AeroFarms confirmed the US-based vertical-farming business is “continuing to operate” after securing new funds from an undisclosed investor.
Doubts about the future of the business emerged from a WARN notice filed earlier in December with the Department of Workforce Development and Advancement in Virginia saying the company planned to close its Ringgold indoor vertical farm in the state located at Danville.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Efforts to raise new financing had “failed”, AeroFarms said in the notice as it warned 173 jobs would be terminated at Danville.
In the WARN notice in Virginia, AeroFarms said its largest investor – unnamed – had unexpectedly “decided to withdraw any further financial investment”.
However, AeroFarms issued a statement on Friday (19 December) announcing the new funding support but did not clarify if the jobs would be saved.
“Recently, AeroFarms was provided with sudden and unexpected notice that it would not be receiving the necessary funding it required to continue operations,” the statement read.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“Since that time, the company’s circumstances have evolved rapidly. An existing stakeholder has agreed to provide funding to AeroFarms, enabling the company to continue operations and explore strategic alternatives.”
AeroFarms has faced financial difficulties in the past. In September 2023, the New Jersey-headquartered company said it had exited Chapter 11 bankruptcy proceedings entered in June that year.
At the time, AeroFarms had received approval from a bankruptcy court in Delaware for an “asset purchase agreement” with existing investors Grosvenor Food & AgTech and Doha Venture Capital.
Molly Montgomery, a partner at agri-food investor Grosvenor Food & AgTech became acting CEO and executive chair of AeroFarms’ board of directors.
In August this year, the company said it planned to build a second vertical-farming facility in addition to the Danville site, for which it had refinanced debt to “support” ongoing operations.
Just Food has asked AeroFarms to clarify the current operational status of the Danville farm and whether the jobs will now be saved.
Vertical farming, or controlled-environment agriculture, is a capital-intensive industry mainly revolving around leafy greens and herbs. Most companies are early-stage start-ups that usually require external financing and many, if not most, are not generating profits. Some have gone out of business.
Daniele Benatoff, the co-founder and CEO of Italy-based Planet Farms, told Just Food earlier this year that his company was profitable but mainly through diversification.
Asked to explain his own theory of why so many vertical farming operators had fallen by the wayside, he said: “Part of the issue in this sector is it was approached as a pure technology business. But the reality is this is a complex business because it brings together three different technological innovations under one roof.
“There is a software element with pure technology…but there’s also an agronomy element and a hardware and automation element.”
Meanwhile, when AeroFarms entered Chapter 11 in June of 2023 the business said it had “faced significant industry and capital-market headwinds”.
