Building Workhorses, Not Unicorns
AgriTech startups don't just die of starvation. They die of indigestion.
This is a thought I've had privately over the past couple of years, and one I've been considering more deeply recently as I review the latest wave of capital raises and company shutdowns.
For most of the last decade, AgriTech investment was built on a few simple beliefs:
More capital equalled faster growth.
Distance, distribution and the biological constraints of farming could be solved with capital.
The macro forces of climate change would drive innovation capital into agriculture.
Agriculture would yield similar 75%+ gross margins as other tech-enabled industries.
For a while, the thesis held, propelled by the wave of capital during the Covid years. The capital buffet was all you could eat, as long as you could digest it.
The unicorn graveyard
Unfortunately, we've now seen too many companies who could not chew fast enough.
Plenty. Revolutionary in vertical farming, now bankrupt.
Indigo Agriculture. Peak valuation of USD 3.5 billion, has since lost 94% of its value.
Monarch Tractor. USD 220 million raised across 5 rounds, ceased operations and was recently acquired by Caterpillar.
FarmWise. USD 140 million raised across 8 rounds, wound down and sold in an IP sale to a corporate shareholder.
Over three billion dollars of capital. Four market leaders. Not one venture-scale return.
The model was the same every time: raise big every 18 months, fund the CAPEX, subsidise the losses, and grow as fast as possible toward an exit. And for a while it worked, as long as valuations kept rising and fresh capital was available.
The problem wasn't the technology, their technology was excellent. The problem was that their markets couldn't absorb capital at the rate it was being deployed, and the capital went into AgriTech, but agriculture couldn't digest it.
Then 2022 hit, and fresh capital came with harsh terms at valuations these companies couldn't stomach. Suddenly they weren't raising to grow, they were raising to survive.
That distinction, raising to grow versus raising to survive, is one of the most important lenses a founder can apply to their own business right now.
The funding landscape has fundamentally changed
Finance is a lot like physics, and in 2022, gravity returned.
Global AgriTech investment peaked at USD 22 billion in 2021.
By 2024, it had fallen to USD 9.8 billion, a 56% decline.
Deal count is down 41% from the peak and below 2017 levels.
Deal value in 2024 and 2025 held flat even as deal count dropped.
What we've seen over the past two years isn't a market failing, it's a reconciliation. Capital was deployed too aggressively, into companies that needed more time than the fund structure of that vintage allowed, and the system is now correcting.
This isn't a temporary drought, it's a capital market telling us something, and the companies listening are the ones that will come out ahead.
The mechanics of investment capital
To understand why the market looks the way it does right now, it helps to understand how the capital machine works.
Every dollar invested into a startup, whether it comes from a venture fund, an angel, a strategic, or a family office, arrives with three strings attached:
a liquidity timeframe,
a target rate of return
a set of commercial terms.
What changes is the structure of those expectations, and that structure dictates everything about how you are expected to run your business.
Venture capital is the most demanding form of capital in the market. A venture dollar expects a 25 to 35% IRR and a 3 to 10x return over 7 to 10 years, which in practice requires the underlying business to sustain 120 to 150% annual revenue growth to make the math work.
Angel investors run a similar playbook on a shorter clock, typically looking for a 2.5x return over 3 to 7 years at around 20 to 25% IRR, which still demands 80 to 150% annual growth.
Family offices sit at the other end of the spectrum. They will back 30 to 50% annual growth for a 12 to 15% IRR and a 2 to 3x return, over as long as fifteen years.
These numbers aren't investor preferences, they're the terms of the trade. They are the parameters that dictate when you exit, how fast you grow, and what product and go-to-market strategy you are forced to execute.
The mismatch between the capital you raise and the strategy you execute is where we have seen AgriTech companies break.
Ag is not just software
These expectations would be challenging enough if we were building in a normal market, but agriculture is not a normal market. Your constraints are biological, physical, economic and global. Your solution is being deployed into an environment that closely resembles outdoor manufacturing.
Biology. Complex biological systems that limit iterative R&D cycles.
Weather. Uncontrollable, and increasingly volatile.
Labour. Increasingly scarce and expensive
Compliance. Biosecurity, food safety and sustainability regulations that add cost and complexity.
Distribution. Thin margins, tightly controlled with relationships that take years to earn.
Geopolitics. Trade wars, input and commodity price volatility, currency exposure.
Few industries on earth face such a broad set of constraints simultaneously. And this is exactly why unicorn logic, capital-driven hyper growth, breaks in agriculture.
Investors are buying future cashflows
At its core, investment is buying future cashflows, discounted back to today. That is what a valuation is, and everything else - growth, venture scale, IP potential etc., just informs the discount rate.
So let’s consider the cashflows in agriculture.
At the farm gate, operating margins run 10 to 20% in a good year. In a bad year, over half of farms don't break even and net margins are single digits.
OEMs and dealers are squeezed by supply chain costs and the shift to sustainable manufacturing.
Input providers are absorbing rising regulations and commodity volatility.
Margins are compressing at every layer of the industry, so now follow that chain up to your business:
Tight customer margins mean slower adoption.
Slower adoption means slower revenue growth.
Slower revenue means your cashflows take longer to materialise.
And if your cashflows take longer, the investor math, those return targets, those exit multiples, becomes structurally harder to hit. That trickle-down reality compresses your growth, your ability to raise, and the pool of capital willing to back innovation in agriculture, an industry that desperately needs your innovation to increase its own margins.
Default dead, or default alive?
There's a question every founder should be able to answer honestly, are you Default Dead or Default Alive?
Default dead means:
You need external funding to maintain operations.
You're still searching for product-market fit or cash-flow-positive unit economics.
Runway is your primary KPI.
Without the next raise, the business stops.
Default alive means:
External capital accelerates what's already working.
Your unit economics are positive or break even.
Your business model is validated with paying customers.
You have a positive-sum flywheel that capital can propel.
Being default dead is not failure, and plenty of great companies pass through that phase, but it is a high-risk position, and it becomes increasingly untenable the longer it persists, especially in a market where bridge rounds have disappeared and investor patience has fundamentally shortened.
Two legitimate models, very different strategies
Alongside that question, consider your approach to growth.
🦄 The unicorn model is built on narrative and speed.
Raise fast, scale fast, exit fast.
Capital intensity designed to shortcut or even create the market.
Narrative of potential over demonstrated value.
Requires near-perfect conditions to work at scale.
Built to be an outlier success or a zero return outcome.
🐴 The workhorse model is built on fundamentals and patience.
Prove the unit economics, earn the next season, compound trust.
Capital efficiency designed to outlast the market.
Repeatable value and reliability over story.
Survives the messy reality of agriculture.
Built to survive when things go wrong.
Both are legitimate, and I'm not here to tell you one is right and the other is wrong, but in agriculture, with its constraints, its margins and its adoption timelines, it overwhelmingly rewards execution over revolutionary promises, and the capital markets are now signalling that.
It's about risk-adjusted capital
What AgriTech needs isn't just patient capital, a phrase that gets thrown around a lot.
What it actually needs is risk-adjusted capital: capital structured to match the actual risk profile and return timeline of innovation in agriculture.
We cannot build an industry where every company swings for the fences, only to die at scale or get absorbed prematurely. That isn't a vibrant AgriTech ecosystem, it's a liquidation pipeline for OEMs and incumbents.
What we need are companies designed to operate independently, within a sensible risk band, delivering reliable and scalable returns that investors can underwrite on fundamentals, not on hope that someone bigger will acquire the narrative at the next round.
The workhorse playbook
So what does a workhorse actually look like in practice? I believe it comes down to a few principles, and the metrics that prove the model is working.
The principles
Right-sized capital to ambition. Match the amount and type of capital you take to what your current stage can realistically deliver in value creation. Use early capital and non-dilutive funding to lock in unit economics and customer retention. Use growth capital, or even some debt financing, to scale what is already working.
Scale systems, not headcount. Allocate capital to compounding value: distribution partnerships that accelerate go-to-market, operational systems that scale without growing the team, and product velocity connected to customers.
Own one market first. Start with one beachhead and dominate it. Build reliability and uptime in the field. Let time-in-market become your competitive moat. Trust compounds over seasons.
The metrics that prove it's working
Payback period. How fast does a customer recoup what they paid you?
Seasonal retention. Does the farmer come back year two, year three?
Reliability and uptime. Your technology failing at harvest isn't an inconvenience, it's existential.
Unit economics. Contribution margin per customer, per hectare, per unit.
Channel market activation. Is your product being bundled into active sales conversations by your distribution partners, or does it only move when you drive the demand yourself?
Time-in-market. Because presence and trust compound over seasons, not quarters.
Three paths if you're default dead
Some of you reading this may currently be default dead, and that's OK. The question is what you do next, and you have three paths.
Restructure toward default alive. Reduce burn, focus on your profitable core, make the hard decisions. Companies have done it, I've done it, and it's survivable.
Find the right growth capital. There are investors who genuinely understand agriculture's timelines and margin structure. Show them a clear path to sustainable scale.
Pursue strategic M&A. A strategic acquisition isn't failure, it's often the smartest path for valuable technology trapped inside an unsustainable capital structure.
What doesn't work in this market is raising another bridge round to buy six more months while you figure things out. I believe that is no longer a viable strategy in this capital market.
Longevity is your competitive advantage
The market correction has actually created an opportunity, and it favours the disciplined.
If you've built a well-structured company, you can now differentiate in a way that was impossible when the market was flooded with cheap capital.
AI is disrupting every other technology sector on the planet, but agriculture remains the final frontier. It's physical, it's biological, it's complex. As other markets get flooded and overwhelmed, capital will increasingly look to food and agriculture for defensible, real-world returns.
Longevity is now a sales argument, because when you can prove to a farmer that you'll be here next year, that's not just reassurance, it's a genuine competitive advantage.
Build for adoption, not applause
Every time an AgriTech company fails, the damage goes beyond its balance sheet. A farmer pushes a piece of unsupported equipment behind the shed. A grower stops returning calls from the next startup. Trust that took years to build disappears overnight.
Our AgriTech ecosystem cannot afford more of that.
The companies that will define the next decade of agriculture won't be the ones that raised the most, grew the fastest, or had the best pitch deck. They'll be the ones still there when it mattered, at harvest, in the third season, through the bad year.
AgriTech founders are building in the hardest market on earth, and that is exactly why the opportunity is so large. Because the founders who learn to build within agriculture's constraints will build companies that last, and deliver the returns that capital and agriculture demand.
Now more than ever, agriculture needs workhorses.
