A superb overview from/via AgFunderNews, April 30:
Firms in animal health, crop inputs & enhancements, and precision ag software, are "generating the strongest risk-adjusted outcomes," says Pitchbook
As EcoTech Capital MD Adam Bergman recently noted, a lack of exits has created a “vicious cycle” in agtech: limited investable capital as existing funds hit the end of their life and struggle to raise new capital, and few new funds emerging as LPs shy away from a sector with weak returns.
Against this backdrop, Pitchbook’s latest report asks the question: What does a successful VC-backed agtech investment actually look like?
According to authors Alex Frederick and Caleb Wilkins, who analyzed 1,197 VC-backed agtech outcomes as of Dec 31, 2025, VC-backed exits remain “concentrated in specific sectors, with crop inputs & enhancements, precision ag software, and select animal ag health companies generating the strongest risk-adjusted outcomes.”
Notably, the biochem and inputs space is a sound bet, they claim: “Regulatory pressure on synthetic pesticides is accelerating the shift to biological crop inputs, with the market forecast to roughly double by 2030.
“Bayer, BASF, Syngenta, Novozymes, and Corteva are repeat acquirers who have publicly named biologicals as a strategic priority, giving investors in this segment a pool of well-capitalized, strategically motivated buyers that no other agtech segment can match.”
According to Pitchbook:
Capital is consolidating around the strongest players: “Median pre-money valuations are at record highs even as disclosed deal counts have dropped 70% from their 2021 peak, reflecting capital concentrating in the most credible teams and business models. Median valuations and deal sizes are rising not because the market is broadly improving, but because weaker companies are no longer being funded at all.”
Meanwhile, young startups, including AI-native agtech firms, “have received an influx of seed-stage capital from multistage funds, elevating deal sizes and valuations.” What we don’t know, says Pitchbook, “is whether investors can systematically identify” the best bets within this growing pool.
Where the smart money is: “Seed or Series A entry below $20 million pre-money, technology-supplier models rather than capital-intensive operators, total capital raised under $30 million, and exposure to segments with robust strategic and private equity acquirer pools.”
For LPs: Pitchbook recommends backing specialists with “concentrated portfolios, 10-plus-year or evergreen structures, biochem or precision ag expertise, and proven relationships” with strategic acquirers such as Bayer, Novozymes, John Deere, and Zoetis.
For GPs: With half of companies expected to fail (of 1,197 VC-backed agtech companies with known outcomes, 683 are confirmed failures and 372 exited without a disclosed valuation), “funds must secure enough ownership in the one to two outlier exits at $500m+ that will define performance and avoid late-stage entries at software-style multiples into businesses that are likely to exit at 6x revenue.”
Among the 2,533 VC-backed companies founded between 2015 and 2020, 152 have a confirmed exit and 345 are confirmed failures (as of year-end 2025). Of the 29 exits with disclosed values, nine exceeded $100 million, and one exceeded $1 billion.
$8.2 billion destroyed: VC-backed confirmed failures destroyed a known $8.2 billion in capital....
....MUCH MORE
