While the markets were flourishing, it was found that the tech investors had injected billions into firms. These firms were planning to design new ways to farm. But few such bets now appear to be dwindling, reports Bloomberg News.
A vertical farming startup known as Fifth Season, based in Pittsburg, has told employees that it plans to shut down. Another company based in Berlin Indoor Urban Farming GmbH, valued at $1 billion, cut its workforce by laying off 500 employees in the past month.
AppHarvest, another greenhouse startup, went public using a special-purpose acquisition company in the past year. This company has witnessed the stocks of the company plunge beyond 90% since its high in 2022. The company revealed to its investors that it was running short of funds. As such, it has disposed of one of its farms and is planning to rent it back.
According to AgFunder, more than $2.2 billion was raised in 2021 by the novel farming companies. Out of these, vertical farming and grow houses of the greenhouse style have tempted and appealed to people more.
Vertical Farming – What it is?
Bloomberg News reports that vertical farms are one in which crops are stacked layer by layer in warehouses. These warehouses are equipped with irrigation systems and appropriate lighting, and they use sensors to monitor the plants’ health and regulate watering.
What do These Systems Promise?
This system of farming promises to maintain the proper health of the plants. Effects of climate change include extreme changes in weather; under such circumstances, indoor farming will be durable. Not only that, but it will also prove to be space-efficient. And will also cater to feeding the swelling population.
Bloomberg News reports that not all firms are dwindling. Some of the stalwarts in the field, like that of Plenty, are one of the largest players in indoor farming. It raised as much as $400 million in January. Another firm known by the name Soli Organic Inc., in October, was founded, closing its funding round at $125 million.
What are the Challenges of Indoor Farming?
One of the biggest challenges indoor farming faces is that it must not just flourish in software application, but farm design, robotics, and agricultural science are other areas where it must excel.
Indoor Urban Farming in Berlin which operates under the banner Infarm, is struggling with the escalating energy cost in Europe. AppHarvest averted a cash crunch after it secured a loan.
What Does the Cost of Indoor Farming Include?
The cost of indoor farming includes expenses incurred on heating, cooling systems, and proper lighting and costs $300 per square foot.
Indoor agricultural startups are vulnerable to a struggling fundraising environment. Unless a farm can show that it has attained adequate scale and is capable of selling its products, it may not be able to continue its funding operations.
