Aerofarms Stock: When Will Aerofarms Go Public and What Are the Alternatives?

There are 8 billion people in the world today, but we may need to feed 10 billion by 2050. Vertical farming startups are trying to grow more food sustainably. Read on about Aerofarms, one of the buzziest vertical farming companies, and learn if there’s a way to invest in its stock.

David Dierking   Updated April 22nd, 2022

Credit: Plenty

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What is Aerofarms?

Vertical or indoor farming startup Aerofarms is a “public benefit corporation on a mission to grow the best plants possible for the betterment of humanity.”

Aerofarms grows sustainable, environmentally-friendly produce to meet the world’s growing food needs. Its vertical stacks allow growing crops 365 days a year and harvesting as often as every two weeks. Aerofarms claims it can produce nearly 400 times the output of a traditional outdoor farm, using 95% less water and no pesticides.

You can buy leafy greens from Aerofarms in hundreds of stores in the northeastern United States. The company is also expanding to the west of the country. Current retailers include Whole Foods, Amazon Fresh, Walmart, Fresh Direct, ShopRite, and Stop & Shop. Aerofarms has partnered with Cargill on cocoa research and the University of Florida on tomato research.

Aerofarms was founded in 2004 by Ed Harwood, a former Cornell professor and pioneer in aeroponic technology; David Rosenberg, a former NYU professor and tech innovator; and Marc Oshima, the company’s chief marketing officer.

The company is also a Certified B Corporation, a certification awarded to companies that promise to balance profit and purpose.

Where are Aerfarms farms located?

Aerofarms has a facility in Newark, NJ. It is also building facilities in Danville, VA; Abu Dhabi, UAE; and St Louis, MO.

Aerofarms began growing vegetables in 2004, moving into its primary Newark, NJ facility in 2016. It’s only starting to ramp up its expansion plans.

In April 2021, Aerofarms began the construction of a 136,000 square foot, 48 tower facility in Danville, VA. It expects the farm to come online in the second quarter of 2022. The company says it will be the “largest and most technologically advanced aeroponic indoor vertical farm in the world.”

In June 2021, the company announced it had broken ground on a new R&D facility in Abu Dhabi. The facility should come online during the first half of 2022.

In August 2021, St. Louis was selected for the construction of a new 150,000 square foot facility.

Aerofarms plans on having 16 farms up and running by the end of 2026.

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Does Aerofarms have a secret sauce?

Aerofarms is as much a technology company as it is an agricultural one. All vertical farming requires the know-how to grow crops indoors, and the company is protecting its intellectual property. Aerofarms has been granted 13 patents and has 38 pending patent applications.

Aerofarms uses aeroponics for farming, which involves misting the roots of plants with targeted nutrients, water, and oxygen. Because plants are sprayed instead of soaked in water, the method needs 40% less water than some of the more traditional hydroponic methods used by many vertical farms. It can also use much less fertilizer.

Aerofarms employs LED lighting as an alternative to sunlight and digitally controls water distribution, temperature, and nutrient levels. The entire life cycle of the produce from seeding to harvesting to packaging is fully automated, reducing the need for human intervention. Plant genetics are continually being tested and improved. All of this helps to improve yield and lower environmental impact.

Is Aerofarms a publicly traded company?

No, for the time being, Aerofarms is private. In 2021, Aerofarms was supposed to go public via a SPAC merger, but that agreement has since been terminated, likely due to market conditions. Here is what happened.

In March 2021, Aerofarms announced that it would merge with Spring Valley Acquisition Corp, a publicly-traded special purpose acquisition company (SPAC). Under the terms of the deal, Aerofarms would become a publicly-traded company with the ticker ARFM. The merger was approved by Spring Valley shareholders in August 2021. The deal valued Aerofarms at $1.2 billion.

In October 2021, Spring Valley and Aerofarms jointly announced that they would be terminating the merger agreement. No official reason was given, although Rosenberg noted that he felt the deal was “not in the best interests of our shareholders.” The poor performance of other vertical farming SPAC deals could have had something to do with it.

Will Aerofarms go public?

Since the failed IPO in 2021, Aerofarms has not disclosed any new plans to go public. Given the attempted merger with Spring Valley, Aerofarms could be interested in trying to go public again under the right circumstances.

The number of mergers taking place via SPACs, however, has shrunk considerably since the peak in early 2021. The path to IPO could be more challenging the next time around. However, we wouldn’t be surprised if Aerofarms tried again if market conditions improved.

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Who invested in Aerofarms?

Since its initial seed round in 2010, AeroFarms has raised $238 million over several funding rounds. Investors included the Abu Dhabi Investment Office, IKEA Group, celebrity chef David Chang and U.S. Army General David Petraeus.

Aerofarms stock alternatives

If you’re interested in vertical farming stocks, there are a few available for trading on the public exchanges.

One example is AppHarvest (APPH). This vertical farming company headquartered in Kentucky serves the Appalachia region. Its main facility is a 60-acre tomato farm, but it plans on having four farms operating in 2022, adding berries and leafy greens to its product line.

Another alternative is Orlando, Florida-based Kalera (KSLLF). The company operates vertical farms that grow a full spectrum of leafy greens. The company is already serving over 1,200 stores in the United States.

🔔 Learn more about investing in vertical farming stocks.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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