Agriculture Is Important. That Does Not Make It Investable.
Agriculture is often over-respected at the narrative level and under-examined at the underwriting level.
Agriculture Is Important. That Does Not Make It Investable, Lessons Learned
Agriculture is often over-respected at the narrative level and under-examined at the underwriting level. In APAC especially, the gap between an important category and an investable business is wider than many investors assume. Lessons from 13 years investing in the sector.
Over roughly 13 years in and around agriculture, one view has only strengthened for me: this is one of the easiest sectors to admire and one of the hardest to underwrite well.
That is not because the opportunity is unreal. The system is large, inefficient, politically important, and central to long-term resilience. In APAC, those realities are especially visible.
But importance is not investability.
I keep coming back to that distinction because I learned some of it the hard way. I have made the mistake myself of letting a strong category narrative do too much of the underwriting work.
The investor’s question is not whether agriculture matters. It is where value accrues, who captures it, and whether that advantage can compound at the company level. That is where the category gets harder than many people expect.
Recent market data makes the distinction clearer, not weaker. APAC agrifoodtech funding recovered in 2024, with roughly $4.2 billion raised through October, and India moved back ahead of China in total funding.¹ That is constructive. But the recovery was still uneven, and a meaningful share of the dollars came from a small number of large downstream rounds.¹ I do not read that as proof that agriculture has become easier to invest in. I read it as proof that capital has become more selective.
Why the category is so easy to overrate
Agriculture benefits from one of the strongest default narratives in investing. It is essential. It touches massive end markets. It matters to governments, consumers, and supply chains. It also sits beside themes that sound durable and morally serious: food security, resilience, productivity, sustainability.
That makes the sector easy to respect and easy to overrate.
One of the most common mistakes in thematic investing is to start with a true macro statement and quietly let it stand in for a company thesis. I have done that myself. The world needs food, agricultural systems need improvement, and supply chains remain inefficient. All true. But none of that tells you where margins accrue, who pays, how adoption happens, or whether a company can build an advantage that strengthens with scale.
In a category this important, it is surprisingly easy to confuse moral seriousness with investability.
Six lessons I keep coming back to
- Importance and investability are not the same thing. This sounds obvious when stated plainly, but it is easy to forget in practice. Essential sectors do not automatically produce attractive returns. Some important systems are simply hard places to capture value because complexity, fragmentation, regulation, weak pricing power, and diffuse incentives all get in the way.
- Where value sits in the chain is often less obvious than it first appears. I have learned to be careful here. Agriculture includes many businesses that are useful, admired, and even strategically relevant, but still poorly positioned to capture durable economics. Solving a real problem is not enough if most of the value accrues somewhere else in the system.
- Operational friction is not a side issue. It is often the whole game. Agriculture is embedded in physical systems, local relationships, biological constraints, and uneven infrastructure. Adoption is rarely clean, behavior change is expensive, and execution matters more than novelty. That is one reason software-style pattern matching works so badly in this category.
- In APAC, false aggregation is especially dangerous. Investors often talk about agriculture as if it were one category and APAC as if it were one market. Neither is true. The region is a collection of local systems with different crop mixes, regulatory environments, distribution structures, and customer behavior. In this category, local market structure is not a detail. It is often the investment case. Newer work on Southeast and South Asia points in the same direction: strategies need to be market-specific rather than region-generic, and the capital bottleneck in the ecosystem remains real.²
- Volatility and cyclicality require conservative planning. This sector is more cyclical than many forecasts admit. A base case that looks reasonable in a benign environment can look extremely aggressive in retrospect once the cycle turns or the macro backdrop changes. In agriculture, conservative planning is not a sign of weak ambition. It is usually a sign that management understands the category.
- Exit planning needs to be designed early. For investors, exits in this sector are often harder than the initial thesis suggests. The strategic buyer universe can be narrow, many buyers are price-sensitive or distracted by their own operating issues, and public-market appetite for agriculture-related listings has historically been uneven. I remain hopeful that IPOs can become a more credible path over time, but that only reinforces the point: exit planning has to be deliberate from the start, with a realistic view of who is likely to buy the business, under what conditions, and why.
Where I feel more constructive today
Over time, I have become much more interested in businesses sitting close to a painful bottleneck than in businesses attached to a fashionable theme.
A few areas stand out:
Midstream and post-harvest infrastructure
Storage, aggregation, quality control, cold chain, and processing are not always glamorous, but they often sit much closer to measurable economic pain. If a business reduces waste, improves realization, or speeds throughput in a way the customer can feel immediately, the underwriting gets cleaner.
Compliance and traceability infrastructure
As food-safety standards, traceability requirements, and cross-border rules tighten, some companies are no longer selling optional software. They are helping processors, exporters, and supply-chain operators remain commercially viable. That is a much better place to start than generic digitization language.
Embedded finance tied to real transaction rails
Agriculture has always had a financing gap, but standalone credit stories are easy to romanticize. Better setups are usually the ones where finance is embedded inside procurement, storage, distribution, or merchant workflows, with real operating data and repayment discipline built into the system.
Selected biological, genetic, and industrial platforms
I am not broadly enthusiastic about every deep-tech agriculture story. But some input, yield, resilience, and manufacturing bottlenecks are real enough to create strong businesses if the commercialization path is credible. The key is that the technical promise has to connect to adoption, economics, and execution.
The common thread is simple: I am more interested in businesses solving an expensive, recurring problem in the chain than in ones that merely sound aligned with a compelling agricultural theme.
Why this does not make me pessimistic
Agriculture produces plenty of interesting companies, but fewer truly investable ones.
That is not a cynical conclusion. If anything, this category has taught me that caution and conviction can coexist.
Some very solid agrifood businesses have been built profitably over time, often by founders and families who understood their part of the value chain deeply, compounded patiently, and never needed venture-style pacing to prove they were real.
That is a reminder that agriculture is not a bad place to build. It is a hard place to build. Hard categories can still produce very good businesses, but they usually do so on their own terms and timelines.
In practice, that means being more precise about where value accrues, more realistic about adoption, and more humble about how long durable businesses can take to emerge.
Why APAC raises the bar further
APAC makes the category more interesting, but it also raises the bar for conviction.
The scale is real. The food system matters enormously. There are genuine inefficiencies across the chain. But the region is not one market, and agriculture rarely travels cleanly across markets. What works in one country can fail in another for reasons that look minor from a distance and decisive up close.
That is why I am less persuaded by broad regional theses than by locally grounded ones. In APAC agriculture, conviction usually has to be earned at the market level before it can be generalized.
That is not a reason to avoid the category. It is a reason to underwrite it properly.
What keeps me cautious
I stay cautious when the story depends on too much behavior change, vague monetization, or pilot results doing too much of the work. Those are exactly the things I have learned not to wave away just because the broader theme feels compelling. I am also cautious when a business is clearly relevant to the system but not clearly positioned to capture enough of the value it creates.
I am wary, too, when category enthusiasm starts doing more work than company fundamentals. Recent fertilizer volatility is a useful reminder here. Agricultural businesses can be directionally right and still exposed to shocks they do not control.⁴
At the same time, I am more constructive when the capital stack actually fits the category. Some parts of agriculture need more patient capital than a standard venture tempo allows, especially where hardware, cold chain, industrial capacity, or longer commercialization cycles are involved. Recent IFC work in South Asia makes that case directly: blended and patient capital can help de-risk business models that matter but do not fit a conventional venture timeline.³
Conclusion
Agriculture deserves serious attention. It does not deserve automatic conviction.
The sector does not lack opportunity. What it lacks is forgiveness for lazy underwriting.
My view, after spending much of my career in and around the space, is straightforward: agriculture is easy to admire and hard to underwrite well. I have made the mistake of falling for the narrative before. That is exactly why the bar for conviction should be higher, not lower.
The work is not deciding whether agriculture matters. It is identifying where value accrues, which businesses can capture it, and whether that advantage strengthens as they scale.
That is what separates an important category from an investable one.
The views expressed are the author’s own and do not reflect the views of any associated organizations.
Notes / citations
¹: AgFunder, “Asia-Pacific AgriFoodTech Investment Report 2024” (reporting that APAC agrifoodtech startups raised $4.2 billion through October 2024, up 38% year over year, with India ahead of China in 2024 funding).
²: Rabobank Foundation, “AgriTech in Southeast and South Asia: New Report Highlights Emerging Opportunities” (summarizing the report “The Opportunity for AgriTech Investment in Southeast and South Asia” by Beanstalk AgTech, Briter, and Omnivore, with support from IFC, Rabo Foundation, and FMO Ventures).
³: IFC, “Empowering Farmers Through Innovation: IFC’s Inclusive Agritech Facility Investments in India” (describing how blended finance can de-risk early-stage agritech investment in India, Nepal, and Bangladesh).
⁴: World Bank Group, “Commodity Markets Outlook” (April 2026), noting fertilizer price pressure, trade restrictions, and ongoing supply volatility affecting agricultural inputs.
