Infarm’s Collapse Still Shapes Vertical Farming in 2026

Energy risk and tighter capital discipline redefine sector three years after European retrenchment

16 Feb 2026

Infarm’s withdrawal from Europe in 2022 and 2023 remains a defining episode for the vertical farming industry, reshaping how investors and operators assess risk in 2026.

The Berlin-based company exited markets including the UK, France, Germany, the Netherlands and Denmark after surging electricity prices drove up operating costs. What began as cost cutting became a broader retrenchment, with insolvency proceedings and asset sales across several jurisdictions. In September 2023, its Dutch subsidiary was declared bankrupt, while other entities entered restructuring or administration.

At the time, analysts pointed to energy as the sector’s main vulnerability. Controlled-environment agriculture relies on electricity for LED lighting and climate control systems. When European power prices spiked in 2022, margins narrowed sharply. The shift coincided with a global slowdown in venture funding, as investors moved away from rapid expansion strategies towards a focus on sustainable unit economics, a measure of profitability per unit sold.

Three years on, the consequences are still visible. Investors now examine energy sourcing agreements, grid exposure and the duration of power contracts before committing capital. New projects are often located in regions with stable electricity pricing or integrated renewable capacity. Capital efficiency has become a requirement rather than an ambition.

Industry observers frequently cite Infarm’s retrenchment as an example of overexpansion during a period of cheap capital. The company’s rapid rollout of in-store farms across European supermarket chains showed technical viability but left the business exposed when energy costs rose and financing conditions tightened. Contracts with major retail partners ended as operations closed, highlighting the speed at which scale can reverse when underlying assumptions change.

The broader case for indoor agriculture has not faded. Climate volatility, water scarcity and supply chain disruptions continue to affect conventional farming. Since 2023, improvements in LED efficiency, automation and data systems have reduced input costs. New entrants are building smaller facilities designed to achieve profitability from the outset.

Infarm’s European exit is no longer immediate news. It has become a reference point for a sector now shaped as much by energy risk and financial discipline as by technological ambition.