January was a month of recovery for the indoor agriculture industry. Some new funding rounds were announced and there was a rebound in the public markets.

1. Private funding saw a big rebound in the month

Two European deals signified a rebound in private funding after a rough 2023.

Intelligent Growth Solutions (IGS), a Scottish vertical farm technology provider, announced a £22.5 million ($28.4 million) Series C funding. This investment will support IGS’s global expansion, including a partnership with Dubai-based ReFarm to build a 900,000 square foot ‘GigaFarm’ in the UAE. This farm aims to grow two billion plants annually, potentially replacing 1% of the country’s food imports​.

Elsewhere, Norwegian tech company Saga Robotics successfully raised $11.5 million to support the growth of its AI-powered agricultural robot, Thorvald. This round included new investors Songa Investments and MP Pensjon, alongside continued support from existing shareholders like Rabo Ventures. The company will use the capital to expand Thorvald’s deployment in American vineyards, strengthen its market presence in the UK, and develop new tools and data services.

2. This month’s announcements bolstered sector interest

At Contain, we track the popularity of the indoor agriculture 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:

This month, the index was bolstered by a couple of announcements. Senator Debbie Stabenow successfully restored $8.5 million in funding for the USDA’s Office of Urban Agriculture and Innovative Production. This funding supports urban, small-scale, and innovative producers, so is especially supportive of indoor agriculture initiatives.

Late in the month, container farmer Square Roots announced a project with the Bill & Melinda Gates Foundation.  It received a $4.4 million grant to evaluate grow systems for crops, to support food security in low and middle-income countries. The project is set to last 16 months, it focuses on creating novel technology platform capabilities​. It kicks off with developing crops for growth in low light conditions.

3. The listed sector had a stellar performance

Indoor agriculture has had a rocky time of it in public stock markets, with delistings plaguing the sector in 2023.  Late in the year, SPAC listing Agrinam exercised a second extension to its timeline for proposed acquisition of container farm firm Freight Farms.

Despite these headwinds, our proprietary Indoor Ag Stock Index™ had a stellar month, up more than 140% over NASDAQ performance.  This was thanks to a strong year from one large stock, Japan’s Denso Corporation, owner of greenhouse firm Certhon.

That said, its outperformance was unrelated to indoor agriculture.  The NIKKEI, of which it is a component, has experienced a rally of late.  During January, the company reported record levels of revenue and operating profit, because of sales recovery, expansion, foreign exchange gains, and profit improvements. These positive financial outcomes, along with optimistic forecasts for the fiscal year ending in March 2024, most likely contributed to the stock’s strong performance.