The CEA Industry in February 2024

March 4, 2024



Image

The CEA industry saw a month of highs and lows in February.  On one end, we saw the largest fundraise since the beginning of 2022, on the other another bankruptcy.

1. February saw the largest funding since early 2022

    The biggest news was from a Japanese specialty strawberry grower, Oishii, which raised $134 million in Series B funding.  The round was led by Japan’s telecommunications giant NTT, with contributions from Bloom8, McWin Capital Partners, the Japan Green Investment Corporation for Carbon Neutrality, Yaskawa Electric Corporation, Mizuho Bank, and Mitsubishi Shokuhin Co., Ltd.  It’s the largest round in the CEA industry since vertical farmer Plenty Ag’s $400m Series E round in early 2022.

    Oishii is right on trend with its focus on flavor and on year-round strawberries. Oishii says that the investment will accelerate growth by opening a solar-powered vertical farming facility, expanding its distribution to new markets, and investing in R&D projects centered around breeding, robotics, and automation.

    There were two smaller fundraises during the month.  Hippo Harvest, a robotics startup, recently secured $21 million in Series B funding led by Standard Investments, with participation from Congruent Ventures, Amazon’s Climate Pledge Fund, Hawthorne Food Ventures, and Energy Impact Partners.   The raise was at $145m according to Pitchbook.  The Company has repurposed general use robots for the greenhouse.  This investment aims to scale the company’s greenhouse operations and expand its product offerings into new categories of leafy greens.

    Agriloops, a French aquaponics company, secured $14m (€13m) in a funding round that included significant contributions from a crowdfunding campaign on the Sowefund platform. The funding is for construction of Mangrove #1, intended to be one of Europe’s largest aquaponic farms.  It will produce shrimp, fruit, and vegetables over a 1-hectare area in Brittany.

    2. Industry buzz was dominated by a mushroom bankruptcy

      At Contain, we track the popularity of the CEA industry through its mentions in the media.  Our Indoor Ag Buzz Index™ combines the popularity of a range of indoor farm-related phrases in the media into an index.

      The chart below shows progress over the past year, with interest bottoming out in December and recovering since:

      Indoor Ag Buzz Index vs. Prior Year

      Smallhold, a Brooklyn-based specialty mushroom grower, filed for Chapter 11 bankruptcy protection on February 18. The filing, which occurred just two days after co-founder and CEO Andrew Carter announced his departure, revealed liabilities between $1 million and $10 million and assets valued between $10 million and $50 million.

      Elsewhere, the USDA announced $144 million in grants to help farmers add renewable energy technology, like geothermal, to their farms.

      3. The listed sector had another strong month 

        Our proprietary Indoor Ag Stock Index™ had another good month, up nearly 70% over NASDAQ performance year-on-year, adjusted for stock splits.  This was again thanks to a strong year-on-year performance from Japan’s Denso Corporation, owner of Certhon, a greenhouse firm.  As we noted last month, this is due to strong NIKKEI performance than it does with its indoor agriculture holdings.

        Meanwhile, there was another management restructuring at grow system firm AgriFORCE according to Dow Jones Newswires.  Interim CEO Richard Wong returns to his CFO role, and Jolie Kahn has joined the firm as executive turnaround consultant. The firm also announced that it had been awarded a patent.

        Finally, farm equipment vendor Agrify Corporation announced its smallest ever loss, with full year results to follow by the end of this month.  Encouragingly, it says that it expects to hit cash flow breakeven in the second half of 2024.


        Share on socials!