Per a press
release, urban farming consulting farm Agritecture
has partnered with Harvest Returns, an agriculture investing platform.
the release, the “two companies will work together to accelerate the urban
farming and controlled environment agriculture (CEA) industry across the
country by offering new entrepreneurs a more accessible way to raise capital.”
“The COVID-19 pandemic has revealed the fragility of
centralized food production,” said Chris Rawley, CEO of Harvest Returns.
“Developing additional indoor farms will distribute growing operations closer
to where food is consumed, creating a more resilient food system.”
our founding in 2014, we’ve seen sustained, year-over-year growth in interest
toward urban agriculture, especially amongst industry newcomers,” said Henry
Gordon-Smith, Founder and CEO of Agritecture.
2020, the USDA offered the availability of only $3 million in grants for urban agriculture and
innovative production. Agritecture notes that
the average CapEx, or startup cost, for controlled environment farms modeled
via their Agritecture Designer digital platform is $512,000, and nearly
one-third are over $1M.
this increasing interest and the record levels of funding for the handful of
indoor mega farms, financing continues to be one of the primary challenges for
small and medium-scale CEA businesses,” Gordon-Smith notes. “Yet, we know these
farms can achieve profitability with competitive payback periods, while still
serving their local markets and communities.”
In the release, Gordon-Smith cited Agritecture’s 2019 and 2020 Global CEA Census Reports, produced alongside AgTech solutions provider Autogrow, which show that nearly half of all CEA facilities are being started by those with no previous farming experience. Furthermore, per their recent census, 78% of CEA business founders who attempted to raise money were unsuccessful in doing so through traditional financing sources, such as banks.