Key Takeaways

The Billion-Dollar Reckoning

The vertical farming failures of 2024 and 2025 didn’t arrive quietly. They arrived with the force of nearly $2 billion in venture capital evaporating in real time. Plenty Unlimited — which had raised $940 million from investors including SoftBank — filed for Chapter 11 bankruptcy protection in March 2025. Bowery Farming, backed by $700 million, shut down operations in late 2024. AeroFarms, after raising over $300 million, had already gone through bankruptcy proceedings in 2023. AppHarvest. Fifth Season. The list kept growing. By mid-2025, fourteen controlled environment agriculture companies had filed for bankruptcy, and the industry was left sorting through the wreckage.

But the wreckage tells a story — and it’s not the story that most headlines ran with. This wasn’t a failure of indoor farming as a concept. It was a failure of a specific playbook: raise enormous sums of venture capital, build showcase facilities, figure out the farming later. The companies that survived — and some are thriving — followed a fundamentally different approach. Understanding the difference matters for anyone building, investing in, or operating an indoor farm today.

Four Patterns That Killed the Biggest Names

When you study the companies that went under, the failure patterns repeat with almost eerie consistency.

Too Much Easy Money, Too Fast

The venture capital boom of 2020–2022 flooded CEA with capital from investors who understood software scaling but not agricultural economics. The implicit thesis was simple: build the biggest facility possible, optimize later. Plenty raised nearly a billion dollars before demonstrating repeatable unit economics at scale. The funding itself became the product — each round justified by the promise of the next one, not by pounds of produce sold at a profit.

This created a perverse incentive structure. Companies that raised the most money faced the most pressure to deploy it quickly, which meant building massive facilities and hiring expensive teams before they had proven that the underlying economics worked at any scale.

Tech Company First, Farming Company Second

Several of the highest-profile failures were, at their core, technology companies that happened to grow lettuce. Their executive teams came from Silicon Valley, not agriculture. Their engineering budgets dwarfed their agronomy budgets. They built custom robotics and proprietary automation systems before proving that their growing methods could consistently produce crops at a competitive cost.

The result was organizations where software engineers outnumbered growers, where IT salaries far exceeded agronomist pay, and where the cultural emphasis was on technical sophistication rather than yield per square foot. When capital dried up, these companies discovered that their technology hadn’t solved the fundamental challenge: growing food profitably.

Massive Facilities Without Secured Buyers

Perhaps the most consequential mistake was building large-scale production capacity without first securing customers for the output. As Nick Genty, CEO of AgEye Technologies, noted in The Packer in March 2025, operators need off-take agreements for at least 50 percent of their output before breaking ground. The inverse approach — speccing facilities based on production capacity alone and assuming the market will absorb whatever you grow — has been a consistent failure pattern.

This isn’t a theoretical risk. Multiple operators built facilities capable of producing millions of pounds of leafy greens per year, only to discover that retail buyers already had supply relationships they weren’t eager to disrupt, and that the price premium for “locally grown” didn’t hold up when the product looked identical to field-grown alternatives on the shelf.

Overproducing Into a Saturated Market

The fourth pattern was a collective one. Nearly every well-funded vertical farm chose to grow baby greens — lettuce, arugula, spinach — because they were technically the easiest crops for the controlled environment. The market for premium salad greens, while real, simply wasn’t large enough to absorb the output of dozens of well-funded competitors all entering simultaneously. The result was downward price pressure on exactly the products these companies needed to sell at premium prices to justify their cost structures.

What the Survivors Are Doing Differently

The narrative that vertical farming “doesn’t work” is convenient but wrong. Several companies are not only surviving — they’re expanding. What separates them from the casualties?

80 Acres Farms: Self-Funded Discipline

80 Acres Farms avoided the venture capital arms race entirely, relying instead on revenue, debt financing, and disciplined capital deployment. The company’s $140 million bond expansion demonstrated that patient, measured growth could attract institutional capital without the growth-at-all-costs pressure that venture funding creates. Tisha Livingston, speaking at Indoor Ag-Con, emphasized that the company had been “extremely cautious” in spending — a phrase you almost never heard from the companies that went bankrupt.

The 80 Acres approach also reflects a broader critique Livingston has made of the industry: the lack of information sharing among operators has held everyone back. Companies guarded their data as if they were competing software startups rather than participants in an agricultural sector where shared knowledge accelerates everyone’s progress.

Oishii: Premium Product, Premium Price

Oishii took a different but equally disciplined path. Rather than competing in the commodity greens market, the company built its entire operation around premium strawberries — a crop with genuine consumer demand for year-round availability and a price point that supports the higher production costs of indoor farming. Its $150 million Series B was backed by measurable market traction, not speculative projections.

Critically, Oishii’s acquisition of Tortuga AgTech addressed one of the industry’s persistent cost challenges, reducing harvesting costs by approximately 50 percent. This wasn’t automation for automation’s sake — it was targeted investment in the specific bottleneck that most affected unit economics.

AeroFarms: The Turnaround That Matters

AeroFarms’ story may be the most instructive. After filing for bankruptcy in 2023, the company restructured, abandoned its multi-facility expansion plans, and focused operations on a single facility. It hired experienced food production professionals and shifted its market focus to microgreens, where it now controls roughly 70 percent of the retail market.

The restructured AeroFarms is reportedly profitable — a remarkable turnaround that validates the thesis that the technology works when paired with farming discipline, market focus, and right-sized operations. It also suggests that some of the distressed assets from the bankruptcy wave may find productive second lives under operators with more realistic ambitions. From AeroFarms to Profitability: The Turnaround Story That Could Redefine Vertical Farming

The Quiet Expanders

Beyond the headline names, companies like Little Leaf Farms, BrightFarms, and Eden Green Technology continue to expand methodically. What they share is a lack of drama: controlled growth, established customer relationships, and capital expenditure tied to contracted demand rather than projected capacity. They’re building the industry’s future without building press clippings.

The Structural Lesson: Integrated Systems Over Bolted-On Tech

Across the survivor companies, one structural pattern stands out: the operations that work are the ones where facility design, growing systems, environmental controls, software, and market strategy function as an integrated whole — not as separate components assembled after the fact. The companies that failed often treated technology as something layered on top of a farming operation, rather than something designed alongside it from day one.

This is the disconnect that the turnkey approach to indoor farming is designed to address — system design, software, and agronomic support delivered as an integrated package rather than bolted-on afterthoughts. Whether that integration comes from a single provider or a tightly coordinated ecosystem, the principle holds: farms built as coherent systems outperform farms assembled from parts. Why “Farmer-First” Technology Beats “Tech-First” Farming Every Time

What This Means for Growers and Investors

The vertical farming industry is not dead. It is being repriced. The era of blank-check funding for speculative megafarms is over, and what’s replacing it is more demanding but also more sustainable: smaller initial builds, proven unit economics at each stage, off-take agreements locked before construction, and technology investments tied to specific cost reductions rather than impressive demos.

For growers evaluating the space, the lesson is clear: start with your market, not your technology. Identify the crops, the buyers, and the price points first. Then design the facility to serve that demand. Secure at least half your expected output through contracts before committing capital. And be deeply skeptical of any technology that can’t demonstrate a clear, measurable path to reducing your per-unit production costs. Building Your First Indoor Farm: The Off-Take Agreement Mistake That Kills Most Projects

For investors, the recalibration is equally straightforward. The companies worth backing in the next phase of CEA will look less like software startups and more like well-managed food production businesses — with the data infrastructure, agronomic expertise, and customer relationships to match. The industry’s survivors have proven that indoor farming works. The question was never whether you could grow food indoors. It was whether you could do it as a business.