Q1 2023 AgTech Venture Capital Investment and Exit Round Up

Last quarter, our analysis of Crunchbase data shows 216 AgTech startups raised a total of $1.44B. This represents a 44% drop in funding and a 13% increase in deals from Q4 2022. There were nine AgTech exits last quarter, all through M&A transactions.

AgTech Venture Investments

Below is a breakout of the deals and dollars that flowed to different sectors of AgTech last quarter:

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The biggest increase in total investment dollars quarter-over-quarter was in the biological crop protection sector where companies raised $92M more than they did in Q4 2022. The largest category drop in total investment dollars was in the supply chain sector where companies raised $494M less than in Q4 2022. The average AgTech investment round last quarter shrunk to $6.6M, down from $13.4M in Q4 2022. The smaller round size trend has been consistent for the last year for AgTech startups.

The 10 largest AgTech investments last quarter were as follows:

AgTech Startup Exits

Below is a list of the 9 AgTech exits last quarter:

Key Takeaways from Q1 2023

Last quarter, there was more than a $1B contraction in capital invested in AgTech startups from Q4 2022. It is a big drop, and the first quarter below $2B in total AgTech funding since Q1 2021. Quarter-over-quarter, venture capital dollars invested across all industries increased by 1%, according to Crunchbase News, which makes the AgTech drop in funding more pronounced than across all sectors.

Despite the reduction in investment dollars, the number of deals continued to grow. The average round size per company dropped below $10M for the first time since 2020 in the depths of COVID-19 lockdowns. The main driver of this drop in round size was a lack of deals worth several hundred million dollars. Last year, there were nine AgTech companies that raised rounds larger than $150M, but last quarter there were zero.

Decreasing round sizes is not necessarily a bad sign for AgTech entrepreneurs and investors. As noted in the 2022 AgTech Venture Capital Investment and Exit Roundup, average M&A exit values dropped last year, despite a strong number M&A exits. Startups are being forced to focus on capital efficiency. Doing more with less will likely be a theme for AgTech entrepreneurs in 2023. Of note is the only publicly available M&A exit price from last quarter was the $110M acquisition of Augmenta by Raven Industries. Raven is owned by CNH Industries which led in Augmenta’s $8M Series A funding round in 2021. For AgTech startups, there is growing evidence that working with strategics early is critical to reach a successful exit.

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