Growing up – vertical farming sector suffers investment slowdown, but leading firms prove profitability potential

From the outside, Plenty’s new Farm Campus in Richmond, Virginia, isn’t much to write home about. A grey block of a building, it looks like the smaller sibling of the nearby Amazon fulfilment centre, or the medical supplies warehouse that sits a half mile to the north.

Inside, is a different story, as the drab exterior gives way to skeletal steel structures and luminously clean white walls, panelled with endless rows of bright lights and transparent tubing – a vision of an industrial future straight from a science-fiction film set. Still more impressive are the leafy green mini-skyscrapers, incongruous in their clinical setting, which reach 30 feet from floor to ceiling, each one decked with thousands of strawberries. It’s a farm – but not as you know it.

Plenty’s new ‘vertical farm’ – expansion plans aim to make it the world’s largest vertical strawberry farm – is at the cutting edge of farming technology. It’s also a symbol of the sector’s recent challenges. In March 2025, Plenty – which had had nearly USD 1 billion of venture capital backing, including support from Amazon founder Jeff Bezos and Softbank – declared bankruptcy. Plenty emerged from administration two months later as a pared-down organisation, with the new Richmond Farm Campus now its key focus.

A number of vertical farming start-ups have run into difficulties in recent years, but the sector still holds out the tantalising promise of high-quality, sustainably-grown fruit and vegetables available all year round. So, with the global population set to reach 10 billion,¹ is vertical farming the answer to our food worries? Or will its high start-up and operating costs leave investors disappointed?

Farming vs technology

The underlying premise is simple. Inspired by Dickson Despommier, Professor of microbiology at Columbia University – who challenged his students to explore the possibility of feeding the entire population of Manhattan using just 13 acres of rooftop gardens – the first aim of vertical farming is to minimise land use by farming upwards instead of outwards.

The technology is more sophisticated. Modern vertical farms shun soil – instead plants are fed either by nutrient-rich water or a circulating mist. In some farms, A-frames and racks of plants stretch as high as supporting structures will allow – others build forests of hollow tubes peppered with holes for plants to grow through, their roots dangling in thin air.

The indoor environment means farms can monitor and control every variable – light, temperature, atmospheric CO₂ levels, wind speed, humidity, and many more. In the newest farms, artificial intelligence (AI), big data, and robotics analyse and respond automatically to billions of data points each year.

This has led investors to ask – are these futuristic food producers really farms, or are they tech companies?

Read also: Soil-first farming: why regenerative agriculture is gaining ground

Technical promise – commercial fragility

The answer to this question has been key to the challenges the sector has faced. According to Henry Gordon-Smith, founder and CEO of Agritecture, a food systems advisory, “The attractiveness of the novel IP [intellectual property] story…makes farms appear like technology companies, and get higher valuations when fundraising.”²

Over the last decade, more than USD 6 billion has been invested in vertical farming start-ups,³ driven by the excitement of novel technologies. Innovation has been no guarantee of profitability, however. Vertical farms have high day-to-day running costs, which can include heating, maintaining complex robotics and automation systems, and powering the seemingly endless panels of LEDs that replace sunlight. As energy costs have risen, many start-ups have succumbed to the pressure of that most basic of business needs – keeping the lights on.

Many companies went to excess automation, leading them to higher energy costs and less profitability. We are now seeing more simple systems coming up, and they are usually the most profitable ones

Since 2021, major names including Plenty, Germany’s InFarm, US-based Bowery, and AppHarvest have either shuttered for good or faced bankruptcy and restructuring. Henry Gordon-Smith notes, “As the sector goes through a stage of correction in the face of rising energy prices…you will see less emphasis on IP and more on the bottom line.”⁴

Paul Gauthier, Professor of Protected Cropping at the University of Queensland, one of the world’s leading experts in vertical farming, takes a similar line. “Many companies went to excess automation, leading them to higher energy costs and less profitability,” he says. “We are now seeing more simple systems coming up, and they are usually the most profitable ones.”⁵

related content.

system changes.

learn more

FT Rethink

From extreme weather to weight loss drugs – insurers re-write risk management in an age of uncertainty

October 13, 2025

Abundant, clean, sustainable, secure

Those that can make it through the start-up tribulations have several major advantages over traditional farms.

Top of the list is their year-round, high-yield potential. For example, research suggests that vertical farms can grow 30x more lettuce per square metre than traditional farms⁶ (though some vertical farms claim productivity increases of up to 300x). Vertical farms can also accelerate the growing process, enabling as many as 15 harvests of a crop per year.⁷

The controlled environment of vertical farming means there’s often no need for pesticides, a major selling point for many consumers. Some vertical farms are even able to grow, harvest, and package their produce without the need for washing, meaning a significantly longer shelf life – Taiwan’s YesHealth Group says their salads can last up to two weeks.⁸

Vertical farms require 90% less water, making them ideal in water-scarce regions

This efficiency brings other benefits, too. Vertical farms require 90% less water,⁹ making them ideal in water-scarce regions. And with their small footprint and urban potential, they are increasingly seen as an important element for creating food security within highly dense or urbanised populations.

In Singapore, where more than 90% of food is imported,¹⁰ the government supported the founding of vertical farm GroGrace as part of efforts to produce 30% of the country’s food needs domestically.¹¹ Similarly, YesHealth Group has partnered with Mowreq Specialized Agriculture to build Saudia Arabia’s biggest vertical farming facility, as part of the Saudi Vision 2030.¹² In a world beset by geopolitical tensions and fragile supply chains, vertical farming could offer governments a way to bolster national food security.

Read also: Defending the grid – renewables on the frontline as nations invest to build energy security

‘Pain point’ drives market growth

For investors, the potential prize is huge. The total value of the global fresh fruit and vegetables market is already more than USD 850 billion, and is expected to reach nearly USD 1.3 trillion by 2033.¹³

For now, vertical farms are suited to a relatively narrow output. Salad greens like lettuce and rocket work best – experts believe the sector could produce as much as 50% of the US’s leafy greens within a decade¹⁴ – though strawberries, tomatoes and even grapes are now being produced in vertical farming settings, and innovators continue to add to the list of possible crops.

Despite recent underperformance, it is estimated that the global vertical farming market will grow to roughly USD 49 billion by 2033, up from USD 8 billion in 2024.¹⁵ In part, this will be driven by continued innovation, consumer preference, and economies of scale achieved as start-ups mature. It will also be driven by a response to one of today’s chief ‘pain points’. Climate change is challenging food suppliers around the world, with crop yields threatened by drought, heatwaves, floods, wildfires and soil degradation. By taking cultivation indoors, and minimising the need for soil and water, vertical farming builds resilience to these supply chain threats.

related content.

FT Rethinkmobility

FT Rethinkmobilitynet zero

Building trouble: how global road projects threaten climate targets

September 10, 2025

rethink everything®.

learn more

Mike Hedges, CEO of UK-based vertical farming firm GrowUp, which saw revenue growth of 400% in 2023/24, believes this will be a key support for the sector’s continued growth. “I don’t think it’s a matter of ‘if’, it’s ‘when’ every retailer will have a vertical [farming] partner. Whether they build and run them themselves, or whether we’re involved in that, I don’t know. But they have to do it. Because they need resilience in their supply chain.”¹⁶

Several vertical farms have now achieved profitability at commercial scale, proving that high costs need not be a barrier. YesHealth Group’s iFarm was profitable within three years of opening, while GrowUp is expecting to turn a profit this year, boosted by the success of its Unbeleafable range of salad leaves which is a major seller across the UK’s biggest supermarkets. For investors, however, it’s clear that careful selectivity will be essential to navigate the transition from a sector of start-ups to a mature industry capable of delivering on its enormous potential.

Vertical farming is growing up. As it does, it is set to become an important contributor to the shift to a sustainable food system – one that can produce more food using less land and water, and relieve the growing agricultural burden on nature.