PitchBook Analyst Note: Cultivating Opportunities in Indoor Farming

This report was reuploaded on February 3, 2021, due to an error in a chart on page 4.

The agriculture industry has undergone major disruptive changes that have both challenged the ability to harvest produce and shaken consumer confidence. Labor shortages have impeded harvest potential, and increasing instances of foodborne illnesses have led to extensive produce recalls. Controlled Environment Agriculture (CEA), also known as both vertical farming and indoor farming, has been identified as a growing strategy that offers many benefits over conventional methods.

Our latest analyst note provides an overview of the CEA opportunity. Our findings include:

• The COVID-19 pandemic exposed and exacerbated pre-existing vulnerabilities in the global food supply chain, which led to significant food waste.

• Investor interest in CEA surged in 2020, reaching $929.0 million invested across 41 deals in the US. This is over 2x greater than the 2019 aggregate deal value.

• Technology advancements in robotics, computer vision, and artificial intelligence & machine learning (AI & ML) are reducing the cost to build and operate CEA facilities and improving productivity, thereby enhancing the sector's attractiveness.