CEA farm funding rebounded in July.  The $170m raised was 70% more than that raised in the whole of Q2.  Elsewhere, there were expansion plans and the revival of formerly bankrupt farms.

1. Private CEA farm funding up 70%+

CEA farm funding rebounded in July.  The month’s total haul of $170m was 70%+ more than that raised in the whole of Q2.   This split across three deals:

• Vertical farm major Plenty Ag, one of the few that has not declared bankruptcy, announced a major joint venture.  Plenty and Mawarid have announced a joint venture to grow fresh produce in the Gulf Cooperation Council (GCC) region. This partnership aims to enhance food security and sustainability in the GCC. The project has raised over $130 million to support its goals. The venture plans to begin operations by the end of 2024. This initiative will leverage Plenty’s advanced indoor farming technology. Mawarid’s regional expertise will play a crucial role in the project’s success. The collaboration expects to produce over 900 tons of fresh produce annually by 2026.
• GrowUp recently raised $38 million in funding from Generate Capital to scale its operations. This investment aims to expand GrowUp’s vertical farming capabilities. Alongside this funding news, co-founder Kate Hofman has announced her departure from the company. This transition marks a significant change in GrowUp’s leadership. The new funds will be deployed to enhance infrastructure and technology. GrowUp aims to increase its production capacity significantly.
• Ceragen, based in Ontario, Canada, recently raised $2 million in funding to support its food security initiatives. This funding will help Ceragen enhance its microbial solutions for agriculture. These solutions are particularly relevant to controlled environment agriculture (CEA), where optimizing plant health and yield is crucial. The project expects to see initial results by mid-2025.

2. Industry’s fortunes are slowly reviving

Our Indoor Ag Buzz Index™ combines the popularity of a range of indoor farm-related phrases in the media into an index.   The index was again down by month end, thanks to a quiet market.  

There were just a few announcements this month, signaling a slow revival of the industry’s fortunes:

• Nature’s Miracle recently announced a $5.1 million sales order for its grow lights by AmCann, a Michigan-based cultivation company.  Nature’s Miracle specializes in innovative agricultural technologies, offering advanced grow lights tailored for indoor and greenhouse cultivation.
• iFarm has announced its revival and expansion plans to enhance hyperlocal vertical farming following its recent emergence from bankruptcy. The company aims to establish new facilities across multiple cities. This initiative will focus on providing fresh, local produce. iFarm’s advanced technology will support these vertical farms. The expansion is set to begin later this year. iFarm plans to increase its production capacity significantly to meet local demands.

3. The listed sector saw mixed results season 

Our proprietary Indoor Ag Stock Index™ ended the month down more than a third year-on-year.  A decent chunk of this can be attributed to the yen’s weakness, as it is the denomination of the largest index components.  The index also significantly underperformed NASDAQ during the period.  

There were three notable news announcements in the listed sector this month:   

• AgriTech (ticker: SEED) has entered into a letter of intent to merge with Technologies SGG Canada Inc. (SGG), which specializes in cold storage, controlled atmosphere, indoor cultivation, and waste-to-energy technologies. The merger, valued at $165 million, hinges on SGG’s audited financials and projected sales verification. AgriTech plans to issue a new class of multiple voting shares and absorb certain SGG costs. This strategic move aims to enhance AgriTech’s capabilities in advanced agricultural technologies and sustainable practices.
• Local Bounti Corporation (ticker: LOCL) has announced the expansion of its distribution agreement with Sam’s Club. The company will now fulfill shipments of leafy greens from its new controlled environment agriculture (CEA) facility in Mount Pleasant, Texas, alongside its existing Byron, Georgia, facility. This expansion to six of Sam’s regional distribution centers leverages Local Bounti’s Stack & Flow Technology® to enhance supply chain capabilities and meet the increasing demand for fresh, sustainable produce.
• Nature’s Miracle Holding Inc. (NASDAQ: NMHI) closed its $1.2 million public offering on July 29, 2024. The offering included 5,000,000 shares of common stock, each priced at $0.24. EF Hutton acted as the sole book-running manager. The underwriter has a 45-day option to purchase additional shares and warrants to cover over-allotments, if any.

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