Reflections on 2023 AgTech Trends

By Global AgInvesting

2023 was a tough year for startups, reports Global AgInvesting. It was the warmest year on record, and emissions from fossil fuels hit a new high. Geopolitical turmoil, inflation, rising interest rates, hesitant corporate customers, continued supply chain disruptions, and shrinking sources of capital created a challenging environment for private markets. Global startup funding plummeted to $285 billion, down 38 percent from 2022, according to Crunchbase. Climate tech investment saw a 30 percent year-on-year drop in 2023, according to a report from Sightline Climate, which means despite the decline, the sector still outperformed other sectors, with its share of venture capital and private equity investment growing to 10 percent, up from 7 percent in 2018.

Companies have had to focus on stretching existing funding and drastically reducing their burn to show how they might be profitable. But constraints, while uncomfortable, are great for entrepreneurs. The increasing cost of capital meant companies needed to find creative ways to build their businesses. Downturns tend to help entrepreneurs prioritize investment and, ultimately, spending.

There were other promising signs of growth: first-time funders joined deals in large numbers; new technologies that can address climate change, from heat pumps to EVs, are coming to the market and becoming more affordable for consumers; climate policies, from incentives to rules around pollution, are getting passed; and the IEA projected that 2023 would see $1.7 trillion go toward deploying renewables, grids, and other clean-energy technologies.

In March of 2023, we published a white paper entitled “Trends Shaping the Future of Food in 2023.” Almost a year later, we explore the year’s events that influenced the evolution of each trend and our view on its momentum going into the new year. In this post, we will explore how the trends around farmers scaling climate-smart agricultural practices fared in 2023.