Precision agriculture funding increases by 71%, surpassing agriculture biotechnology for the first time since 2017, according to Pitchbook data.
In Q2 2025, the agricultural technology (agtech) sector witnessed a significant shift in investor priorities, with precision agriculture (precision ag) startups receiving a disproportional increase in funding compared to agricultural biotechnology (ag biotech) startups. This trend is primarily driven by labor challenges intensifying amid changing US immigration and trade policies.
Precision ag startups raised a total of $580 million across 36 deals in Q2 2025, marking a 71.2% increase in funding compared to the previous quarter. Despite a 12% drop in deal count, the larger investments per deal indicate a growing investor interest in this sector.
Overall, agtech venture capital funding declined by 22.8% in Q2 2025, with fewer deals overall. However, the increased investment in precision ag reflects the targeted investor shift towards solutions that address operational productivity and labour scarcity more directly than biological innovations.
The labor shortages stem from changing immigration and trade policies in the US, making tech solutions that reduce dependency on human labour more attractive. Major incumbents like John Deere appear well-positioned to invest or acquire in precision ag, indicating confidence in the sector’s growth prospects versus the more uncertain ag biotech area.
PitchBook defines precision ag to include drones and imagery analytics, robotics and smart field equipment, farm management software, and field Internet of Things (IoT). Notable precision ag startups that raised significant funding in Q2 2025 include Quantum Systems (Germany), which raised $178 million in Series C funding, Terviva ($63.9 million), Vestaron ($108 million), and Muon Space (California), which raised $146 million in Series B funding.
Investors are turning their attention to technologies that address immediate challenges, such as labor shortages, and are drawn to the potential of AI-driven tools and platforms in agriculture. PitchBook expects significant investment to continue in the precision ag sector, with Q2 deal value and deal count predicted to reach $1.8 billion and 140 deals, similar to quarterly averages in 2024 and 2023.
Notable exceptions to the scarcity of exits across all of agtech include John Deere's acquisition of aerial field-scouting platform Sentera and DeHaat's purchase of smart farming app NEERX. As the labor shortage continues to impact the agricultural sector, it is likely that the trend of investing in precision ag solutions will persist.
[1] PitchBook Data, Inc. [2] AgFunder News [3] Disclosure: our website's parent company or our socials was an investor in Sentera and is an investor in DeHaat.
- The shift in investor priorities in Q2 2025 towards precision agriculture (finance) is being driven by labor challenges (real-estate) intensifying due to US immigration and trade policies.
- Sentera, an aerial field-scouting platform, was acquired by John Deere, demonstrating major incumbents' interest in technology solutions that reduce labor dependency (technology) in the agricultural sector.
- As the weather conditions impact crop growth and the labor shortages continue, data-and-cloud-computing technologies such as AI-driven tools and platforms in agriculture (sports) are predicted to receive significant investments in the future.
