Urban Farming Market 2025: Tech Innovations, Urbanization & Sustainability Driving Growth | Key Players: UrbanFarmers AG, Urban Crop Solutions, AeroFarms, Sky Greens, Koninklijke Philips N.V.

Market Overview & Growth Trajectory

The global urban farming market was valued at US $172.62 billion in 2024, up from US $160.43 billion in 2023, and is projected to reach US $311.24 billion by 2032, growing at a CAGR of 7.6 % during 2025-2032. Growth is propelled by ongoing urbanization, heightened demand for high-quality food, and the adoption of autonomous agriculture technologies.

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Drivers & Constraints
• Land scarcity in urban centers is prompting innovations like hydroponics and vertical farming to maximize yield per square foot.
• According to the FAO, up to 80% of households in certain Siberian and Asian settlements engage in some form of urban agriculture.
• Conversely, upfront capital and operating costs like climate control, LED lighting, and automation remain significant barriers.

Regional Outlook

• North America leads in market size, driven by developed infrastructure and R&D investments; Asia-Pacific is the fastest-growing region with rising investments in countries like India, China, and Japan.
• Additional regional insights: Asia-Pacific held approximately 41% of the global market in 2024 (about US $6.7 billion), expected to grow at a CAGR of 13.2% through 2033.
• Europe and North America remain strong but more mature in adoption.

Core Technologies & Sector Trends

• Hydroponics remains dominant due to ease of setup, reduced labor, water savings, and higher produce quality-accounting for notable market share increases (from US $47.75 billion in 2022 to US $48.47 billion in 2023).
• Smart technologies (e.g., IoT, AI) are being integrated to optimize outcomes and resource usage.

Key Industry Players & Recent Developments

Major competitors include UrbanFarmers AG, Urban Crop Solutions, AeroFarms, Sky Greens, Philips, Oishii, GrowUp Farms, Green Sense Farms, Gotham Greens, and Freight Farms.

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Notable recent developments:

• BrightFarms opened a new 6-acre greenhouse in North Carolina, aiming to produce 2 million pounds of lettuce annually.
• In 2024, Urban American Farmer in Austin, Texas, launched a communication platform connecting urban farmers with consumers.
• Sweetwater Farms HTX, also in 2024, focused on combining urban agriculture with education in Houston.

2025 Strategic Investments, M&A & Key Moves

Mergers & Acquisitions Surge
• Cox Farms significantly expanded its operations through acquisitions of BrightFarms and Mucci Farms, becoming the largest indoor farming operator in North America.
• The vertical farming sector is witnessing a wave of consolidation, as companies aim to achieve scale, refine profitability, and navigate easing capital constraints.

Overall agritech M&A volumes spiked dramatically:
• Q1 2024 saw a >600% increase in M&A deal value-from US $820 million in Q1 2023 to US $5.87 billion.
• Part of this was driven by ESG-focused investors seeking more sustainable farming solutions.
2025-specific Strategic Investments & Ventures
• A mid-2025 joint venture between Swiss Life Asset Managers and Planet Farms plans to build a 20,000 m2 vertical farm near Como, Italy, with further expansion into the UK and Scandinavia.
• Norsk Mat, a Norwegian firm, completed the acquisition of AeroFarms in summer 2025, bringing AeroFarms' indoor farming technology under Nordic control.

Smart Farming Collaborations
• Early 2024 saw Masdar City (UAE) partner with Madar Farms to launch a smart vertical farm aimed at enhancing food self-reliance in arid environments through IoT-enabled precision agriculture.

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