Updated: Feb 6
As climate change becomes an increasingly pressing issue, many recognizable figures are endorsing hydroponics: the indoor farming method that uses 90% less water than traditional farming. Figures including Bill Gates, Justin Timberlake, and Natalie Portman are investing in organizations dedicated to this modern style of farming, bringing attention and capital with them.
While Controlled Environment Agriculture (CEA) only accounts for a small portion of American crop output, the number is undoubtedly growing, and at an unprecedented rate. Pitchbook Data reports that investments in aquaponics farming more than doubled from 2019 to 2020. Studies from Nasdaq.com show that the "The U.S. vertical farming industry is estimated to have been $3.3 billion in 2020 and growing at compound annual growth rate of 25.2%, is expected to reach $31.6 billion by 2030." Bill Gates’ Breakthrough Energy Adventures recently helped a hydroponics startup raise $50 million. Clearly, there is a bountiful future for the industry with billions of dollars invested in both private and public sectors in 2021.
While hydroponics may have previously been viewed as an alternative farming method, its increasing popularity suggests that the new kid could soon cement itself as a mainstream mode of agriculture as agtech continues to advance. Concerns about climate change make indoor agriculture even more enticing to investors and consumers alike. Additionally, because indoor farming feels no effects of seasons changing and climate irregularities (such as drought and flooding), farmers can cheaply and easily predict the price and time needed to cultivate crops year-round.
Companies like 80 Acres Farms are revolutionizing just that. 80 Acres Farms’ vertical farming yields fresh, tasty produce, found in popular grocery stores like Whole Foods and Kroger are quickly expanding. Shaw Joseph, the Managing Director of General Atlantic (an investor in 80 Acres Farms), explained that “with global food consumption increasing and growing threats impacting supply chains and food security, there is a pressing need for healthy, fresh and local foods that are grown in more sustainable and cost-effective ways.” This assertion is on every CEA investor’s mind right now, and the industry is ready to grow.
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Kavya Uppalapati is a student at the University of Michigan Ross School of Business, journalist, and Director of Content Development here at OneGrow.