Funding for agritech startups has fallen sharply this year, reversing the surge seen during the pandemic years. After touching record highs in 2021 and 2022, capital inflows have slowed by more than 50% in 2025, leading to shutdowns, distressed deals, and a rethink of business models across the sector.
Profitability and Lack of Exits
According to Tracxn, agritech startups raised $182.19 million in 2025, compared with $390.52 million in 2024 and $498.28 million in 2023. The slowdown is stark when contrasted with the peak years, when the sector secured $1.17 billion in 2021 and $850.62 million in 2022.
Investors attribute the funding contraction to unresolved concerns around profitability. “Funding has slowed because many agritech models still do not demonstrate visibility on sustainable profitability. The funding slowdown has further led to the shutdown of companies, creating a domino effect of confidence in the ecosystem,” Sai Pramodh, vice-president, investments, BlackSoil Capital, told FE.
The stress has already claimed casualties. BharatAgri reportedly recently shut operations due to a funding crunch despite registering about 78% revenue growth in FY24. Meanwhile, Gramophone is in the final stages of being acquired by Unnati Agri in a share swap deal. Its gross merchandise value (GMV) dropped to `98 crore in FY24 from `316 crore in FY23, and reports indicate the company has not been operational for two years.
According to analysts, the sector has not produced strong exits, unlike consumer internet, fintech or direct-to-consumer, making investors more cautious. “Over the last two-three years, innovation has also plateaued in core categories like supply-chain platforms, marketplaces, and drones, with limited incremental value for farmers and supply chain players,” Pramodh added.
Next Frontier
In response to the funding pressure, several technology-led platforms have pivoted to agri-commodity trading and processing to survive, diluting the original tech-first thesis and raising concerns among investors about scalable agritech models. Data from TheKredible show that agritech has accounted for only 2% of venture funding since 2020, even though more than 160 agritech startups raised over $2 billion across 246 deals during the period. Of this, growth-stage companies secured $1.59 billion across 60 deals, while early-stage startups raised more than $500 million across 186 deals.
Despite the pullback, venture capitalists (VCs) insist the correction is cyclical rather than structural. “Capital is becoming more selective, prioritising agritech models with proven scale and strong unit economics. This is a healthy maturity shift,” Jinesh Shah, managing partner, Omnivore, said.
Investors are now focused on climate-smart inputs and biologicals, post-harvest and supply-chain efficiency, agri-automation and robotics, bio-based materials, and climate and soil intelligence platforms. “They offer clear farmer value, measurable outcomes, and scalable revenue models, positioning agritech as a key driver of future climate and food-system transformation,” Shah said.
The sector still has no unicorns, and the long queue of startups eyeing public markets remains stalled. However, industry watchers expect the sentiment to improve in 2026, aided by climate resilience, biological inputs, sustainable materials, commercial readiness of scale-stage startups, cold-chain infrastructure, and policy initiatives around digital agriculture. “As valuations normalise and commercialisation pathways strengthen, we expect renewed participation from strategic and institutional investors, making the next funding cycle more durable and long-term in character,” Shah added.
Pramodh expects investor behaviour to diverge. “VCs with a deep understanding of agriculture, or those with a thematic mandate around climate, sustainability or rural markets, will stay committed, while generalist VCs chasing quick returns have already taken a step back. Development finance institutions like Nabard, Sidbi and state agri funds will need to lead the way as agritech needs long-term, high-risk capital aligned with national priorities,” he said.