The world’s food and agricultural systems are at a crossroads in 2025. Geopolitical turmoil, trade barriers, and pressure on capital markets are affecting both how we produce food and where investors put their money. At the same time, new technology, changing consumer behavior, and health challenges are opening up new opportunities. So what can we expect – and where will (smart) capital go in the year ahead?
1. More protectionism and short-term investments
Mark Durno from Rockstart points to a clear trend: Increased national protectionism and higher tariffs will likely lead to both entrepreneurs and investors chasing quick returns over long-term growth. According to Durno, trade barriers and political turmoil will continue to disrupt commodity markets and threaten the stability of our food systems.
This is reinforced by a capital drought compared to the record years of 2021/2022. Fund sizes are shrinking, and capital is becoming more picky. «There is still capital in the market, but investors will be much more selective,» says Durno AgFunder.
2. From globalization to local security
Dave Chen in Equilibrium Capital Describes to AgFunder a tension between the need for globalization in food systems and a political reality characterized by nationalism, protectionism, and trade barriers.
The result? Growing pressure to cut off dependence on long, vulnerable value chains, according to AgFunder Partner Manuel Gonzalez. He believes investments will shift towards solutions that strengthen local food security, energy supply, and reduce logistics costs.
3. AI and cost-effective models
We will see a boom in low-capital-intensive business models with a high degree of AI integration, according to Rob Leclerc, partner at AgFunder. Agrifoodtech companies can use AI to, among other things, streamline production, improve predictions, and optimize resource use.
At the same time, cost cuts are being highlighted as a key factor. Investors will prioritize companies that can document increased profitability and efficient operations. The food and agriculture sector will still face challenges until we see truly significant exits, according to Leclerc.
4. Health > climate: Consumer needs drive the way
Antony Yousefian from The First Thirty Expects that health benefits will weigh heavier than a climate focus in consumers’ priorities. This is especially true in the wake of the GLP-1 drug wave (slimming injections). Although these medications have received a lot of attention, a huge market is now opening up for food and supplement companies that can offer more accessible, natural solutions for weight loss and satiety.
In addition, Gil Horsky points out in Flora Ventures There is great potential for «functional food» products (i.e., foods and beverages that are designed to have specific health-promoting properties).
In summary: 5 investment trends in agrifoodtech in 2025
1) AI-driven solutions for efficiency and cost reduction
2) Shorter and more robust value chains
3) «Functional foods»
4) Low capital-intensive, scalable business models
5) Food security and local production in response to protectionism
2025 will be a year where agri-foodtech investments will require increased profitability and concrete results, and a greater focus on AI and healthcare.
Source: «Global AgriFoodTech Investment Report 2025» by AgFunder.