May was one of the quietest months since we began tracking the sector, with just two funding events.  One increasing trend is joint ventures in the sector. We saw two this month, from Village Farms and Swiss Life.

Zordi Secures Series B Funding

Boston-based Zordi announced on May 1, 2025 that it closed a Series B funding. The round was led by Khosla Ventures with participation from Shinhan Ventures, Yanmar Ventures, DSC Investment, and Tech Council Ventures. The capital will accelerate deployment of its Robotics Foundation Models and next-generation scouting and harvesting robots. These enable delicate tasks such as strawberry picking and plant pruning with the aim of cutting labor costs by up to 80% while improving crop quality and consistency. To date, Zordi has raised $20 million across six funding rounds.

Swiss Life Asset Managers, the investment arm of leading European insurance major Swiss Life Holding AG, has formed a joint venture with Milan-based Planet Farms to expand vertical farming operations across Europe, the Middle East and Africa. The partnership will raise up to €200 million ($227 million) in initial funding. This includes a €125 million ($142 million) contribution from Swiss Life, to develop a flagship 20,000 m² vertical farm near Como, Italy, and replicate the model in the UK and Scandinavia.

Village Farms Privatizes Fresh Produce Segment

Greenhouse major Village Farms entered into an agreement  to privatize its Fresh Produce segment by transferring its Marfa II and Fort Davis greenhouse assets and related distribution operations to Vanguard Food LP in exchange for $40 million in cash and a 37.9% equity interest in the new joint venture, which is backed by private equity firms including Sweat Equities. The latter is led by Charlie Sweat, former Earthbound Farms CEO.  The JV will pursue a roll-up strategy for North American produce brands. The transaction, expected to close in the second quarter of 2025, leaves Village Farms holding its Canadian greenhouses along with the Marfa I and Monahans sites for potential cannabis expansion.  This marks the culmination of its long-standing shift from tomato cultivation toward high-growth cannabis production.

Listed Company Performance: Q1 2025 Results

In the public sector, there was a mixed bag of earnings announcements.  Retailers struggled, while growers saw progress:

GrowGeneration Reports Lower Sales

GrowGeneration, a specialty hydroponic retailer, posted first-quarter 2025 net sales of $35.7 million, down 25.4% year-over-year. It closed 19 underperforming stores and faced softer e-commerce and durable-product demand. Gross profit fell 21.5% to $9.7 million, yet gross margin expanded to 27.2% on a higher mix of proprietary brands. Operating expenses declined double digits thanks to store consolidations. GAAP net loss widened modestly to $9.4 million, with the Cultivation & Gardening segment bearing most of the decline while Storage Solutions sales held steady. The company finished the quarter debt-free. It guided second-quarter revenue above $40 million as it pivots toward B2B and digital channels.

Hydrofarm Holdings Group Faces Challenges

Equipment supplier Hydrofarm Holdings Group reported first-quarter 2025 net sales of $40.5 million, a 25.2% decline from $54.2 million in Q1 2024. Net loss widened 14.1% to $14.4 million, compared with a $12.6 million loss, in Q1 2024. Geographically, U.S. net sales of $32.3 million outperformed Canadian revenues of $9.0 million, where oversupply in the cannabis industry drove steeper declines. Proprietary branded products, which grew to 55% of total sales, provided sequential margin improvements despite headwinds.

iPower Inc. Sees Revenue Decline

Online retailer iPower Inc. posted fiscal third quarter 2025 revenue of $16.6 million, a 29% decline from Q3 2024. This was driven by lower sales volumes amid inventory constraints, reduced promotional and clearance activities, and a notable drop in Amazon orders. The company recorded a net loss of $339,599, reversing a $1.02 million profit a year earlier.  The Amazon channel proved the weakest performer. Direct-to-consumer and professional trade channels exhibited relative resilience thanks to improved supply-chain management.

Local Bounti Reports Growth

Greenhouse grower Local Bounti reported first‐quarter 2025 net sales of $11.6 million, a 38% increase from Q1 2024.  Adjusted gross margin improved to 29% from 24% a year earlier. The company’s net loss widened by 57% to $37.7 million, driven largely by higher interest expense and depreciation. Operationally, meaningful yield improvements at the Georgia facility lifted production efficiency. The Washington and Texas sites began contributing to sales, though the Texas facility’s three‐acre reconfiguration temporarily constrained utilization ahead of full commercial production in Q3 2025. Expanded retail partnerships—including new listings with Walmart, HEB, and Brookshire’s—and the launch of proprietary salad kits and basil programs strengthened distribution and underpin Local Bounti’s goal of achieving positive adjusted EBITDA by the third quarter of 2025.

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Featured image courtesy of Unsplash.

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