For the first time since the third quarter of 2017, precision ag startups have garnered more venture capital than those in ag biotech, signaling “a notable shift in investor priorities,” according to PitchBook.
New data from PitchBook shows that precision ag startups raised $580 million across 36 deals in Q2, 2025, representing a 71.2% increase in funding to the category (but a 12% drop in deal count) compared to the previous quarter.
PitchBook’s definition of “precision ag” includes drones and imagery analytics, robotics and smart field equipment, farm management software, and field IoT.
Unsurprisingly, labor is the force behind this rise in funding to the sector, as it has been across regions for several years. This is thanks in no small part to an aging farm workforce and changes to immigration policies, which in turn has helped break a path for new technologies in the field, particularly in larger farming operations.
“Labor shortages are a long-term trend, so we expect significant investment to continue in this sector,” notes PitchBook. “As advancements in AI filter down to agricultural applications, such as autonomous farm robots, we will likely see this trend accelerate.”
It should be noted that two deals—both for drone/imagery analytics companies—accounted for more than half of all precision ag funding in Q2. California-based Muon Space raised $146 million in Series B funding, and Germany’s Quantum Systems raised a $178 million Series C.
Removing those two deals from the list, precision ag VC funding totals $256 million, putting the category neck and neck with (and actually a bit behind) ag biotech.
Exits remain few and far between across all of agtech, though John Deere’s acquisition of aerial field-scouting platform Sentera bucked this trend, as did DeHaat buying up smart farming app NEERX. [Disclosure: AgFunderNews’ parent company AgFunder was an investor in Sentera and is an investor in DeHaat.]
‘Growing frustration’ over ag biotech’s promises vs outcomes
Ag biotech is generally among the top-funded agtech categories, and typically far ahead of precision ag. However, in Q2 2025 it raised just $270 million, a 72.5% decline quarter over quarter.
Vestaron raised $108 million, while Terviva’s $63.9 million raise and Puna Bio’s $20.3 million late-stage investment also contributed.
As PitchBook notes, “This trend [of funding precision ag versus ag biotech] may stem from growing frustration over the gap between the lofty promises of ag biotech and the practical outcomes achieved so far. As a result, investors are turning their attention to technologies that address immediate challenges—such as labor shortages—while also being drawn to the significant buzz and potential surrounding AI-driven tools and platforms in agriculture.”
For all agtech investment, the second quarter of 2025 saw investors continue their cautious stance that’s been the norm for more than a year now:
“Q2 agtech VC deal activity totaled $1.5 billion across 117 deals, marking quarter-on-quarter declines of 22.8% in value and 22.9% in deal count,” notes PitchBook.
“We estimate Q2 deal value and deal count reaching $1.8 billion and 140 deals, similar to quarterly averages of $1.5 billion and 213 deals in 2024 and $1.9 billion and 265 deals in 2023. Like almost all sectors, the steady contraction in deal volume has persisted since the market’s high in Q1 2022.”
