The 2023 World Agri-Tech Innovation Summit in San Francisco reflected ongoing challenges in the agtech sector. Amid a funding downturn and a tight exit environment, stakeholders are recalibrating their expectations on funding and valuations to ensure survival and foster the future of farming.

AgTechNavigator Editors Ryan Daily and Oliver Morrison shared their insights from this year’s summit in a video recap, highlighting key trends and takeaways that are shaping the industry. Here are four crucial insights:

1. Focus on Business Fundamentals

The agtech landscape has seen a funding decline, with Venture Capital funding dropping to $6.6 billion across 805 deals, a 2.6% decrease in value from the previous year, according to PitchBook data. To navigate the capital crunch, startups are prioritizing capital efficiency and early revenue generation.

For instance, Israel-based mechanical weeding startup AgriPass anticipates generating $1 million in revenue this year following a $7.5 million raise. Similarly, Innov8.ag projects equal revenue for its digital farming software aimed at specialty crop growers. Both companies were present at the summit.

“The environment is indeed challenging, and 2026 might not be any easier, but we see a faint glimmer of hope,” Daily noted, adding that more founders are reaching their seed stages while generating revenue.

2. OEMs Seek Innovation Through Startups

Original Equipment Manufacturers (OEMs) and agricultural leaders are looking to leverage the current lower agtech valuations to enhance their research and development (R&D) endeavors. Major players like John Deere, Kubota, CNH, and AGCO shared their visions for the industry’s future during various panels at the summit.

“While investment is down and startups are under pressure to prove profitability and demand, the real question is whether this will drive incumbents to invest more in R&D and embrace higher-risk innovations,” Morrison elaborated.

Both John Deere and Kubota have already taken steps in this direction, with John Deere acquiring GUSS Automation last autumn and Kubota investing in precision weeding startup Kilter the previous month.

3. Geopolitical Risks Impacting the Sector

Geopolitical issues are not only disrupting farming operations but also influencing the way startups and OEMs adapt to the changing landscape. Last year, John Deere faced challenges in its tractor division due to tariffs on steel and market volatility stemming from the Trump administration’s policies.

“Although John Deere reported better-than-expected Q1 results this year, indications of recovery in the OEM ag machinery market shifted abruptly with the onset of the Iran conflict,” Daily said.

As a response to these macroeconomic trends, John Deere is actively developing recurring revenue models as a strategic hedge.

4. The Emergence of Quantum Computing

While AI, gene editing, and automation dominated conversations at the summit, cutting-edge technologies like quantum computing are making their way into the R&D discussions. For example, Syngenta announced a partnership with QuantumBasel aimed at leveraging quantum computing for the development of new crop hybrids.

Feroz Sheikh, chief information and digital officer at Syngenta, noted, “We might soon reach the limits of what current computational technologies can achieve. Although quantum computing is still maturing and not yet ready for production-scale applications, we want to ensure we understand its potential and how it can enhance our research capabilities.”