Skip to Content
chevron-left chevron-right chevron-up chevron-right chevron-left arrow-back star phone quote checkbox-checked search wrench info shield play connection mobile coin-dollar spoon-knife ticket pushpin location gift fire feed bubbles home heart calendar price-tag credit-card clock envelop facebook instagram twitter youtube pinterest yelp google reddit linkedin envelope bbb pinterest homeadvisor angies

Better Cities
Public Benefits
Making Money
Hardware Business Models
Selling to Consumers and Businesses
Selling to Local Governments
Working with Regulators
Your Extended Team
Corporate Partners
Building Trust
Urban Us Investment Memos
 Bowery Farming
– One Wheel (Future Motion)
– Remix
– Seamlessdocs
– Starcity

September 8, 2015

We’ve been trying to make sense of cities and food since we started Urban.Us. We’ve explored logistics components, but we’re convinced that all the elements of urban farming are aligned to compete with traditional farms.

We’re excited about another company we’ve come across. It has opted to remain in stealth mode because there has been a dramatic increase in visibility of various urban indoor farming projects over the last 12 months.

So, to understand the space, we’ll follow a slightly different introduction format. We’ll lay out our assumptions and ask you to tell us where we’re going wrong. And to help us understand the space in more detail, we’d love pointers to research or existing companies to analyze.

Potential impact

The sustained drought in California is a constant reminder of uncertainty related to weather. And yet, our current food supply is completely dependent on the weather. Sure we can rely on genetically modified corn to endure harsher environments, but what other strategies can we consider? The most notable opportunity appears to be… ignore the weather (or seasons, for that matter).

Initial results from indoor farming include more than 90% reduction in water use and growth times that are two and a half times faster than those of traditional outdoor farms. Then there is the ability to produce organically—that is, without the use of pesticides.

What about cost?

The biggest issue facing indoor farming has been cost inputs, including energy and labor. This matters less for high-priced crops like marijuana, but becomes more pronounced when you look at a crop like lettuce.

LEDs are transforming the energy equation for indoor farms. As their cost drops and efficiency improves, they’re a significant driver for the economics of indoor farming.

The other part of the equation is labor. While immigration and minimum wage debates probably help keep labor costs artificially low, larger-scale automation (think Tesla or a semiconductor plant) looks set to introduce a new level of efficiencies to drive down manufacturing costs.

Transport costs

It’s not so much the direct costs as the consequences that add up. First, there is the issue of emissions. It’s much easier to convert an indoor farm to renewables than it is to convert fleets of trucks and aeroplanes. Then there are the penalties paid by the food itself. It has to be selected not for taste or nutrition, but for resilience to transport.

Bigger than Uber vs the TLC

Uber has become a great example of a technology firm running into entrenched interests. We expect that, as it scales, urban farming will run into the full force of entrenched interest surrounding the farming business, from seed designers to equipment vendors. This is never a reason for us to avoid a company or a space, but it’s simply worth noting.

In Summary

We think that food production is going to look more and more like semiconductor manufacturing—increasingly automated environments that steadily help to drive down the costs of production and reducing weather risks. Siting these new farms near their point of consumption will help reduce waste and emissions, and provide new flexibility when food is not optimized for transport. While we expect a battle with traditional farming, as this model is proved out, it’s not a reason to shy away from the opportunity.

We’d love to understand your perspective so we can be smarter about finding the most promising opportunity for impact.



Join the Urban Us Network