Indoor Ag Funding in 2025, and Our Expectations for 2026

For all of the hoopla about high profile failures in the indoor ag sector, 2025 was about nothing if not the survival of the nimble.  Farmers focused on unit economics and tech startups solving core labor and energy challenges actually had a good year, and deservedly so.

First, the bad news.  Private funding came in at just a quarter of 2024 levels in the year.  And 2024 wasn’t a good year.  It was around 10% of the 2021 peak.  VC-backed firm  closures continued, notably from Freight Farms and Plenty Unlimited.  International players were also affected, especially in the UK and Singapore. Two larger players – GrowUp Farms and Jones Food Company – went into administration in the UK.  Singapore’s Growy closed within a year of opening, for instance.  

While most commentators of course cite farm economics, particularly energy and labor costs, as the cause of failures, it’s worth looking at the role of the broader VC environment as well.  When we strip out the dominant AI sector, VC funding was basically flat in 2025 over 2024 according to groups like Pitchbook.  The environment has been especially difficult for those that expected their early fundraising success with brand name VCs would continue.  The largest single round in 2025—GoodLeaf Farms’ $37m equity financing in November—would have ranked only 8th in 2024’s funding landscape.

That said, established later stage companies and tech continued to attract funds in indoor ag.  Series B and strategic equity rounds captured half of all disclosed funding.  Tech companies like iUNU, SAIA Agrobotics, and Source.ag all saw strong raises in the year. 

Indoor Ag M&A Bucks the Market Trend

M&A bucked the wider market trend and delivered a good year.  While overall global M&A deal value declined 15% YOY according to PwC, the indoor ag sector recorded 19 major transactions, substantially more than the handful of deals in 2024. Three factors drove this acceleration: the emergence of bankruptcy assets at attractive valuations, accelerating technology acquisitions to secure automation capabilities, and strategic partnerships designed to expand market reach without large capital outlays.  Canadian Growcer’s $2.6m acquisition of container farm pioneer Freight Farms was at just 6% of the $43m that investors put into the company previously.  The $200 million revenue merger of 80 Acres and Soli Organic marked the year’s largest transaction.

Indoor Farmers Turn to Credit Markets

With VC often unavailable, indoor ag companies have made smart use of credit options this year.  In turn, this is leading to more capital discipline.  For example, at Contain, we see that growers are increasingly including pre-owned equipment for at least part of their builds.

Vertical Harvest is the poster child for this approach.  Their newly opened Maine facility is based in a small town proximate to a foodie city, but it’s also far from high cost mega-cities.  The capital stack used to fund the project combines multiple government-related lending programs.  Putting this stack together is challenging and time consuming (CFO Will Morrow talks about it in this interview) but it has the substantial upside of allowing companies to access capital where it wouldn’t otherwise be available.

The listed sector – which has not been kind to indoor ag – had a less ghastly year in 2025 than 2024.  Much of this was down to the restructuring work at companies like Village Farms, which spun off its non-core tomato operations.

Overall, the US map of vertical farms looks very different now than it did in the peak of 2022.  Not only are there fewer farms, but they received less VC funding.  The companies that operated large scale vertical farms in 2022 in the US raised on average $269m each in investment capital.  For 2025, the figure was 40% lower, $162m.  Farms have moved eastwards and are less clustered around high cost metros.  We’re also seeing the beginning of large scale berry vertical farms thanks to Oishii. 

The Outlook for 2026

Our expectations for 2026 funding?  VC remains scarce, creative uses of credit options become more widespread, and M&A continues apace.  We see great opportunity for disciplined operators willing to acquire distressed assets at bargain valuations. Down years are usually when the best returns are made. Indoor agriculture may yet prove this truism.

Our full 45 page “Indoor Ag in 2025” review is available to subscribers on our Contain Insights hub.