Agtech Reset: How Investors Are Separating the Wheat from the Chaff

The agtech sector is undergoing a major recalibration as investors reassess the market following a period of high valuations and capital influx that failed to deliver sustainable returns. Robert Appleby, founder and chief investment officer at Cibus Capital, a London-based private equity platform, says that now is a pivotal moment to identify companies that solve real problems for real farmers. The shift is significant for investors in the US, Canada, and beyond, providing potential opportunities for high-quality, under-capitalized businesses with strong fundamentals.

According to Robert Appleby, writing for AgFunderNews, the recent repricing of agtech has removed companies that lacked viable unit economics or relied on round-led valuations. “High-quality companies are now available at attractive entry points,” Appleby notes, highlighting the sector’s newfound maturity after a period of market euphoria reminiscent of historical investment bubbles.

Lessons from the past and the value of patience

Agtech, Appleby explains, demands determination, grit, and patience, qualities shared by farmers and investors alike. Many startups that emerged pre-2022 were fueled by expectations of rapid returns and bold promises of “revolutionizing” agriculture. These companies often lacked product-market fit and were heavily capital-intensive, creating a bubble that has since corrected.

“The wheat has been cut from the chaff,” Appleby writes, “with investors now focused on businesses that address real operational challenges faced by farmers.” He emphasizes that successful investors combine financial acumen and operational expertise, engaging actively with portfolio companies rather than remaining passive shareholders.

Identifying real solutions

Appleby identifies several agtech segments poised for growth. Enabling technologies such as robotics in high-value horticulture are becoming commercially viable as computing, optics, and sensors become cheaper. Meanwhile, advances in genetics are producing more disease- and weather-resistant crops, delivering marginal productivity gains critical for farmers’ profitability.

“Agtech should solve real problems, encountered by real farmers,” Appleby stresses. He adds that businesses surviving this recalibration will also be selective in choosing investors, rebuilding trust lost during the pre-2022 investment boom.

A more sustainable future for agtech investment

The sector’s moderation provides a fertile environment for private equity and venture capital. Companies are now better capitalized, more resilient from navigating volatility, and strategically focused on long-term unit economics. “The marriage of thinner liquidity and more battle-hardened companies is a potent mix for potential outperformance,” Appleby writes.

For investors willing to remain engaged, the current cycle presents opportunities to support commercially viable innovations while ensuring sustainable growth. According to Appleby, Cibus Capital’s investment strategy reflects the same discipline, patience, and operational involvement required for long-term success in agriculture and food technologies.