agrilution
Urban Crop Solutions
Farm.One
CropBox
GreenTech Agro
AGM Services
Lettuce Evolve
Kalera
Rise Gardens
Babylon
Netled
LettUs Grow
Eden Advanced Technologies

The Disruptors

Hydroponic farm operators are the highest funded

Plenty Unlimited, Bowery Farming, and Infarm are the top three vertical farming (VF) players in terms of funding with a combined haul of over USD 1.4 billion. These three players are hydroponic vertical farming operators that produce similar products—primarily leafy greens, microgreens, and herbs—and compete on price, volume, location, and efficiency. 

Small and independent farmers and less well-funded VF startups tend to operate vertical farms in shipping containers so they can position crops near a point of sale to capitalize on freshness and reduce distribution costs. Given the high cost of purchasing a shipping container facility, often over USD 100,000 per unit, independent farmers cannot easily compete with large VF operators or easily attract mainstream consumers.

Farm Operators: Aeroponics

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Disruptors

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Funding in USD Millions
AeroFarms
238
Agricool
42
AEssenseGrows
32
Watchlist
?
Living Greens Farm
GrowX

Farm Operators: Hydroponics

?

Disruptors

?
Funding in USD Millions
Sativus Tech Corp
Public - Market cap USD 2.5 mn
Plenty
941
Bowery Farming
638
Infarm
605
80 Acres Farms
250
Square Roots Urban Growers
49
Crop One Holdings
47
Fifth Season (RoBotany)
35
GoodLeaf Farms
33
Freight Farms
26
PlantLab
23
Jones Food Company
11
Nordic Harvest
9
Green Sense Farms
1
Local Roots Farms
Unknown
Greener Roots Farm
Unknown
Emerald Greens
Unknown
Ljusgarda
Unknown
Oasis Biotech
Unknown
Kalera
Unknown
Watchlist
?
Dream Harvest Farming Company
Oishii Farm
Amplified Ag
Ferme d’hiver
Infinite Harvest
Farm.One
Frontier Farms
Green Spirit Farms
Ceres Greens
GreenForges
GeoGreens
Big Box Farms

Farm Operators: Aquaponics

?

Disruptors

?
Funding in USD Millions
Upward Farms
142
Fresh Green Farms
Unknown
Watchlist
?
GrowUp Urban Farms
Kappa Farms, LLC
Locals

Growing System Producers

?

Disruptors

?
Funding in USD Millions
Agrify
Public - Market cap USD 186.4 mn
Sativus Tech Corp
Public - Market cap USD 2.5 mn
CubicFarm Systems
Public - Market cap Unknown
Infarm
605
Intelligent Growth Solutions
71
OnePointOne
24
Kalera
Unknown
CropBox
Unknown
GreenTech Agro
Unknown
AGM Services
Unknown
Vertical Field
Unknown
Watchlist
?
Vertical Future
Gardyn
Rise Gardens
Babylon
Netled
Agrilution
Urban Crop Solutions
LettUs Grow
Farm.One
Eden Advanced Technologies
Lettuce Evolve

AeroFarms

Based in New Jersey, AeroFarms, one of the largest disruptors, produces leafy greens using an aeroponic vertical growing system. The company sells locally grown greens to nearby restaurants and grocery stores as well as online. As of October 2021, the company supplies to over 500 grocery stores primarily across the Northeast region of the US including Stop & Shop, Whole Foods, Amazon Fresh, FreshDirect, and Walmart.

The company claims its aeroponics technology yields annual productivity up to 390 times greater than traditional field farming and is packaged conveniently for consumers, ready to consume without the need to wash the product.

As of August 2021, the company operates one farm in New Jersey, with farms underway in Virginia ( 136,000 sq. ft farm, go operational by Q2 2022) and Abu Dhabi (expected to open in Q1 2022) and reportedly 16 more farms in the pipeline. The company also plans to build a new office space and research & development (R&D) center at its global headquarters in Newark. In addition, the company is also planning to expand to the Midwest region via a collaboration project with the World Wildlife Fund (WWF) and St. Louis Controlled Environment Agriculture Coalition (STLCEA). Via the project, the company plans to build its largest plant (spanning 150,000 square foot) at St. Louis MO-IL Metropolitan Statistical Area (MSA).

Besides serving the retail market, the company has also entered into partnerships to further strengthen its presence in the vertical farming industry and to further develop its technology. The multi-year partnership with Nokia Bell Labs (Nokia’s industrial research arm) allows AeroFarms to integrate Nokia’s drone and AI technology into its vertical farming system. AeroFarms also entered into a multi-year research agreement with Cargills (a Minneapolis-based sustainable manufacturer of quality cocoa and chocolates) to improve cocoa bean yields and develop climate-resilient farming practices. It has also partnered with Singapore Airlines to supply greens.

In May 2021, AeroFarms submitted IPO documents to go public via a merger with the Special Purpose Acquisition Company (SPAC) Spring Valley Acquisition Corp, valuing the new entity at USD 1.2 billion. However, in August 2021, though the company received approval from Spring Valley’s shareholders, the minimum cash requirement in the merger agreement was unmet. As per the company, if additional capital requirements are satisfied, the business combination would be completed on or before September 24, 2021, with the stocks trading on NASDAQ under the ticker "ARFM". An update on the possible IPO has not been provided yet. ". In October 2021, however, AeroFarms terminated the merger as the transaction did not meet AeroFarms shareholders' best interest, halting its IPO plans.

Segment:
Farm Operators: Aeroponics
Total funding:
USD 238.0 million
Competitors:
Bowery Farming, Square Roots, Upward Farms, Plenty, Green Sense Farms, 80 Acres Farms, Farm.One
Disruptor Funding History

Farm Operators: Aeroponics:

AeroFarms
Agricool
AEssenseGrows
Living Greens Farm
GrowX

Farm Operators: Hydroponics:

Sativus Tech Corp
Plenty
Bowery Farming
Infarm
80 Acres Farms
Square Roots Urban Growers
Crop One Holdings
Fifth Season (RoBotany)
GoodLeaf Farms
Freight Farms
PlantLab
Jones Food Company
Nordic Harvest
Green Sense Farms
Dream Harvest Farming Company
Oishii Farm
Amplified Ag
Ferme d’hiver
Infinite Harvest
Farm.One
Frontier Farms
Green Spirit Farms
Ceres Greens

Farm Operators: Aquaponics:

The Incumbents

Supermarket giants show interest in on-site vertical farms 

The vertical farming industry has not significantly attracted the attention of large conventional vegetable producers such as Bonipak Produce, Tanimura & Antle, and Duda Farm Fresh Foods. Tanimura & Antle has meanwhile only developed a hydroponics greenhouse in Livingston, California to accommodate consumer demand for fresh and locally-grown foods. However, the industry is seeing large supermarket chains partnering with startups to either set up vertical farms at stores or source vertically-grown produce for their customers. For instance, Kroger, Sobeys, and Publix partnered with startups to set up on-site vertical farms and source fresh produce for consumers. Companies like McCain Foods also invested in startups to support the development of vertical farming technologies.

In-house development

Partnership

Acquisition

Investment

company-logo-0Kroger
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company-logo-1Sobeys
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company-logo-2Publix
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company-logo-3Greenman Group
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company-logo-4Marks and Spencer
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company-logo-5Oppy
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company-logo-6McCain Foods
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Kroger

Kroger, the second-largest retailer in the US, offers its retail services in four major formats—supermarkets, multi-department stores, price-impact warehouse stores, and marketplace stores—under several banners including Kroger, Ralphs, Dillons, QFC, and Smith’s. Its “Zero Hunger-Zero Waste” sustainability initiative, which oversees delivering affordable and fresh produce to consumers year-round, has led to the company’s increasing interest in vertical farming in North America.

Kroger partnered with Infarm, a Berlin-based hydroponic vertical farming company, to develop hydroponic modular farms in North America (November 2019). The partnership was reportedly the first of its kind in the US. The new modular living farms were planned to be established in 15 QFC Kroger stores across Bellevue and Kirkland, Washington. The vertical farms oversee the growth of nine varieties of herb and lettuce. Via the partnership, Kroger expected to develop an in-store farming technology.

To continuously provide its customers with vertically grown produce, Kroger also partnered with 80 Acres Farm, a popular hydroponic vertical farming startup in the US (November 2019). The partnership involved launching a 15-month pilot program to distribute 80 Acres Farm produce (basil, baby cucumbers, tomatoes, and salads) via Kroger’s newly established “On The Rhine” store in Cincinnati. As of March 2021, 80 Acres’ fresh produce is sold across 32 Kroger stores, with plans to further expand the product offering to 316 Kroger stores around Columbus, Indianapolis, Lexington, and Louisville.

Notable Investors

No investor data is available

Funding data are powered by Crunchbase
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