Will AgTech funding increase in 2024?

As AI and tech-enhanced crop growth create new opportunities in agricultural technology, venture capitalists are shifting their attention in this direction – with investments in AgTech expected to increase in 2024.

Governments, too, are directing investments towards the AgTech sector. In the UK, the Secretary of the Department for Environment, Food, and Rural Affairs just announced £45 million of funding for farming innovation. And in the EU, €13.5 billion has been allocated to research and innovation in 2023-2024 – not exclusively for agricultural technology, but certainly including it. 

In Saudi Arabia, the government has been the engine behind the AgTech ecosystem for years now – including an ambitious USD $1 billion investment plan to support long-term sustainability and greenhouse technology.

But renewed interest from venture capitalist firms promises faster growth opportunities; with the potential for rapid innovation and industry-transforming solutions. 

An AgTech rebound around the corner

Agriculture Dive recently reported that AgTech investments are expected to rebound, and this is backed up by deal value data from Pitchbook. In Q3 2023, deal values in the US AgTech market improved 19.1% over the same quarter in 2022. 

That improvement came after a tricky Q1, in which AgTech startups raised a total of $1.9 billion across 172 deals (down 10% and 39% respectively from the previous quarter). 

Investors are concentrating on larger deals in more established companies, rather than early-stage startups. These later-stage opportunities offer a more secure ROI, particularly if younger startups fail to secure ongoing funding from other sources, which could stunt their growth. 

Globally, the market is expected to grow to $22.5 billion by 2025 – up from $9 billion in 2020, according to Juniper Research.  

AI tech is a key focus for VC investments

Just like in other industries, VCs are particularly interested in AI-powered opportunities in agriculture right now. 

Shubhang Shankar (Managing Director and portfolio lead at Syngenta Group Ventures) told Agriculture Dive, “There is an entire space of integration between AI and machine-learning with machinery drive innovation, such as smarter tractors and using tech to better target how to control weeds, and this type of innovation can have an impact in the long run.”

And there’s a growing interest in the intersection between agricultural tech and other tech sectors, too. In 2022, Camila Petignat (Partner at Yield Lab) told TechCrunch that “increased awareness of carbon markets in recent years has triggered new opportunities at the intersection of agtech and fintech.” 

VC firms are looking outside of the box, and considering how different emerging technologies – or different use cases of emerging technologies like AI in various industrial sectors – might converge to drive exponential innovation in agriculture. 

Deloitte predicts that Internet of Things end points for precision crop farming, agricultural equipment tracking and livestock management will reach around 300 million by the end of 2024 – a 50% growth over 2022. And the overall revenue opportunity from AgTech will reach $18 billion, making it a potentially lucrative sector for investors. 

Agricultural tech is the future of sustainable farming, and the future of food security. Whether you’re a startup founder, a technologist, or an investor – join us at InFlavour 2024 to stay ahead of the curve.