This year’s Indoor AgTech Innovation Summit is an important meeting point for the global indoor agriculture ecosystem. With two days dedicated to deep discussions covering the CEA landscape, energy efficiency, and financial capital, five experts from CITI, Invest NYC SDG Initiative, Sundrop Farms, UNFI, and WWF share the latest trends and current topics facing the sector.
Finding capital
Adam Bergman, Global Head of AgTech Investment Banking, CITI, USA: “Once indoor farming companies grow enough to achieve profitability, a broader set of financing tools will become available. Most next-generation greenhouses and vertical farms have been financed by equity capital from venture capital, family offices, growth equity, and sovereign wealth funds. However, more established companies with multiple farms operating profitably will have access to lower-cost and less- or non-dilutive financing options that include bank debt, infrastructure funds, mezzanine debt, municipal finance, private equity, and project finance.
The indoor farming sector is likely to follow a similar path that occurred with solar companies more than a decade ago. At that time, there was a shakeout in the sector. More established solar companies with profitable business models had access to lower-cost capital options, including project finance, and were able to get a competitive advantage over newer entrants that were unprofitable with less proven technology.
Ultimately, many of the next-generation solar companies that depended on higher-cost equity became uncompetitive and either went bankrupt or were sold at a low valuation. I expect to see a similar pattern happening in indoor farming during the next 24 months with a few industry winners both in high-tech greenhouse and vertical farming.”
Read the entire article at Indoor AgTech