In a recent episode of *Ag Tech Talk*, AgriBusiness Global engaged in a conversation with Bob Trogele, CEO of Verdelis Investments / ProAgInvest LLC and President of AMAG Farms LLLP and Trogele Energy and Consultancy LLC. The discussion centered on the current landscape of agricultural technology investments, with a particular focus on innovations driving interest in the crop input space.
Trogele highlighted that ag tech investment has experienced both growth and recent contraction. Currently, ag tech accounts for approximately 2.5% of all venture deals and 1.64% of total venture capital dollars. Despite this seemingly modest share, the sector is facing a challenging environment where for every exit, there are roughly 14 investments. In the second quarter alone, 149 ag tech startups raised around $1.55 billion, marking a 16% drop from the first quarter of 2025 and a 20% decline in the number of deals. The majority of the 11 exits recorded were through acquisitions, indicating a more cautious market approach.
The investment landscape is shifting towards smaller deals, bolt-on acquisitions, joint ventures, and collaborations between large and small players. This trend is driven by larger companies seeking to diversify through technology and move away from low-margin, commodity-heavy models, particularly in fertilizers and chemicals. However, the pressure on startups has intensified, with investors expecting profitability sooner—a significant challenge in agriculture, where technology adoption can be a lengthy process.
Investors are increasingly demanding financial discipline, and venture capitalists, especially strategic ones, are becoming more risk-averse. They prefer to invest once there is evidence of profitability, strong working capital, and demonstrated on-farm adoption. This cautious approach is tempering the momentum in the sector, even as interest in regenerative agricultural practices grows.
Trogele noted that while interest in regenerative agriculture is increasing, farmer behavior is primarily driven by economics. Profit and yield remain the top priorities for farmers, followed by cost savings. If a regenerative solution can deliver these benefits, farmers are more likely to adopt it. For instance, the implementation of connectivity technology at Terranova Farms in California saved them $65,000 annually and reduced water use by 30%, clearly hitting the marks for yield, cost efficiency, and sustainability.
The implications of these insights are significant for the ag tech sector. While investment hasn’t plateaued entirely and capital is still available, it is more selective. The bar for success is higher, and startups must demonstrate clear paths to profitability and on-farm adoption to attract investment. This cautious yet optimistic outlook suggests that the future of ag tech lies in innovations that can prove their economic and sustainable value to farmers.