The promise of growing fresh produce indoors, close to consumers, attracted billions of rands in investment over the past decade. Vertical farming was widely pitched as a solution to climate risk, food miles, and urban food security, but rapid expansion, coupled with high operating costs, soon exposed the fragility of many business models.
In March 2025, US-based vertical farming company Plenty filed for bankruptcy after raising nearly US$1 billion (around R16,4 billion) in funding since 2014. The company cited unsustainably high costs and thin profit margins as the main reasons for its collapse, a pattern that has been repeated across the industry. Francois van der Merwe, CEO of Clean Air Nurseries Agri Global (CAN-Agri), told Farmer's Weekly that the concept of vertical farming made for a "great sales pitch".
"It's easy to see why it attracted so much investment, but looking at how most vertical farms are run – using expensive LED lighting and highly skilled labour – it's also easy to see why the industry saw such a spectacular decline," he explained.
According to him, a boom-and-bust cycle is typical of emerging industries and does not signal the end of vertical farming. "The next generation needs to learn from the [industry's] mistakes, and that means fundamentally addressing high production costs."
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