Hydroponics, Aquaponics and the World of Venture Capital

Photo courtesy of Marianne Cufone

When you think of agriculture, what likely comes to mind is cows and rows of crops. When you think of venture capital, you might think of the latest app or wearable tech. Now, agriculture and venture capital have joined forces to upend those assumptions and take the centuries-old concepts of hydroponics and aquaponics to new heights, turning them into what some are calling the future of urban agriculture.

The investments are spurred on by growing interest in both local and organic food which saw record sales in 2015. Consumers want more sustainably produced food and entrepreneurs are responding. New farm-to-table companies are springing up around the country and business owners are hot on the trail of investments to expand both their operations and their markets.

Hydroponics and Aquaponics - The Benefits 

Hydroponic and aquaponic growing systems have many inherent benefits when it comes to sustainability. Because they use water in place of soil to grow food - hydroponics produces vegetables, herbs, some fruit and flowers, while aquaponics produces all of that plus fish both edible and ornamental - the systems can take advantage of enclosed or odd-shaped urban and semi-urban spaces that might lack access to sunlight or even arable land. The systems are incredibly water efficient, using roughly 15 percent of the water required by land-based systems. And depending on where and how they are established, they can be energy efficient. Because they're water-based and typically enclosed, pesticides and herbicides are not required and fertilizers are delivered directly to the roots, so the chance of contaminating local water systems is minimal. And the systems are efficient, producing significantly higher volumes of food than their conventional counterparts on a per acre basis.

Hydroponic and Aquaponic Investments

These features lend themselves to the creation of business ventures that provide local sources of food within or near population centers. Investors are paying attention.

BrightFarms

New York City-based BrightFarms claims as its inspiration a "...desire to grow food in the same communities where it's consumed," and say they "...grow local produce, nationwide." BrightFarms recently raised over $30 million in investments to expand its greenhouse operations across the country. The amount brings total BrightFarms investments to $55 million.

And they're not the only ones winning the golden ticket.

AeroFarms

Newark, New Jersey-based AeroFarms uses its patented technology to produce leafy green vegetables in a completely controlled aeroponic system (similar to hydroponics but using mist instead of a recirculating water system). They recently received $28 million in investments to meet the increasing demand for their locally grown produce. 

Gotham Greens

Gotham Greens, located in Brooklyn, New York, recently received $14 million in investments to expand their hydroponic operation.

Edenworks

Edenworks received $1.3 million to start their aquaponics operation, also in Brooklyn.

The list goes on.

Company owners say the demand is there and with growth comes jobs for local workers. Given the controlled environments, many of those jobs are year-round and production and employment is not impacted by severe weather events like droughts.

Hydroponics and Aquaponics - the Drawbacks

As much of a golden ticket as they may be, hydroponic and similar systems are not without their critics, and the systems have their downsides. Some operations use partially automated systems, which can offset jobs for people. Because they are climate- and light-controlled, the systems can have high energy demands for artificial lighting and heating and cooling of aquaponic systems (e.g., tropical fish established in a colder climate). And whether or not the systems will achieve organic status - which means they can fetch higher prices from retailers - is a controversial decision the National Organic Standards Board is not making lightly (stay tuned for the next NOSB board meeting in April 2017).

Perhaps the most unfortunate drawback to the systems has to do with their impact on other older, less attention-grabbing forms of urban agriculture, like community gardening. Authors Kristin Reynolds and Nevin Cohen point out in their new book about urban agriculture and social justice activism in New York City, Beyond the Kale: "Urban agriculture has been portrayed as a newly emerging activity practiced by young upper-middle-class hipsters," when, in reality, urban agriculture "...has always been practiced by low-income and working-class residents."

In interviews with numerous urban farmers, Reynolds and Cohen found "imbalances in funding, access to resources and connections to key decision makers that gave particular advantage to white middle-class farmers and gardeners." In addition, more "technology-based" agriculture like hydroponics tend to garner more financial support from grant makers normally serving "disadvantage groups that do not have access to large grants for capital investments" which is often the case with farms in lower-income neighborhoods.

Criticisms aside, hydroponic and aquaponic farms offer consumers another opportunity to use their purchasing power to encourage sustainable production and strengthen local food systems. While they may not be a silver bullet solution to the problems that exist with our industrial food systems, capital investments help ensure that they become a stable part of the solution that moves the country toward food production that is not only nourishing for people but also for the planet.

Responses to "Hydroponics, Aquaponics and the World of Venture Capital"
The views and opinions expressed by contributors do not necessarily reflect those of the Ecocentric Blog or GRACE Communications Foundation.

  1. Stefhan Gordon

    In many of the hydroponic systems, they are NOT simply circulating water. They're circulating nutrient solutions which are anything but organic. These nutrient solutions contain things like ammonium nitrate and ammonium phosphate which are derived from industrial processes in the same way that other synthetic fertilizers are manufactured. So in many ways, a lot of the these hydroponic systems are just another form of chemically dependent conventional Ag. The difference is that these conventional chemical Ag systems occur in controlled environments. Controlled environments reduce pests and weeds, but often require a lot of energy for heat and lighting.

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