Want to invest in CEA industry? Do your due diligence first
Added on 17 October 2022
To help bridge this uncertainty and limit the risks, investors would be wise to lean on industry experts who conduct due diligence studies.
Indoor farming often requires a significant amount of capital expenditure to scale, and choosing which operations to invest in can be extremely challenging. That’s where due diligence comes into the picture. Credit: AgFunder News.
With the CEA industry surpassing $2.0 billion in investments across North America and Europe, Henry Gordon-Smith, the Founder & CEO of Agritecture, worries that most investors base their decisions on a risky ‘gold rush’ mentality, filled with hype and a fear of missing out. He has witnessed many investors fund startups in this sector without a robust thesis for CEA and without technical due diligence.
And with some predicting that the CEA sector will grow 5x over the next 10 years, stakeholders’ potential risk and return will continue to grow, making due diligence studies that much more important.
Header Photo: Indoor farms often come with unforeseen risks and costs, so due diligence is important to investors who are looking to invest in lower-risk businesses. Credit: Science Photo Library.