2022 AgTech Venture Capital Investment and Exit Roundup
January 25, 2023 Last year, our analysis of Crunchbase data shows 797 AgTech startups globally raised $10.66B. This represents a 13% drop in funding, but a 26% increase in deals from 2021. Startups in all industries raised $445B in 2022, which represented a 35% decline from 2021. Investments into AgTech startups held up much better than in most industries. Last year AgTech venture capital investments made up about 2.4% of total startup investments.
There were 33 AgTech exits in 2022, 32 through M&A and one through a public listing. This is a 25% decline in exit activity from 2021. However, the number of exits through M&A was just one shy of the 2021 number at 33, while the number of public listings plummeted from 11 in 2021 to just one last year.
AgTech Venture Investments
Below is a breakout of the deals and dollars that flowed to different sectors of AgTech last year:
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The largest increase in investment dollars by category was in the Controlled Environment Agriculture sector which saw over $700M of additional capital invested in 2022 than was invested in 2021. However, the top eight deals in that category raised over 80% of all its funding, so a few indoor farming projects were responsible for most of the increase. The other large increase by dollars from 2021 was in the climate monitoring and carbon trading category, which grew by over $490M last year.
The two categories with the largest drops in total dollars invested were the alternative proteins and the supply chain sectors, representing over a $1B decline and a $683M decline respectively.
The 10 largest AgTech investments last year were as follows:
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AgTech Exits
There were 33 AgTech exits in 2022, and below is a breakout by sector:
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Key Takeaways from 2022
AgTech saw investment dollars drop from 2021 to last year, but the number of deals showed strong growth. The growth in deals bucked a trend across all venture capital-backed startups, and the decrease in funding was much less sharp than what was seen in other industries such as FinTech.
In terms of exits, public offerings were almost non-existent last year, a major change from 2021. However, the number of M&A exits was very close to what was seen in the record year of 2021, another place where AgTech was different from the trends in other industries.
While AgTech entrepreneurs will certainly be cheering on the strength of the M&A exit market, acquires are paying less than they previously did for startups. The 5-year rolling average for AgTech M&A exit prices dropped from $138M between 2017 – 2021 to $111M between 2018 – 2022. Acquires are paying less for AgTech startups than they used to. AgTech entrepreneurs will need to be very careful about their fundraising strategy so they do not raise so much capital to price themselves out of a profitable M&A exit.
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