[Disclosure: AgFunderNews’ parent company is AgFunder.]

Decline in Agrifoodtech VC Funding Continues in 2025

Agrifoodtech venture capital (VC) funding appears to be experiencing an unexpected bottom, characterized by ongoing declines. Data from the first half of 2025 indicates that investment in this sector continues to drop, with funding totaling $5.1 billion over 551 deals. This figure marks a significant 37% decrease from the $8.1 billion raised across 1,187 deals in the same period last year.

Notably, this decline represents the lowest funding total for the segment in the first half of the year since 2015 when startups garnered only $3.6 million across 518 deals—an indicator of the sector’s nascent stage at that time.

Continued Selectivity Among Investors

Rob LeClerc, founding partner at AgFunder, explains that the last eight years (2013–2021) saw a boom in foodtech and agtech investments, primarily driven by major funds seeking high valuations. However, the trend has shifted dramatically, with VCs now gravitating towards AI, which raised over $100 billion globally in 2024—nearly one-third of total VC funding that year.

LeClerc adds, “The capital expenditure (capex) nature of the agrifoodtech sector is falling out of favor, except in defense and robotics. Current geopolitical conflicts and unstable economic conditions further exacerbate the challenging funding landscape for agrifoodtech.”

Resilience and Focus Among Founders

Darren Leong, principal at Clay Capital, emphasizes the importance for founders to gain an understanding of regional dynamics. He notes, “Across Europe and Asia, categories that may face challenges in one market are finding traction in another. The turbulence of recent years has produced more resilient and disciplined founders, better equipped to navigate complexities and scale commercially.”

Investors anticipate a selective funding environment for the remainder of 2025, which has fostered a new breed of founders who are strategic and focused. Leong remarks that many are building leaner teams, emphasizing capital efficiency, and concentrating on a few core products that meet genuine market needs, thus ensuring a credible path to profitability.

Mark Kahn, managing partner at Indian VC firm Omnivore, observes the shift towards funding models that enhance efficiency and scalability. He notes a strong momentum in areas like agrifintech and sustainable materials, alongside growing confidence in agrifood life sciences.

Sector Trends and Observations

Antony Yousefian, a partner at TheFirstThirty, highlights a pivotal shift where life science and biology experts are taking the reins from generalist VCs in agrifoodtech. A growing emphasis on human health outcomes is attracting new stakeholders, suggesting a robust evolution in the sector.

“The wider restructuring of agrifoodtech is mostly complete, with generalists exiting and sectors like vertical farming and alternative proteins facing capitulation. Many declare that ‘VC doesn’t work in agrifoodtech,’ but these signals often indicate unique investment opportunities,” Yousefian adds.

Key Investment Areas in H1 2025

This year’s funding landscape has seen a few large deals drive the Midstream Technologies category to the forefront. UK-based Magnavale, operating a cold-storage network for the food industry, raised over $600 million in a single funding round. Meanwhile, packaging producer Diesco Industries secured $165 million.

In H1 2025, the top-funded category was notably less diverse than in previous years. While ag biotech was the lead category in H1 2024, it fell to fourth place this year, highlighted by fewer nine-figure rounds and a majority coming in under $30 million. Coinciding with this, funding for farm robotics and innovative food categories also saw noteworthy declines.

*H12025 numbers are preliminary and likely don’t account for all agrifoodtech funding activity in the first and second quarters.