Once lauded as the next big thing for the agrifoodtech industry and a solution to climate change, agriculture and forestry carbon farming services face a tough road ahead: in the first half of 2024, they raised just one-tenth of the $100 million raised in the same period a year earlier.
Ag & forestry carbon services companies support farmers and foresters in adopting sustainable and regenerative practices that sequester and store carbon, earning them carbon credits to trade on the voluntary carbon market. Credits must be measured and certified before trading — typically using “measurement, reporting, and verification” (MRV) services, and then traded on marketplaces; some companies do both.
Engaging farmers remains a significant challenge, however. According to a 2024 Purdue survey, low ROI is a major barrier, with only 8% of respondents discussing carbon capture and contracts with companies. As a result, agricultural carbon credits presently account for just over 1% of total carbon credits issued.
But the industry has also seen its fair share of controversy, including high-profile scandals involving carbon certification and offset providers like South Pole and Verra, which were investigated for allegedly providing fake certifications for carbon offsetting programs. These issues, coupled with a drop in funding in 2023, kicked off a turbulent period for the industry, perhaps surprising some venture capital firms, several of whom had identified carbon as a category to invest in for that year.
The broader economic environment has certainly posed difficulties too; the second half of 2022 saw the end of cheap money and inflated tech valuations due to war, high inflation, and supply chain disruptions. This shift significantly impacted the entire agrifoodtech funding landscape, which had reached a record $51.7 billion in 2021, to backtrack to $32 billion in 2022, and then plummet to below $16 billion in 2023.
When in 2023 AgFunder polled a range of venture capital investors focused on foodtech and agtech to get their predictions for the year, several respondents mentioned carbon as a key area of interest for investors and innovators. Among them, Michael Lavin of Germin8 Ventures highlighted the potential for significant changes in the carbon economy over the next few years: “We believe the landscape of MRV companies, other facilitators, marketplaces, and the carbon economy as a whole could look completely different in the next year or two”.
Despite the recent moments of reckoning and the still significant challenges ahead, the agro carbon services industry has shown a certain degree of resilience in recent months, with carbon-focused companies inside the AgFunder categories of “Farm Management Software, Sensing, and IoT” and “Ag Marketplaces and Fintech” jointly raising nearly $100 million in H1 2023.
Unfortunately, the number plummeted to $9.7 million in H1 2024, according to preliminary data from AgFunder. A few companies in the carbon services sector managed to secure seed round deals in the first half of the year, however.
Seed stage deals in H1 2024
Downforce Technologies (United Kingdom) raised $4.2 million on June 17, 2024. The company is pioneering science-led, data-driven land management solutions focused on optimizing soil health, soil organic carbon, and biodiversity. Its platform enables precise analysis and site-specific strategies for optimizing carbon levels.
Seqana (Germany) raised $2.3 million on May 30, 2024. The German startup offers a monitoring SaaS for soil organic carbon to enable project developers and agrifood corporates to measure and understand soil carbon sequestration in a fast, precise, and affordable way.
Jejakin (Indonesia) raised $2.7 million on May 2, 2024. The company’s vision is to offer integrated solutions for climate tech projects to help clients meet regulatory climate disclosure requirements and other sustainable needs.
2023's largest ag & forestry carbon services deals
To find some of the largest deals in the sector, we have to go back to 2023.
🇩🇰 Agreena (Denmark) raised $50.16 million in a Series B round in March 2023. The company created a soil carbon platform to scale regenerative agriculture through finance and technology. It can verify, mint, and sell carbon credits generated by farmers, as well as issue third-party verified carbon certificates. Agreena provides clients with both finance and scientific technology solutions to accelerate their transition to regenerative agriculture and allow farmers to increase their yields.
🇺🇸 EarthOptics (United States) raised $27.6 million in a Series B round in January 2023.
A soil cloud creator specializing in sustainable agricultural management, the company offers insights into soil management and health as well as near real-time actionable data layers that cover the physical, chemical, and biological characteristics of the soil. This technology allows farmers to obtain accurate soil information while also offering carbon creditors low-cost, hyper-accurate verification.
🇺🇸 Yard Stick (United States) raised $10.6 million in August 2023, with a Series A round.
The startup promises to reduce the cost of soil carbon measurement by 90% and plans to expand the opportunities for evidence-based regenerative practices to improve ecosystem health and increase farmer income.
🇺🇸 Nori (United States) raised $6.25 million with a Series A round on June 6, 2023.
The voluntary marketplace platform will enable carbon removal suppliers to connect directly with buyers, improving efficiency, and reducing costs.
🇺🇸 Athian (United States) secured a $5 million seed round in May 2023.
The company’s key mission is to help the beef and dairy value chains capture and claim carbon credits earned through sustainability programs while monetizing those reductions through the sale of carbon insetting credits.
🇺🇸 ReSeed (United States) raised a $4.6 million seed round in September 2023. The startup partners with farmers around the world to create a new revenue stream from the carbon they store, which can be traded as asset-backed tokens.
🇫🇷 FoodPilot (France) raised a seed stage deal of $4.4 million in December 2023. The company enables agro-food companies to manage their sustainable transition with a SaaS platform that collects, measures and drives CSR progress, as well as the environmental, carbon, and social impact of food products from farm to fork.
🇱🇹 HeavyFinance (Lithuania) raised a seed round of $3.25 million in March 2023. The startup promises to remove 1 gigaton of CO2 emissions by 2050 by connecting farmers with investors to facilitate the adoption of sustainable soil management practices like no-till farming that can help store CO2 in the soil.
🇫🇷 CarbonFarm Technology (France) raised $2.65 million in October 2023 with a seed round. The startup aims to decarbonize rice farming while making regenerative agriculture lucrative for farmers by harnessing satellite imagery and AI to monitor and certify low-carbon projects at scale.
