AeroFarms filed for bankruptcy

 

AeroFarms filed for bankruptcy, adding to the growing list of vertical farming startups that are collapsing due to a lack of funding, tight profit margins, and rising sums owed to creditors.  AeroFarms joins the likes of lettuce grower Kalera and high-tech greenhouses builder AppHarvest that filed for court protection in April and May this year, respectively.  Vonnie Estes, a VP at International Fresh Produce Association, said that venture capitalists invested heavily in the sector hoping for multifold returns "without really understanding that this is actually just farming." With funding retreating, vertical farming operators are turning toward less capital-intensive options such as utilizing solar energy instead of LED lighting.  The Neward, N.J.-based vertical farming pioneer AeroFarms was valued at $1.2B at its peak when it was considering an IPO debut through a SPAC merger.  VCs deployed $1B into vertical farming startups last year, a figure that has slumped to just $100M so far this year, per Citigroup's AgTech investment banking head Adam Bergman.  However, investors from the Middle East are showing interest in the sector, which could offer vertical farming startups a potential lifeline.