This year’s World Agritech conference in San Francisco brought together the usual suspects—investors, corporates, startups, and a few farmers. But in characteristic 2025 style, something was different.

The energy was lower. The tone was more sober. Attendee numbers were down. Hallway conversations were more candid. And while there were still pockets of optimism, the vibe overall felt like… a reckoning.

But beneath the doom-and-gloom mood, something more interesting was happening: a sorting.

From the conversations I had, and the various follow up threads online (e.g., here), it’s clear that agtech investors - especially venture capital investors - are rethinking their approach. While some are doubling down, others are walking away. And many are trying to decide which path to take.

Four possible paths forward for agtech VCs

I’ve previously written about how the “is vc a fit for agtech” question is nuanced, and that the opportunity for impact and returns exists within the grey areas. But for many in agtech venture capital right now, the questions they’re grappling with feel quite black and white. Do I raise another fund? Can I? Would it have the same mandate? Can I hand-on-heart expect top quartile venture returns, power law dynamics, and IPO-flavored exits? 

It seems to me that agtech VCs are considering four possible paths forward:

• Stay the Course – stick to the agtech thesis, find the exits, and bet on the companies that still have runway and traction.
• Expand the Mandate – move beyond ag into adjacent sectors (energy, climate, biotech, industrial supply chains) for better diversification and return potential.
• Leave the Industry – cut losses and pivot away from the agtech sector entirely.
• Innovate the Model – acknowledge that venture capital isn’t always a perfect fit for ag—and experiment with new capital models, timelines, or structures.

These paths are not ‘right’ or ‘wrong.’ But they do reflect very different diagnoses—and outlooks—for what agtech is and what investors believe it can be. In other words, the bull and bear cases for agtech investing.

🐻 The Bear Case

For bear case believers, the current disillusionment isn’t just about valuations or macro trends. It’s the result of a series of structural misreads—assumptions that didn’t hold up, and realities that are hard to ignore.

1. Climate Corp Was Misunderstood

The $1B Monsanto acquisition of The Climate Corporation in 2013 kicked off a wave of optimism. But instead of being the beginning of a robust M&A trend in agtech and a sign of broader market readiness, it was a strategic outlier. Many investors built expectations on that deal that haven’t been met since.

2. Industry Structure Doesn’t Support Venture-Scale Outcomes

Agriculture is both consolidated and fragmented. On either side of the farm, many market segments have only a handful of buyers. Corporates move slowly, operate on thin margins, and often lack the capital or appetite for aggressive M&A. For some, Google’s exit from its Mineral project signaled that even the most well-resourced outsiders can struggle to find commercial traction in ag. 

At the farm level, customers are heterogeneous across production systems, operation sizes, and geographies. Achieving product market fit is expensive, and hard to scale. To compound this, most farmers also operate as price takers. When your customer base is under pressure from input costs, weather volatility, and commodity cycles, there's only so much they're willing (or able) to pay—even for game-changing tech.

3. The World Wants Food to Stay Cheap

Agtech solutions often aim to increase efficiency or sustainability, but the global mandate is clear: keep food affordable. And even as food prices rise due to inflation, value chain structures mean that farms don’t get more of those dollars. This limits the total addressable market for large parts of agtech, and caps the margin redistribution opportunities available to agtech companies. 

4. Population Growth Isn’t the Driver We Thought

“We need to feed 10 billion people” was a rallying cry for years. But the logic doesn’t hold. We already produce enough food. The issues are about distribution, waste, and nutrition—not sheer volume. And with global population growth slowing faster than expected, the “more stomachs” TAM narrative many agtech decks were built on looks shakier than ever.

🐂 The Bull Case

And yet… if you zoom out, there are powerful reasons to believe agtech is still one of the most important—and investable—areas for innovation and non-concessionary impact. But only if we can align funding models with how value is actually captured in agriculture.

1. Agriculture Is Enormous

While TAMs may have been exaggerated, the amount of money that flows through the global ag system is still staggering. Inputs, equipment, logistics, finance, and data infrastructure collectively represent trillions of dollars. Shifting even a few percentage points of value in subsets of these markets—through automation, efficiency, or new business models—can yield major returns.

2. Climate Pressure Is Real and Rising

Forget carbon markets and sustainability-linked revenue streams. Think water stress. Heatwaves. Changing growing zones. New pests and disease risks. Market access restrictions. Climate resilience is no longer an abstract future issue—it’s a present-day operating constraint. That means new demand for adaptation tools, decision support, and risk mitigation.

4. Labor Shortages Are Structural

From horticulture to livestock to broadacre crops, every region is facing labor constraints. Immigration policy, demographic shifts, and quality-of-life issues make labor access and affordability issues existential for agriculture. That opens the door for automation, augmentation, and human-in-the-loop technologies, services, and the new practices and paradigms they unlock. 

5. Margin Redistribution Is Already Underway

As technology improves and becomes more affordable, the traditional cost and value capture structures in agriculture are being rewritten. Autonomy can shift margins from equipment to platforms. Precision tools can reduce chemical inputs and shift value from volume to accuracy. Success in these new paradigms will be delivered through external innovation, creating opportunities for incumbents to be customers, partners, and acquirers.

6. The Biology Revolution Is Just Beginning

Biological and synbio tools are coming into their own—driven by improved regulation, decreasing production economics, the juggernaut of advancements in AI, and accelerating customer familiarity. This isn’t just finding a new set of blockbuster molecules—it’s a shift to build discovery engines, or platforms that continuously identify, validate, and adapt new biological modes of action. With this, we’ll also see a transition from chemistries to treat symptoms (kill pests, boost yield), to digitally-enabled biology and practices that work with natural systems—changing how plants grow, how microbes interact, how nutrients cycle – and are incorporated earlier, not just applied as a fix after problems emerge.

So, What Now?

For some agtech investors, belief in the bear case will signal the end of the road. But for others, this is just a difficult season—a moment of reckoning that, if taken seriously, will lead to better strategies, stronger companies, and more grounded conviction.

Because this moment is not just a market correction. It’s natural selection.

Agtech, like agriculture itself, is shaped by harsh conditions. Volatile markets. Cyclical funding. The whim of nature. The investors, founders, and models that survive will be those that adapt—to the terrain, not the theory.

This next chapter in agtech investing will belong to those who learn fast, test assumptions, and evolve. To investors and operators who:

• Replace one-size-fits-all capital with humility and models designed for biological and market realities
• Are clear-eyed about what success looks like—across timelines, return profiles, and value capture
• Stay close to customers, close to the land, and close to the system dynamics that actually matter

At Tenacious Ventures, we’re not immune to the challenges. But we’re not walking away. True to our name, we’re adapting—evolving our models, sharpening our theses, and staying aligned with the realities of agriculture.

This isn’t the end of agtech investing. It’s the necessary pruning that clears the way for stronger growth.

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