Infarm
The Berlin company that put farms inside supermarkets never turned a profit, despite USD 500 million
- Founded
- 2013
- Closed
- 2023
- Lifespan
- 10 years
- Total funding
- $500 million
- Peak valuation
- $1 billion
- Became a unicorn
- 2021
- Country
- Germany
- City
- Berlin
- Sector
- Food and drink
- Founders
- Osnat Michaeli, Erez Galonska, Guy Galonska
- Investors
- Qatar Investment Authority, Atomico, Balderton Capital
- At its peak
- USD 1 billion valuation in 2021, with over 1,400 farming units in 10 countries
- Cause of closure
- Business model failed
What did it do?
Infarm grew herbs and leafy greens without soil in enclosed units placed inside supermarkets. Osnat Michaeli and brothers Erez and Guy Galonska founded it in Berlin in 2013. It supplied chains such as Aldi and Marks and Spencer. At its peak it had more than 1,400 units in 10 countries and about 1,000 staff.
Why did it shut down?
The company reached a USD 1 billion valuation in 2021 in a round involving Qatar Investment Authority, but struggled to turn a profit. In late 2022 it laid off about 500 people, closed facilities and moved its focus to return on investment. In 2023 insolvencies followed in Germany, the UK and the Netherlands, and it left Denmark and France. The large vertical farm in Bedford closed for good and its produce left the shelves of Aldi and Marks and Spencer. The assets passed to a new company, Infarm Technologies Limited, for just over EUR 40 million.
The story
The story began in Berlin. Osnat Michaeli and Erez and Guy Galonska settled in the city in 2012 and began experimenting with growing herbs indoors in nutrient-rich water instead of soil. Founded in 2013, Infarm had a bright idea: move the crop into the shop, so customers could buy basil they had watched growing.
Investors loved that picture. The company raised nearly USD 500 million and reached a USD 1 billion valuation in 2021. It won space at Aldi and Marks and Spencer, installed more than 1,400 units in 10 countries and opened a large vertical farm in Bedford, England.
Then the question of cost came to the fore. About 500 people were laid off in late 2022. In 2023 units in Germany, the UK and the Netherlands became insolvent, and the produce left the shelves.
The assets passed to the newly formed Infarm Technologies Limited, which now works on a much smaller scale, focused on kosher leafy greens. The promise of the in-store farm was over.
Lessons for founders
- Being visible in a supermarket is not the same as being profitable. Before spreading to 1,400 units, show where one unit makes and loses its money.
- If you make a cheap, low-margin product with expensive technology, investment money only hides the cost gap. Work out the full cost of a bunch of basil from day one.
- Opening in ten countries multiplies your fixed costs. Move into a new market only once the set-up model has paid for itself in one.
Sources
- Infarm raised $500m, and then it all disappeared (HortiBiz (Sifted), 2023-12-19)
- Infarm latest news (iGrow News)
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