Why vertical farms fail: the bankruptcies, the causes and the lessons for India

The reported failures and restructurings, 2022 to 2025

The list below covers the best-known cases, only as reputable press or the companies' own filings reported them. Several of these companies had raised hundreds of millions of dollars and were valued at over a billion before they failed. Some restructured and kept a farm running; others closed completely. Dates are the filing or announcement dates given in the reports.

AeroFarms: Chapter 11 in June 2023

Food Dive reported on 12 June 2023 that AeroFarms, founded in 2004 and based in Newark, New Jersey, had filed for Chapter 11. The company cited significant headwinds facing the vertical farming industry and said its Danville, Virginia farm would keep operating. It had raised $238 million, and a 2021 SPAC merger that valued it at $1.2 billion had been cancelled. Co-founder David Rosenberg stepped down as chief executive, and existing investors agreed to provide $10 million of debtor-in-possession financing.

AgFunderNews reported on 18 September 2023 that AeroFarms had emerged from Chapter 11. The Danville farm and related assets were sold to a new entity formed by existing investors led by Grosvenor Food & AgTech. The company said it had stopped spending on projects that did not help the Danville ramp-up and turned its Newark facility into research and development. It aimed to finish ramping Danville by the end of 2023 and reach profitability soon after.

Infarm: leaving Europe over energy prices

Infarm was founded in Germany in 2013 and became one of Europe's best-known vertical farming companies. Just Food reported on 17 May 2023 that it was leaving Europe to focus on "regions better suited for indoor farming, with low energy prices and healthy market demand". Chief executive Erez Galonska cited escalating energy prices and tough financial markets. Just Food reported that about 500 workers had already been laid off in a restructuring announced in November 2022.

The company said it would concentrate on North America, with a farm in Toronto and a growing centre being developed in Baltimore. Vertical Farm Daily reported in September 2023 that Infarm's Dutch company had been declared bankrupt, that its Copenhagen operations had closed in April 2023, and that Infarm had raised more than $604.5 million in total. The Infarm story is the clearest reported case of energy prices, rather than technology, forcing a vertical farm out of a market.

AppHarvest, Kalera and Plenty

AppHarvest ran large indoor farms in Kentucky, at Morehead, Richmond, Somerset and Berea, and TechCrunch named it alongside AeroFarms as an indoor-farming company that had filed for bankruptcy. Its press release of 23 July 2023, filed with the US Securities and Exchange Commission, said it had filed for Chapter 11 in the Southern District of Texas, with about $29.5 million of debtor-in-possession financing from its largest secured creditor, Equilibrium. Its Berea farm was to move to Mastronardi Produce for about $3.75 million.

Kalera, an Orlando-based vertical farm company, announced on 4 April 2023 that its main operating subsidiary had filed for Chapter 11, with $5.1 million of debtor-in-possession financing and its Houston and Denver farms continuing. Plenty announced on 23 March 2025 that it had filed for Chapter 11 to restructure its liabilities and focus on premium strawberries, with $20.7 million of financing, keeping its Richmond, Virginia strawberry farm and Laramie, Wyoming research site running.

Fifth Season and Bowery: shutting down

AgFunderNews reported in November 2022 that Fifth Season, a Pittsburgh robotic vertical farm, had closed in late October after raising $35 million. The company had planned a 180,000 sq ft farm in Columbus, Ohio needing $70 million of capital, about $17 million per acre. In a later AgFunderNews interview (April 2023), its former vice-president Chris Cerveny blamed timing and a funding drought, a high burn rate across utilities, growing and brand building, and pursuing several strategies at once.

TechCrunch reported on 4 November 2024 that Bowery Farming, which had raised more than $700 million and was valued at over $2 billion in 2021, was ceasing operations. Agriculture Dive reported on 7 November that 187 workers were laid off in Pennsylvania and Maryland, and listed rising costs, failed fundraising, $150 million of debt from KKR taken in 2022, wavering demand for premium produce, and yield losses from plant disease across several facilities.

The common causes of vertical farm failure

Read together, the reports point to a small set of causes. Most failures combined several of them, and none of the reports blamed the plants for failing to grow. The underlying problem was that the cost of each kg was higher than the price buyers paid, and the gap was filled with investor money until that money stopped. Each cause in the list below is taken from the reports and studies cited in this article.

• Electricity cost: current farms use 10 to 18 kWh per kg of lettuce (Miserocchi and Franco, 2025). Infarm cited energy prices when it left Europe.
• Capital intensity: Fifth Season's planned farm needed about $17 million per acre. Lighting and climate systems are the largest capital items (Meeuws and colleagues, 2026).
• Low-value crops: leafy greens compete with field and greenhouse produce on price.
• Growth before profit: companies built several large farms before one was reliably profitable.
• Funding dependence: Bowery, Fifth Season and AeroFarms were hit when venture funding tightened in 2022 and 2023.
• Debt: Bowery's $150 million loan from KKR added fixed repayments.
• Crop disease: Bowery lost yield to disease in several facilities.
• Too many strategies at once, as Fifth Season's former vice-president described.

The unit economics behind the failures

The arithmetic is simple. Cost per kg is electricity per kg plus labour, inputs and capital per kg. At 14 kWh per kg, the midpoint of the benchmark, and Maharashtra's small non-residential tariff of ₹10.11 per kWh for 2026-27, electricity alone is 14 × ₹10.11 = ₹142 per kg of lettuce. The B2B supplier Hyperpure listed iceberg lettuce at ₹99 per kg on 24 September 2026. A farm in that position loses money on every kg before paying a single worker.

Scale does not fix a negative margin; it multiplies it. The companies above raised money to build bigger farms on the view that costs would fall with size and technology. Some costs did fall, and the Meeuws model shows lettuce can approach greenhouse cost at high light-use efficiency. But lamps still need power per kg, and capital must still be repaid. The farms that survived restructuring, such as AeroFarms and Plenty, narrowed to one site or one higher-value crop.

What is different about vertical farming in India

Some Indian conditions help and some hurt. Labour costs less than in the US or Europe, and several states have tariff categories that suit farms. The MERC tariff order of 28 March 2025 lists indoor vertical farming under Maharashtra's Agriculture – Others category, at ₹7.21 per kWh in 2026-27. At 14 kWh per kg, that is 14 × ₹7.21 = ₹101 per kg against ₹142 on the commercial tariff, a saving of ₹41 on every kg.

Other conditions are harder. Summer heat raises cooling loads, power quality and outages require backup, and Indian buyers are price-sensitive, with field-grown greens cheap in winter. Premium buyers such as hotels and cafés exist in large cities, but each city's demand for exotic greens and microgreens is limited. A farm sized for the market it has, rather than the market it hopes for, is the main defence against the causes above.

Lessons for Indian vertical farms

The lessons below come straight from the reported causes. Each can be checked on paper before any money is spent, which is the cheapest time to find a problem. They apply to a small room on a hotel roof as much as to a large warehouse farm, because the arithmetic of cost per kg against price per kg does not change with size. Scale only multiplies the result.

• Prove the unit economics on one room before building a second. Calculate cost per kg as kWh per kg × tariff plus labour, inputs and depreciation.
• Secure the right electricity category in writing before construction.
• Choose crops whose price per kg is well above the electricity cost per kg, such as microgreens and herbs, and keep commodity greens as a minority.
• Sign buyers before building, and size the farm to the demand you can confirm.
• Keep debt small and repayable from farm cash flow, not from the next funding round.
• Build hygiene and disease control into the design: clean entry, water sterilisation and the ability to isolate one room.
• Run one clear strategy. Fifth Season's former vice-president named pursuing several at once as a cause of its failure.
• Stress-test the plan with yield 20 percent lower and tariff 20 percent higher at the same time.

Getting an independent review of a vertical farm plan

Garden & Acre's Vertical Farm Consulting covers feasibility and due diligence, the business model, system design, audits and troubleshooting, crop planning, and training and SOPs, including for farms built by others. It is the service to use when you want a plan or a struggling farm checked against the causes above. It is priced in a written proposal after an initial call.

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