Update as of 23 August 2021. A press release was published on Friday announcing that the special meeting between Spring Valley Acquisition Corp and AeroFarms has been postponed until the 30 August 2021 at 10:00 Eastern Time. The postponement is intended to permit more time to satisfy the closing conditions.
Today a special meeting will be held between Spring Valley Acquisition Corp. (SPAC vehicle) and AeroFarms finalising an agreement back in March to merge the companies and bring the first vertical farming company to public markets. This is a key milestone for the industry and follow listings of AppHarvest and Village Farms International that are indoor farming companies. The term controlled environment agriculture (CEA) is also used by the industry.
What is vertical farming?
Indoor farming, also called greenhouses, works by growing plants indoor but using sunlight and stacking everything in one horizontal plane. Vertical farms use LED lighting as synthetic light can thus layer plants vertically and thus take up less space and gives opportunity to have vertical farms closer to urban areas reducing transportation time. Vertical farming also has the benefit of recycling water, clean rooms reducing pesticides and herbicides to an absolute minimum, and increase the yield due to optimizing light exposure.
Recent years of more extreme weather due to climate change have also shown that food disruptions will likely increase across many types of food from coffee, wheat, wine, and cocoa. Vertical farming has the potential to reduce the negative effects on food from climate change and also shorten the distance between food production and the urban population and thereby reducing carbon emissions related to transportation.
Can AeroFarms avoid AppHarvest’s stumble?
There was a lot of excitement in the industry when AppHarvest listed through a SPAC merger, but the lofty expectations have since come down as the company has reduced its outlook for production facilities and run into labor and productivity issues in scaling up production. The shares are down 83% from the peak in February. As a result of these developments there will be a lot of pressure on AeroFarms to deliver good results and with the company founded in 2004 many will ask whether this is in fact a technology that can be profitable.