From Bloom to Gloom: Novel Farming Systems See Funding Plummet

Industry insiders expressed alarm when the Novel Farming Systems sector had an unexpected decline in financing in 2023.

Industry insiders expressed alarm when the Novel Farming Systems sector had an unexpected decline in financing in 2023. Once thriving with energy and significant funding, startups now struggle with just $673.2 million in financing, compared to a healthy $2.92 billion the year before.

Investors, adopting a cautious approach, redirected their capital toward models with proven unit economics and financial returns, leaving the novel farming space in the lurch.

The decline in funding was not solely attributed to broader macroeconomic trends but also reflected massive market corrections within the indoor farming realm. AgFunder’s Global AgriFoodTech Investment report, scheduled for release in March, is anticipated to provide a comprehensive overview of the industry’s current landscape.

Meanwhile, a sneak peek into the top 20 funding rounds in Novel Farming Systems in 2023, based on preliminary data from AgFunder, reveals a mixed bag of successes and setbacks.

Ÿnsect’s Series D Success Amidst Restructuring:

France-based Ÿnsect managed to secure a noteworthy $175 million in a series D round from undisclosed investors. Despite unveiling plans to reduce its workforce by 20%, the company demonstrated resilience by focusing on higher-value pet food ingredients, showcasing its adaptability in a challenging funding environment.

AeroFarms Emerges Strong After Bankruptcy:

US-based AeroFarms, specializing in vertical farming for leafy greens, secured $71 million in September 2023 as it emerged from bankruptcy. The company strategically eliminated non-contributing projects and shifted its Newark, New Jersey facility into an R&D operation, emphasizing a commitment to efficient resource allocation.

Protix Partners with Tyson Foods for Growth:

In the Netherlands, Protix raised $61 million from Tyson Foods, highlighting a strategic partnership to build a new facility in the US. The collaboration focuses on utilizing black soldier fly larvae to upcycle manufacturing byproducts into protein, showcasing the industry’s commitment to sustainable practices.

Good Leaf Farms’ CAD78m Syndicated Debt Financing:

Canada’s Good Leaf Farms secured $58 million (CAD78m) in syndicated debt financing from CIBC and Farm Credit Canada (FCC), illustrating continued financial support from traditional sources.

Planet Farms Expands Operations in Europe:

Italy’s Planet Farms raised $40 million in a series A round to fund new facilities in Cirimido, Italy, and north London, UK, emphasizing the industry’s global expansion efforts.

Victory Farms Raises $35 Million for African Expansion:

Kenya’s Victory Farms secured $35 million in a series B round led by Creadev, earmarked for expanding operations in Kenya and Rwanda, with potential entry into Ethiopia, Uganda, and Tanzania.

CH4 Global’s $29 Million for Livestock Methane Reduction:

US-based CH4 Global raised $29 million in a series B round led by DCVC, DCVC Bio, and Cleveland Avenue. The funds are dedicated to building a production facility in southern Australia for Asparagopsis seaweed, aiming to reduce livestock methane emissions.

Stacked Farm’s $27 Million Boost in Australia:

Australia’s Stacked Farm raised $27 million in a series A round, paving the way for the construction of a new 7,200sq m facility in Melbourne.

UniCredit and SACE’s Green Guarantee Supports Planet Farms:

Planet Farms from Italy secured $19 million in debt financing from UniCredit and SACE’s Green Guarantee to further expand its operations.

Intelligent Growth Solutions Raises $15 Million:

UK-based Intelligent Growth Solutions raised $15 million in a series B round, showcasing the global nature of investments in vertical farming technology.

These are just a few highlights from a dynamic and evolving industry landscape. Despite the funding downturn, innovative companies in Novel Farming Systems continue to push boundaries, adapt strategies, and strive for sustainable practices in agriculture. As the AgFunder report approaches, industry enthusiasts eagerly await a comprehensive analysis of the forces shaping the future of agriculture.