The Agri-Tech Sector and Venture Capital
According to recent data from Crunchbase, nearly 800 Agri-Tech start-ups raised more than US$10 billion in 2022 globally, a 13% decline from the previous year[1]. Comparatively, start-ups in all sectors have seen a 35% decrease in raised capital for 2022. The Agri-Tech sector has proven to be much more resilient in the face of turbulent economic conditions, considering a 26% increase in the total number of rounds closed compared to 2021.
The Controlled Environment Agriculture (CEA) subsector had the largest growth in invested capital in 2022, with an additional funding of US$700 million. The other significant increase in invested capital includes the climate monitoring and international carbon trading subsectors, which increased by over US$490 million last year. The two subsectors that experienced large decreases include alternative protein production and supply chain management, which declined by more than US$1 billion and US$683 million respectively.
There was a total of 33 exits in 2022, almost all by M&A, except for one through a public listing. This represents a 25% decrease in the total number of exits, with IPOs being the most affected with a 90% decrease. In addition, company valuations also declined. The five-year moving average of M&A exit valuations sank from US$138 million between 2017 and 2021 to US$111 million between 2018 and 2022.
In conclusion, the Agri-Tech sector has proven to be quite resilient amid the current global economic downturn. Growth expectations remain high for the coming years with 14% CAGR until 2028[2].
[1] 2022 AgTech Venture Capital Investment and Exit Roundup
[2] Global AgriTech Market, Forecast 2018-2028, Adroit Research