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Is indoor farming about to have a moment?

Four years ago, the vertical farming startup Bowery opened what it called the first “post-organic” farm, growing pesticide-free leafy greens inside a warehouse in New Jersey. Now its products are in 850 stores, and the company just announced a new $300 million round of funding. Has indoor farming reached a tipping point?

The business model is feasible now, says venture capitalist Hans Tung, a managing partner at GGV Capital, one of the investors in the new round and an early investor in the startup. Lighting is one of the biggest expenses for indoor farming, but the cost of ultra-efficient LED lights has fallen steeply over the past decade. Automation has advanced enough that it’s cost-effective to do much of the work inside an indoor farm with robots. Software to manage complicated growing systems has also advanced. “A combination of software, hardware, and the price of key inputs [can] make it affordable,” he says. “Otherwise, it’s too expensive.”

Growing food in a warehouse has some advantages over traditional agriculture. With crops in stacked trays or planted on vertical walls, many more plants can fit in the same footprint. LED lights tuned to shades of pink or purple help plants grow faster and can be tweaked to change the nutrition or taste. Because the plants are in a controlled environment, no pesticides are needed, and with no limitations from the seasons or weather, crops can grow year-round. Instead of growing greens in drought-prone states like California and Arizona and then shipping them to the East Coast, it’s possible to use a hydroponic system with 95% less water and deliver produce the same day it’s picked. (The system also has some disadvantages, including the energy needed for lights instead of sunshine, though it’s possible for indoor farms to use renewable electricity.)

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