2021 indoor ag funding was a banner year for industry funding with private fundraising tripling, M&A accelerating and even moves into public listings, albeit with mixed results.

The path from here is less certain as investors balance their desire to see results from earlier investments with their need to allocate record amounts of capital.

Private Market Funding

Private funding flowed plentifully to indoor agriculture firms in 2021, tripling the amount seen in the prior year. Numbers of deals were up significantly also, by more than three times.

For the first time, two of the four largest deals were outside of the US. The strongest quarter was Q2, equaled in a resurgent in Q4.  The briefing paper includes data on the location, category and size of investments, alongside discussions of key investors.

Notable new investors into the sector in 2021 indoor ag funding included commodities major Cargill, financial services company Barclays and several celebrities, such as, F1 racing driver Lewis Hamilton.

The trend reflects that seen in the wider venture capital and private equity markets, which saw record investment in 2021.

Public Stock Markets

Though the universe is growing, public listings are limited in the indoor agriculture sector.

2021 saw four new listings, of which one –greenhouse grower Local Bounti – was a SPAC merger.

Combined market capitalization of the four new listings is under $1bn, well under 1% of the sector’s total.  All four new listings are now trading under their IPO or merger price.

In addition, vertical farmer Aerofarms abandoned an attempt to list via a SPAC merger in fall 2021.

The sector is primarily listed on NASDAQ, and suffers from poorer return on assets and revenue growth than the exchange as a whole.  The market has been unforgiving when it comes to revenue projection cuts, as grower AppHarvest discovered after cutting guidance this year.

Download the full briefing paper on Contain Insights.