Final November’s Thrive International Influence Summit introduced collectively a number of hundred entrepreneurs, traders, and senior executives in Silicon Valley for a day of debate round urgent points within the agrifoodtech house.
Whereas a plethora of well timed matters had been up for dialogue, this text will zoom in on one of many key themes that stood out for me from throughout all the day’s panels: the evolving funding panorama round agtech options, and the way corporates and different strategic traders are central to scaling them.
Bear Market?
As reported in Cleantech Group’s not too long ago revealed 2025 International Cleantech 100 report, local weather start-ups in Agriculture & Meals raised a complete of $3.7B in enterprise funding in 2024, down from the earlier 12 months’s $4.6B and a considerable discount from $8.7B in 2022.
Agriculture and Meals Enterprise Funding 2019 – 2024
Nonetheless, deal numbers had been down solely barely from 2023, hinting that choose traders nonetheless see alternative in backing applied sciences that may future-proof meals manufacturing.
Whereas enterprise capital funds undoubtedly have a task to play in rising promising agtech and foodtech companies, they aren’t at all times set as much as align with the slower adoption timeframes and seasonal nature of agriculture. Many innovators on this space are actually dealing with a scaling-up hole, and extra affected person capital will probably be required to take them to the subsequent stage.
Panelist Will Kaplan, director at agri-food-focused non-public fairness agency Paine Schwartz Companions, informed attendees that his group “sees an increasing number of curiosity on this sector” from quite a lot of traders, although “aggressiveness across the tempo of adoption curve has created some out-of-whack dynamics.”
EcoTech Capital’s Adam Bergman agreed that there was unrealistic expectation-setting. “Based mostly on my expertise in broader cleantech, historical past tells you a lot of the new entrants aren’t going to [become] giant public firms,” he stated.
At Cleantech Group, we consider that the extra doubtless path to exit for agrifoodtech start-ups will probably be by way of deep partnerships and eventual consolidation with incumbent corporates, who have already got brand-name recognition amongst farmers and established market distribution networks constructed over many a long time.
Different forms of traders, with longer-term views and extra targeted theses, may also have an more and more vital position to play in scaling up agrifoodtech innovation.
“They not solely perceive the markets, but in addition the adoption timelines. That’s one of many challenges; lots of the [generalist VC] traders don’t know that,” Bergman stated. “So, the capital goes to return from firms, from philanthropists, from pensions and sovereigns.”
The Strategic(s) Benefit
The concept of getting corporates concerned as traders from early on will go in opposition to the start-up instincts of many tech entrepreneurs and VCs, who typically default to viewing themselves as disruptors in competitors with incumbents, relatively than their companions.
However a strategic investor is probably going the perfect likelihood for agtech innovators get their options into the palms of their goal finish customers. Panelist Jason Trusley, chief technique officer at Land O’ Lakes, identified that his co-op works with about 300,000 farmers throughout the U.S.; a quantity far past the attain of a typical start-up, even with substantial time, effort, and spending.
“Typically you don’t need a strategic in your cap desk — however you possibly can’t afford to not,” added Hadar Sutovksy, vp of company investments at fertilizer and chemical compounds firm ICL. “Corporates really create a win-win for start-ups, by way of entry to data, to services, and go-to-market… We perceive the business as a result of we’re a part of the business,” she stated.
PJ Amini, senior director of enterprise investments at Bayer’s company VC unit, Leaps By Bayer, went a step additional, telling the viewers that “the one factor higher than having a strategic in your cap desk is having a couple of.”
Not solely does this improve the truth verify that traders present for entrepreneurs, by providing further views; it additionally has a multiplier impact resulting in additional alternatives for partnering and innovating.
A current instance is the three-way collaboration between start-up Innerplant, crop inputs incumbent Syngenta, and ag gear maker John Deere, which can also be an Innerplant shareholder. This partnership has seen Innerplant’s soybeans, which have been gene-edited to sign when they’re at biotic danger, handled with optimized crop safety merchandise from Syngenta utilized by John Deere’s smart-spraying expertise.
Opening Minds & Scaling Up
Incumbents however face their very own limitations in relation to investing in, or partnering with, agri-food entrepreneurs – in addition to one another.
Once more, one such barrier is offered by the ‘Silicon Valley mindset’: an extreme concentrate on speedy development and the nitty-gritty of expertise, on the expense of setting upon a enterprise mannequin and go-to-market technique that may really work in agriculture.
Panellist Scott Komar, senior vp of world R&D at berry producer Driscoll’s, urged early-stage innovators to assume forward and attempt to anticipate their potential clients’ wants. “How are they going to scale doing simply what they’re doing already? So that you’ve made three of those… how are you going to make 300?,” he requested.
“The opposite factor is scaling throughout. You made this actually neat answer for managing powdered mildew on strawberries. What’s your plan for the way this’ll work with desk grapes, with tomatoes? We’re a world firm. If we discover one thing we like, we’d like that to work in all places,” he stated.
Past the excessive interest-rate setting and drive to chop spending throughout the board, structural points round inside communication and firm tradition may decelerate company funding into agri-food innovation.
“Internally, in the event you don’t have alignment, if there’s not good inside collaboration, then you definitely gained’t have good exterior collaboration,” stated Todd Stucke of tractor producer Kubota. ‘Not-invented-here syndrome’ – a terror to interact with exterior innovation from start-ups, analysis establishments, or different corporates – was additionally pinpointed as a prevalent downside by Bayer Crop Science’s Dan Ruzicka.
An 80-year-old agency providing irrigation and windmill gear, Valmont Industries was concerned in one in every of agtech’s largest exits thus far with its $300M buyout of crop monitoring start-up Prospera Applied sciences in Could 2021. Vp Trevor Mecham was on stage to supply insights for fellow corporates trying to make investments or purchase within the house.
“It’s an fascinating place to be in, significantly as an infrastructure firm; you construct one thing that’s going to be there for the subsequent 25 to 30 years. How do you adapt an previous firm from a machine store to evolve right into a tech supplier? Whereas there’s consolidation [in agri-food tech], it’s additionally upon us as incumbents to collaborate and convey that collectively,” he stated.