By Louisa Burwood-Taylor, AgFunder News
The market correction for startup valuations in agrifoodtech, which is taking place across tech industries too, will continue into 2024, according to all but one agrifoodtech venture capital investor surveyed by AgFunderNews.
And 30% of the 28 eading agrifoodtech investors who responded believe the worst is yet to come for startups trying to raise capital. Some 44% were more positive, believing we’re at the lowest point now fo startup valuations, while 11% believe we are “over the worst of it,” with “better times ahead.” The remainder said they didn’t know where we were in the cycle.
Despite the overwhelming agreement that startups will continue to face significant challenges in raising funds next year, some investors expressed surprise about the extent of failures and down-rounds in 2023, particularly in the alternative protein and vertical farming categories. These categories more than most in agrifoodtech have been supported by the entrance of generalist venture funds, but 2023 saw many of those funds run for cover, frustrating some agrifoodtech investors
Gil Horsky, partner of the recently closed Flora VC, said he was surprised at “how quickly the generalist funds left the segment once things got tough.”
Erin VanLanduit from Cargill’s ventures team was also annoyed at the quick exit of investors in the wake of a challenging environment, but said she was surprised there weren’t more valuation re-sets on her portfolio in favor of “many many bridge convertible notes!”
Rob Leclerc, founding partner of AgFunder (AgFunderNews’ parent company) was surprised “that more companies made it through than I expected.”
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