Billion with a B
Spring started with U.S. vertical farming company Plenty filing for bankruptcy. According to the press release, the company isn’t shutting its doors completely and will still operate its strawberry farm in Richmond, Virginia, and its plant science R&D facility in Laramie, Wyoming.
Despite some playful back and forth when Plenty took a stab at our stacked approach and we lobbed it back, we are all fish in the same pond and what happens in this industry matters to us. Before the skeptics pen an obituary, we must give credit where credit is due.
Plenty raised $1 billion from high profile investors like Walmart, Softbank, and Jeff Bezos. They landed a partnership with one of the largest global berry brands, Driscoll’s, to grow strawberries indoors. They acquired Bright Agrotech in 2017 and brought a real farmer’s perspective to their leadership team (who seems to have disappeared since then) but was a move ahead of its time. They did a lot of things right.
The writing might have been on the wall in December 2024 when they announced the closure of their leafy green farm in Compton to focus on strawberries, but we hope this is not the end of the road. This bankruptcy could be a transformation for the better.
With a renewed focus on growing strawberries year-round, Plenty could find their niche like Oishii did. Oishii, the start-up who first made headlines for its $50 box of Japanese strawberries, have since proven that proprietary tech and a premium product could be a winning recipe in indoor agriculture.
Why raise money?
If you had a giant pot of money, wouldn’t you want to make the world a better place? The problem was not selling the dream for a better future, but expecting a giant return.
Before we autopsy all the vertical farming companies that went bankrupt, let’s take a step back.
Raising money for climate adaptation is difficult on a good day. Climate adaptation is a very broad term for a lot of different types of businesses. Climate mitigation tackles the root cause of climate change (e.g. reducing greenhouse gas emissions) and climate adaptation increases our societal resilience to the changing climate (e.g. growing food indoors, fireproofing houses).
Only 1/10th of investment in climate tech goes toward adaptation. That is a very small slice of the pie. No one wants to invest to prevent the house from catching fire, until the heat from a burning roof is too much to bear.
So while investors may be wary about investing in vertical farming after a string of collapses, it should not (and cannot) deter investors from the bigger picture of investing in a more resilient world. That is the nature of innovation – it requires big leaps of faith and visionary leaders who choose action over apathy.
[Side note: Political motivations are fueling a BuildCanada movement that is shifting the fundraising landscape for vertical farming on this side of the border. With strained relations between Canada and the U.S., there is a renewed interest in “homegrown” funding and companies that improve resiliency (like ones that increase domestic food production) are now part of the national security conversation.]
“Why Billionaires Can’t Make Vertical Farming Work”
This succinct piece by Henry Gordon-Smith (a name familiar to anyone in our industry) sums up the key causes behind the slew of recent bankruptcies.
Gordon-Smith, Agritecture CEO and indoor agriculture expert, unpacks the tech hype, the worker gap, the fantastical crop promises (square watermelons anyone?) and the trough of disillusionment.
“They weren’t just growing lettuce—they were pitching indoor watermelon and fruit trees in the early days. Could you technically do it? Sure. Should you? Economically, no way. Not unless you’re farming for headlines instead of harvests.” – Henry Gordon-Smith
This quote pulls back the curtain on what it takes to secure attention and capital from investors. EchoTech Capital managing director Adam Bergman emphasized this gap in his comment to AgFunderNews’ story about Plenty’s pause.
“To appeal to investors, [many vertical farming companies] put together business plans and financial models that in hindsight were unachievable.”
These autopsies of Plenty reveal that vertical farming is just . . . farming. AgTech is still ag first. Like one commenter wrote under Gordon-Smith’s post, you “can’t outspend biology.”
It forces us within the industry to choose a side. Like in the folktale of The Emperor’s New Clothes, don’t be the vertical farming company telling the emperor you love his new “clothes” when you could be the one telling the “naked” truth. This story reminds us to question authority, think critically, and not be afraid to speak up when we see something that is not right or true – and it’s the only way we’re going to make it through the sobering trough of disillusionment.
What’s next?
If you’re pessimist, you’re thinking, “Oh a bunch of bankruptcies? This industry isn’t viable, shut it down!” But, come on now, that would be like throwing the baby out with the bathwater.
Josh Siteman who works with Intravision Group spoke up for the value of vertical farming in a recent Substack post where he hoped to shed light on the overexposed and underexplained vertical farming industry. “It’s not a replacement for traditional farming. It’s not going to magically make droughts disappear or restore global equity in food distribution. What it can do is produce high-quality crops; leafy greens, herbs, berries, nutraceuticals, even pharmaceutical-grade compounds, in places where water, arable land, or climate stability is in short supply. And that’s not nothing.”
Gordon-Smith would say “less hype and more operational excellence” is what’s demanded in vertical farming’s next chapter.
Here at Growcer, we rally behind the decentralized approach. We’ll pull the point about “building local-first and not global-everything” and make it our manifesto. We’ll double down on our training offerings and white glove service because we know our customers’ successes are our own. We’re modular, moldable, and measured in making vertical farming part of the mix of a resilient food system.
But, whether or not you think the decentralized or centralized approach is best, the truth is that many approaches can work. Anyone paying attention these days can see old scripts are no longer relevant. Nothing makes sense. But this is a good place to start. Let’s shake things up. Let’s get off the sidelines. Less hype, more operational excellence.
Making a better world is filled with contradictions, but that doesn’t mean we don’t get to try to build one.
Action over apathy. Every time.
