Vertical farming was once heralded as the answer to some of the biggest problems facing global agriculture. It promised pesticide-free crops grown in cities, year-round yields independent of climate, and fresh greens harvested just miles from consumers. Investors lined up to fund the future: gleaming towers of LED-lit lettuce, stacked like data servers, feeding the planet without soil or sun. The vision was bold. The headlines were glowing.
But now the lights are dimming.
In just two years, the vertical farming industry has seen a massive implosion. Startups that once raised hundreds of millions of dollars—like Berlin’s Infarm and New Jersey’s AeroFarms—have gone bankrupt or entered restructuring. In 2023 alone, investment in vertical farming plummeted by 91%, as venture capital fled a sector that could no longer disguise its structural problems behind glossy branding and futuristic renderings.
And yet, vertical farming hasn’t disappeared entirely. Its promise hasn’t died—it has simply been downsized. The dream of feeding cities with shipping container farms or replacing field agriculture with AI-driven towers has collapsed. What’s left is smaller, humbler, and perhaps more realistic.
Trend Snapshot / Factbox
| Aspect | Details |
|---|---|
| Trend name | Vertical farming collapse |
| Definition | The decline of large-scale indoor farming due to high costs and energy use |
| Key use cases | Ultra-premium microgreens, pharmaceutical plants, state-subsidized research |
| Current distribution | Retracted globally; active mostly in niche, high-margin segments |
| Notable examples | Infarm (bankruptcy), AeroFarms (restructured), Plenty Unlimited (bankruptcy) |
| Popular hashtags | #verticalfarming #agtech #foodtechfail |
| Target demographics | Urban investors, biotech researchers, premium chefs |
| The “wow factor” | Total environmental control and pesticide-free urban yields |
| Trend phase | Post-hype contraction, consolidation in specialist niches |
From Hype to Bust: The Vertical Farming Crash
It’s hard to overstate how much hype surrounded vertical farming in the early 2020s. Startups promised to transform the way food was produced and distributed. Infarm, for example, raised over $500 million, expanding rapidly across Europe and North America. Their modular vertical farm units were placed inside grocery stores, distribution centers, and restaurants. But the math didn’t add up. Energy costs skyrocketed, equipment required constant maintenance, and logistics remained complex. The company declared insolvency in 2023. According to Sifted, its intellectual property—once valued in the hundreds of millions—was eventually sold for just €1.
In the US, AeroFarms went through a similar arc. Once featured as a leader in sustainable agriculture, it filed for Chapter 11 bankruptcy. Though it has since restructured and returned with a narrowed focus on ultra-premium microgreens, the company’s trajectory reflects the wider collapse of investor confidence in the sector.
Another prominent case is Plenty Unlimited, which had raised hundreds of millions from backers like Jeff Bezos and SoftBank. Despite partnerships with big-name retailers and ambitious construction of large-scale farms, the startup filed for bankruptcy in early 2025. As The Wall Street Journal reported, the company struggled to make its capital-intensive model profitable, particularly in light of rising energy prices and logistical complexity .
The Physics Problem
So what went wrong?
The answer is simple, and brutal: physics and economics.
Growing plants indoors requires energy—lots of it. Artificial lighting, temperature control, humidity regulation, and nutrient circulation all consume power. While LEDs have become more efficient, they are still nowhere near the energy balance of free sunlight. And since plants are only about 1–2% efficient in converting light into calories, the energy input per unit of food remains staggeringly high.
That’s fine when you’re growing microgreens for Michelin-starred restaurants. But when vertical farms attempted to scale into producing bulk salad greens or even staple crops, the costs became unsustainable. Transporting food from a field remains dramatically cheaper than generating artificial day/night cycles in a high-rise.
And beyond physics, the unit economics broke down. Operating a vertical farm requires not only tech infrastructure, but also skilled labor, constant monitoring, and resilient supply chains. Even in urban centers where demand was high, the economics didn’t hold. Startups burned cash quickly, chasing scale without solving the core inefficiencies.
Not Dead, Just Smaller
It’s tempting to see the vertical farming collapse as a total failure. But that would miss the point. The crash was real, but not everything fell apart.
Several applications of vertical farming remain viable—just not for feeding billions or solving climate change.
Vertical farming makes sense in ultra-premium markets. Microgreens, herbs, and decorative plants have high value per gram, short shelf lives, and often demand pristine conditions. Chefs are willing to pay for perfect basil or edible flowers grown hyper-locally. In this market, control matters more than cost.
Second, vertical farms thrive in pharmaceutical contexts, where absolute control over variables like light, nutrients, and humidity is essential. Growing plants for vaccine production or medical research demands predictability, not price efficiency.
Third, public research facilities and government programs continue to explore vertical farming in niche applications—such as space agriculture, closed-loop food systems for remote environments, or climate simulation labs. These are not profitable farms. They are experiments in resilience.
Techno-Optimism Meets Reality
The vertical farm crash is a reminder that not all innovation is progress. The fact that we can grow lettuce in a dark room in downtown Tokyo or London doesn’t mean we should—at least not if we care about cost, energy use, or emissions.
Too often, foodtech is sold as the inevitable future, when in reality, it’s often a speculative bet dressed up as sustainability. The rush to label vertical farming as a “climate solution” overlooked its enormous energy demands. It turned out to be a high-tech detour in the quest for more resilient agriculture.
But that doesn’t mean we must reject innovation outright. The collapse of the vertical farm boom opens the door to more grounded, locally adapted, and less capital-intensive solutions. Instead of betting on skyscraper lettuce, we might invest in soil regeneration, urban agroforestry, or tech-enabled open-air farms that combine data with natural systems.
Closing Reflection
In the end, vertical farming won’t feed the world. But it won’t disappear either.
It will shrink into niches where it performs uniquely well: high control, high value, high specialization. The hype is over—but some value remains. Maybe that’s not a revolution, but it’s a recalibration. And for a sector that flew too close to the LEDs, landing in realism might be the best outcome possible.
If you’re curious how other food innovations are reshaping agriculture—without the crash—check out our story on how food trends are rewriting agriculture.