Editor’s Note: Sarah Nolet is managing partner at Tenacious Ventures, Australia’s first agtech venture firm, where she leads the firm’s vision and strategy. She is also the host of the Agtech, So What? Podcast and an industry thought leader.
Connie Bowen is general partner at Farmhand Ventures, an impact investment firm building and backing start-ups shaping the future of work in agriculture. She is also the author of Agriculture is for People.
The views expressed in this article are the author’s own and do not necessarily represent those of AgFunderNews.
Those of us financing technology solutions for the agricultural industry are working with pocket change.
In 2024, about $25 trillion was invested in alternative assets globally. About $11 trillion of that was in private equity, of which venture capital (VC) is a subset. And of all that capital, only $16 billion was invested in agrifoodtech in 2024, according to AgFunder research. Most of this went to foodtech. [Disclosure: AgFunderNews parent company is AgFunder.]
Meanwhile, agriculture is a $3 trillion global industry facing existential pressure. Climate volatility is reshaping growing seasons. Labor shortages threaten harvest viability. Diet-related diseases are driving healthcare costs through the roof while our agricultural system optimizes for yield over nutrition. These aren’t distant risks; they’re current crises affecting the infrastructure that feeds, clothes, and fuels the world.
There’s real alpha to be found in investing in agtech solutions. But right now, LPs are walking away from agtech.
Not because the opportunities aren’t there. Not because the problems aren’t urgent. But because the asset class looks immature.
We’re at an inflection point for the sector. Exits, and therefore real returns, haven’t materialized yet. Capital is drying up. And instead of doing the hard work of professionalizing agtech as an investable category, there’s a very real risk that scarcity mindset drives fund managers into exactly the wrong behavior: competing on narrative instead of collaborating on credibility.
What does asset class immaturity actually look like?
It looks like fund managers are competing on metrics that don’t matter in agriculture.
Deal count is meaningless when companies aren’t selling products that solve farmers’ problems or are valued at more than anyone will ever pay for them. Advisory boards stacked with celebrities don’t help startup leaders understand why a piece of equipment needs to work in both -20°F Iowa winters and 45°C Australian summers. Media presence doesn’t correlate with farmer adoption. In other sectors, these might be reasonable proxies for momentum. In agtech, they’re noise. And when vanity metrics drown out substantive differentiation, everyone loses.
It looks like fighting over slivers of a barely-filled, underbaked pie. We compete on “why our fund” before we’ve made a compelling case for “why agtech.”
The first question is pre-competitive—LPs need to believe agrifoodtech is an investable category before they can evaluate individual manager strategies. But instead of building that shared foundation, we’re differentiating against each other in a market that doesn’t yet believe in any of us.
And it looks like an ecosystem stuck in competitive positioning instead of collaborative learning.
There’s a robust debate about agtech’s future—whether we’ll see unicorns, whether power law dynamics apply, and what portfolio strategies work. This debate is valuable when it builds shared understanding of what works, why, and how we build it. The problem is when it becomes zero-sum positioning: “I’m right, they’re wrong, invest with me.”
Agrifood needs multiple capital structures: different approaches for software versus hardware versus biotech; for pre-revenue climate tech versus cash-flowing equipment. The next phase of maturity is moving from which single model wins to how complementary strategies work together to fund the full value chain.
What does maturity look like instead?
Selling agtech’s investability in a more united front. When LPs understand agtech’s specific dynamics they can evaluate managers on what matters. We’re already building this infrastructure: investor education programs, open-sourced founder resources, shared databases of active managers by geography and thesis, and collaborative thought leadership (like this article!).
This benefits everyone because it helps us get to a place where LPs aren’t dismissing agtech as an uninvestable category, but instead are partnering thoughtfully with the diverse set of fund managers working to both deliver returns and solve the problems facing the agricultural industry and all the people in it.
Framing different investment tactics as tools in the toolbox. Given the complexity of natural systems and the opportunities ahead in agrifood, we must accept that there’s no miracle universal tool that will unlock returns and impact. This means actively showcasing different approaches: hosting each other on podcasts to explain novel structures; publishing peer interviews; making strategic introductions between LPs and complementary funds. We realize that choosing one strategy doesn’t preclude another. And we can all make better-informed decisions about how to spend our time—whether with LPs, prospective or actual portfolio companies, or farmers—by openly sharing resources. It makes the hard stuff easier and the fun stuff more fun.
Adopting an abundance mindset in agtech investing—especially now
When we compete instead of collaborating, we’re squabbling over pennies under the couch cushions in a world where the cost of finding them exceeds their value. We’re defending tiny slices of pie when agriculture is a $3 trillion industry with existential problems that demand solutions.
Those of us in the trenches of agtech fundraising know that the capital will come and the returns are available. They’ll come faster if we stop treating each other as threats and start building the infrastructure this asset class needs to mature. A shared understanding of what works in agrifood and enables LPs to evaluate fund managers on substance.
It makes it easier for managers to identify and partner with peers with complementary approaches, rather than as competitors.
We’re already starting, and we invite all of our peers to get on board. We can’t afford to wait for us to figure this out, fund by fund, pitch by pitch, in isolation from each other.
The question isn’t whether more collaboration makes sense. It’s whether we have the conviction to do it.
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