Last December, the company was the first German foodtech start-up to be valued at more than one billion dollars.
(Photo: imago images/IP3press)
Berlin According to an insider, the Berlin foodtech start-up Infarm is separating from more than half of its workforce. The company announced at a staff meeting on Monday that it intends to lay off around 500 employees, one participant told the Handelsblatt. Currently, 950 people work for the company. For some, the visas are also tied to the job, the employee said.
In addition, the company wants to withdraw from Great Britain and the Benelux countries, among other things. Infarm only wanted to comment in the evening with reference to internal company discussions. Around 50 people had to leave the company in the summer.
It has been known for a long time that Infarm has problems. The rising cost of capital is making it difficult for supermarkets to pre-fund grow cabinets. Rising energy prices also increase their operating costs. The herbs and vegetables that Infarm grows are also premium products.
Infarm: Berlin start-up has never been profitable
Last December, Infarm was the first German foodtech start-up to be valued at more than one billion dollars, making it one of the so-called unicorns in Germany.
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Infarm grows lettuce, basil and mushrooms in vertical farms and sells them through trading partners such as Aldi, Kaufland and Metro. The business model aims to shorten delivery routes, lower prices and lower the carbon footprint of food production.
For a long time, Infarm focused on strong growth and expanded into many countries, including the USA. The Berliners have never been profitable. According to Infarm, in 2020 it had a turnover of 5.2 million euros and made a loss of 48 million euros.
Since then there have been no signs of a turnaround in profitability: According to Handelsblatt information, at the end of 2021 there was an operating result before interest, taxes, depreciation and amortization (Ebitda) of minus 67 million euros on the balance sheet.
>> Read also: Billion valuation, but mini business: start-up Infarm had to accept a decline in sales
Infarm was founded in 2013 by brothers Erez and Guy Galonska and co-founder Osnat Michaeli. The entrepreneurs originally come from Israel, but lived in Berlin at the time. In addition to the Berlin venture capital investors Cherry Ventures, Foodlabs and the Aenu Fund, which specializes in sustainability, the current shareholders include several international financiers such as Atomico and Balderton from London, Hanaco from New York and Tel Aviv and the Qatari sovereign wealth fund QIA.
Amidst rising interest rates, weak technology stock prices and the global economic crisis, the number of layoffs in the technology sector is increasing around the world. Most recently, the job cuts at Facebook owner Meta and the short message service Twitter made headlines.
More: Gorillas & Co.: Will the 36 billion German start-ups survive the crisis?