New report highlights Africa’s steady agtech growth amid US policy shift

AFRICA – A new report from PitchBook shows that Africa’s agtech sector is holding firm, even as the United States shifts its focus toward large-scale farming.

The Q3 2025 Analyst Note outlines how Africa’s climate-smart tools, mobile-first platforms, and youth-led innovation continue to attract funding, despite ongoing challenges in infrastructure and product adoption.

Between 2014 and 2024, African agtech startups secured $1.56 billion across more than 700 deals. Kenya, Nigeria, Ghana, and South Africa led the way, helped by accelerators such as the AYuTe Africa Challenge, Baobab Network, and GreenTec Capital.

These groups support early-stage ventures with grants of up to US$1.5 million, helping startups move from idea to market.

“Africa’s agtech ecosystem remains fragmented but resilient,” the report states. “While the U.S. pivots toward scale-driven innovation, Africa continues to attract climate-focused capital and philanthropic funding.”

Africa’s digital agriculture market is projected to reach €2.3 billion (US$2.687 billion) by 2030, with over 200 million smallholder farmers as the main target.

However, the report warns that funding gaps remain, especially for early-stage ventures. Long product cycles, market fragmentation, and limited rural infrastructure slow progress.

Investors are now calling for clearer business models and better return on investment.

“Global investor expectations are rising, and African accelerators must evolve to offer clearer ROI metrics and scalable models,” the report notes.

U.S. Bill changes agtech priorities

The report also discusses the One Big Beautiful Bill Act, signed into law in the United States on July 4, 2025.

The law boosts support for farms earning more than US$1 million annually by restoring tax breaks and allowing full expensing of new technologies. This favors larger farms and could change the direction of agtech development in the U.S.

“This strengthens financial stability for big producers,” the report says, “but it also tilts market dominance further toward incumbents.”

Because large farms now have stronger safety nets, smaller ones may feel less need to invest in technology. This could shrink the customer base for agtech startups focused on efficiency and smaller-scale operations.

While North American agtech funding rose to US$11.46 billion in 2025, most of it went to robotics, generative AI, and precision tools. Venture capital firms are stepping back, while climate investors are becoming stricter with funding terms.

As U.S. innovation shifts toward scale, Africa’s agtech scene stands out for sticking to community needs. The report suggests that with the right support, African startups can meet rising expectations and stay on course.

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