Investment in agrifoodtech has shrunk dramatically since its peak in 2021. Global agrifoodtech investment in 2024 reached $16 billion, down a whopping -71.5%. However, in the U.S., agrifoodtech startups increased funding by +14% to $6.6 billion, which some see as a signal that investment in the sector is stabilizing.
Similar to many other industries, an overriding theme in new investment flows has been AI. According to AgFunder, AI-related technologies attracted over +$100 billion across all industries in 2024, which accounted for about one-third of all venture capital raised last year. In fact, 13 of the biggest 20 funding deals for U.S. agrifoodtech last year went to startups that utilize AI in some way, or at least mention it. At the same time, AgFunder notes that strong startup and investor interest does not directly translate to actual AI utilization. “Looking at cold inbound pitches, I’m seeing a striking number of founders branding—or rebranding—themselves as AI companies,” says AgFunder founding partner Rob Leclerc. “AI is eating VC dollars.”
Leading investment into U.S. agrifoodtech is the “Farm Robotics, Mechanization & Equipment” sector, with funding reaching $345 million in 2024 versus $196 million in 2023, though that’s down from a peak of $508 in 2021. AgFunder says the rebound is based on larger and later-stage deals as the category matures. Notably, the number of deals in 2024 was only 19 versus 35 in 2023 and 60 in 2021.
The two top-funded companies were autonomous tractor company Monarch Tractor, which closed a $133 million Series C round, and laser-weeder maker “Carbon Robotics,” which raised $70 million in a Series D funding round. Walt DuFlock, VP of innovation at trade association Western Growers, a partner of AgFunder’s report, notes that weeding robots are showing the most progress at this point.
Carbon Robotics leads the category, delivering over 100 robots last year and even further growth is expected in 2025. Spraying startups, including “GUSS” and “Ecorobotix,” are also seeing good traction with growers, according to DuFlock. He additionally points to “Harvest Assist” from startup “Burro” which is developing into a whole new segment. DuFlock also stresses that these companies are all delivering machines into the market. Weeds are one of the biggest challenges for farmers, costing some $33 billion a year in lost crop yields. Interestingly, weeds are one of the easier tasks to automate, relatively speaking. Harvesting delicate fruits and vegetables remains one of the most difficult.
At the other end of the spectrum are the agtech categories that continue to lose favor with venture capital. One of the biggest setbacks has been “Novel Farming Systems,” which includes insect farming and vertical farming. The two segments raised just $288 million last year, a -53% decline from 2023.
By far, the eGrocery category has taken the biggest tumble. According to AgFunder, eGrocery raised a mere $21 million in 2024, down from just under $1 billion in 2023 and as much as $4 billion in 2021. Interestingly, the eGrocery category is now led by Amazon, followed by Walmart. The startup that spawned the entire eGrocery category, Instacart, is one of the few that has survived the entry of Amazon and Walmart, maintaining around a 20% market share.
The top state for venture capital in 2024 was California, raising $1.9 billion. While that’s an increase from $1.8 billion the previous year, its a steep decline from $6 billion deployed in 2022. New York clocked $1.5 billion in deals in 2024, more than double the $663 million in deals in 2023. The full report is available HERE.
