April’s biggest surprise was the USDA funding CEA farms to the tune of $80m.  The industry also saw an acquisition and a couple of new build announcements. 

1. Private funding rebounded  in April

Private funding – sort of – returned to indoor ag in April.  There were five significant funding events in the month, though three were courtesy of the USDA rather than private investors.  It’s not the first time that we’ve seen the USDA funding CEA farms, but this is on a larger scale:

• Vertical Harvest, based in Maine, has secured nearly $60 million in loans.  Part of the financing was supported by the USDA’s Rural Development Business & Industry Loan Guarantees and Rural Energy for America Program loans. This funding will aid in the development of their multi-story greenhouse facilities, which are designed to produce fresh produce year-round. 
• Oishii, an indoor farming company, recently secured a $15 million loan from the USDA. This investment will support the development of a solar-powered vertical farming facility in New Jersey.  The firm is repurposing a vacant building to grow Omakase and Koyo strawberries.
• Ponix has received a $5 million grant from the USDA to initiate a climate-smart agriculture project in Georgia. This funding will support the development of sustainable farming practices and technologies. 

Elsewhere, Canadian equipment vendor Growcer raised a traditional $3m round from local sustainability investors.

Vertical farmer AeroFarms has recently initiated a new securities offering, aiming to raise a total of $32.7m. As of the first sale date on April 9, 2024, the company has successfully sold approximately $4.98m worth of securities per SEC filings.

2. Funding and expansions buoyed industry sentiment

Our Indoor Ag Buzz Index™ combines the popularity of a range of indoor farm-related phrases in the media into an index.   The index had a strong month, buoyed by the USDA funding CEA farms as we described above.

Greenhouse grower Local Bounti announced plans to expand with a new indoor farming facility in Pasco, WA.  It aims to increase their production capacity and enhance their distribution capabilities across the western United States.

3. The listed sector saw strong results 

Our proprietary Indoor Ag Stock Index™ had a weak month, as in March significantly underperforming the NASDAQ year-on-year.  We attribute this to macro factors, like the weakening of the yen and rebound in tech stocks.

Indoor Ag Stock Index vs. NASDAQ YOY Performance

There were three results this month, with a larger wave to follow in May:

• Cannabis equipment manufacturer Agrify Corporation reported its full-year 2023 earnings, announcing a total revenue of $42 million. This represents a 20% decrease compared to 2022. The company also reported a net loss of $52 million, a larger loss compared to the $35 million reported in 2022.  The company is being acquired by Nature’s Miracle Holding.
• Japan’s Denso Corporation announced a healthy 12% revenue increase thanks to strong sales in the US and Japan.  It’s greenhouse acquisition, Certhon, didn’t warrant a mention in the results.
• Edible Garden reported a 40% increase in produce revenues for the first quarter of 2023 compared to the same period last year. Additionally, the company experienced a significant rise in cut herb revenue, which increased by more than 200% during the same timeframe.  It also returned to compliance with NASDAQ’s minimum bid price requirement.  This requires that listed securities must maintain a minimum closing bid price of $1.00 per share. 

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