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Investors Call for a Rethink in Agrifoodtech Investment Strategies

A panel of investors at the World Agri-Tech Summit in London this week reached a consensus: the current agrifoodtech investment model requires a substantial overhaul. As moderator Adam Anders articulated, it’s time for “a rethink.”

Declining VC Funding Trends

The urgency for a rejuvenated approach stems from a dramatic decline in venture capital investment in agrifoodtech startups. Recent figures indicate a staggering 37% drop year-over-year in funding, totaling only $5.1 billion in the first half of 2025, especially when contrasted with the high of $52 billion spent in 2021.

Despite the sobering statistics, panelists acknowledged that the sector has yet to reach its lowest point.

Redefining Expectations for Investors and Entrepreneurs

Instead of fixating on the downturn, Anders, managing partner at Anterra Capital, sparked a discussion on what this “rethink” should entail. Rogier Pieterse, managing partner at PYMWYMIC, argued that both Limited Partners (LPs) and entrepreneurs need to reset their expectations. He pointed out that agritech cannot promise the same rapid returns typically associated with Software as a Service (SaaS) ventures.

“That’s not the industry we are in,” asserted Pieterse.

In alignment with this sentiment, Ali Morrow, partner at Clay Capital, emphasized the need to move away from using a software VC playbook in food and agriculture investments, noting the unique challenges of this sector.

“Over the last decade, we’ve witnessed a maturation in our investment categories, which differ significantly from earlier disruptive technology expectations,” she elaborated.

Investor Insights on Returns and Growth

Michael Dean, partner at AgFunder, conveyed a stark reality: “Convincing investors that we can deliver 3x returns within a decade is increasingly challenging.” He added that many acquired companies are experiencing slower growth than anticipated.

Carlos Sanz, partner and sector head at Bridgepoint, acknowledged the enthusiasm of LPs for agro-sciences, indicating a silver lining amidst the funding challenges.

The Future: Key Components for Success

Anders turned to the panel for insights on what could drive future success in agrifoodtech. Morrow emphasized that solutions must effectively connect with customers while ensuring ease of adoption.

“For any prospective customers, a solution needs to be simple and deliver a return on investment,” she said. “While this may seem obvious in commercial relationships, it hasn’t always been evident in agriculture.”

Dean added that resilience and accurate unit economics are essential components for success. Sanz highlighted the importance of addressing the needs of growers in the supply chain, advising that cutting through the noise is crucial for reaching customers.

Sector Trends: Hot or Not?

In a rapid-fire segment, panelists were asked to classify various agrifoodtech sectors as “hot” or “not.” Plant genetics received a “hot-ish” label, though deemed too broad for definitive analysis.

Regenerative agriculture was considered overwhelmingly “hot,” with panelists humorously noting, “you might as well put your checkbooks away.”

In contrast, carbon farming, precision fermentation, and agrifintech were firmly categorized as “not.” On a brighter note, robotics, AI, and particularly large language models (LLMs) were greeted with enthusiasm as “hot” sectors.