When the market was booming, tech investors poured billions into companies designing new ways of farming. Now some of those bets appear to be wilting.
Fifth Season, a Pittsburgh-based vertical farming company, told employees this fall it was shutting down. Berlin-based Indoor Urban Farming GmbH, valued at more than $1 billion, laid off about 500 employees last month. And greenhouse startup AppHarvest, which went public through a special purpose acquisition company last year, has seen its stock sink more than 90% since its 2022 high. After telling investors it was low on funds, AppHarvest recently sold one of its farms and plans to rent it back.
“Our empathy goes out to any startup company in our space,” says Arama Kukutai, chief executive officer of Plenty Unlimited Inc. Plenty, based in South San Francisco, raised nearly $1 billion from investors including Walmart Inc. and SoftBank Group Corp.’s Vision Fund, promising to build the world’s largest vertical farms. Kukutai says getting started in the business is expensive, as is operating complicated agricultural technology, and it’s difficult to make sure each farm turns a profit. Plenty will open its first commercial-scale farm in Compton, California, next year, nearly a decade after its founding in 2014. “We’ll see more companies not survive the next year and 2023,” Kukutai says.
