[Disclosure: AgFunderNews parent company is AgFunder.]
A panel of investors at the World Agri-Tech summit in London this week unanimously agreed that the agrifoodtech investment model needs, as moderator Adam Anders put it, “a rethink.”
Panelists had good reason to advocate for a refresh, as VC dollars to agrifoodtech startups have dwindled over the last several years. At last check, funding dropped 37% year over year to $5.1 billion in H1 2025, and these numbers are paltry compared to the $52 billion spent in 2021.
Panelists also agreed that we’ve yet to hit the bottom of this decline.
But rather than dwell on the negatives, Anders, managing partner at Anterra Capital, grilled panelists on what exactly a “rethink” looks like.
“We need to reset our expectations towards LPs,” said PYMWYMIC managing partner Rogier Pieterse. Entrepreneurs, he added, need to reset their expectations with investors. In other words, agritech can’t make the same promises around 10x returns in five or six years’ time so often seen with SaaS models.
“That’s not the industry we are in,” said Pieterse.
Echoing that, Clay Capital partner Ali Morrow suggested this “rethink” relates a lot to past efforts to “take a software VC playbook and apply it to food and ag companies.”
“By and large, over the last 10 years, our categories have matured in terms of what investing in food and ag companies—which are different—looks like. What can exit on what timeframe is perhaps different than the disruptive technology that was hoped for perhaps 10 years ago,” she added.
Michael Dean, partner at VC firm AgFunder, put it even more bluntly: “Going to investors and saying we can deliver 3x returns on their money within 10 years is just proving to be super, super tough.”
“A lot of the companies that we have acquired via portfolio or directly have just grown a lot slower over time,” added Carlos Sanz, partner, sector head, advanced materials, at PE firm Bridgepoint.
However, he also noted that LPs are “super excited” to go into agro-sciences.
The North Star of agrifoodtech investment
Anders also polled panelists on what they believe will make a difference moving forward.
“Something that plugs into your customer, something that’s adoptable,” said Morrow.
“In order for any prospective customers to buy, it needs to be simple, and it needs to deliver ROI. These are obvious statements by and large for any commercial relationship, but within ag, that hasn’t necessarily been there.”
‘Resilience is a key component, and getting the unit economics right,” added Dean.
“There’s a lot of innovation, a lot of point solutions, but it’s hard to see how those become a business model,” said Sanz. “Sometimes you have a great innovation, great solution, but you’re not necessarily pleasing the people you need to please in the value chain to get to what you need.”
“We all know growers,” he added. “Ultimately, they take advice from very few people in the supply chain, so you have to cut through that to reach the grower. The service layer is always fundamental. You can have a great product but it has to come with a great service for the customer.”
Hot or not?
Anders’ panels tend to include a number of rapid-fire questions requiring one-word answers. To that end, he asked panelists to vote “hot” or “not” regarding certain sectors of agrifoodtech.
Plant genetics was deemed “hot-ish” but in general way too broad a label to assess the entire vast category.
Regenerative agriculture was unanimously declared so hot “you might as well put your checkbooks away,” noted Anders.
Carbon farming was firmly in the “not” category, along with precision fermentation and agrifintech.
Finally, robotics was declared hot along with AI and, especially, LLMs.
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