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Ag-tech exit activity plummets

Alan Neuhauser
Sep 19, 2022
Data: PitchBook; Chart: Nicki Camberg/Axios

The IPO market for ag tech is laying fallow as market volatility and cooling valuations have sharply reduced both the number of exits and exit size in the sector, per new data from PitchBook.

Why it matters: The Inflation Reduction Act may be stoking chatter at climate gatherings this week, and it includes pots of money for agriculture. But, for now, the IPO window is all but closed in ag tech.

What's happening: The ag-tech sector, which focuses on making farming and ranching more efficient, has seen a steady decline in exit size and exit count since a peak in Q3 2021.

  • That broadly mirrors a turnabout in exits generally as markets have cooled.

By the numbers: Last quarter saw just three exits, down from a high of 18 near the end of 2021.

  • Meanwhile, exit value in Q2 bottomed out, from a peak of $16.7 billion in Q3 2021.

What they're saying: "The market volatility is the biggest driver here," Alex Frederick, senior emerging-tech analyst at PitchBook, tells Axios. "The IPO window has been shut for the past quarter, quarter-plus. That limits exit opportunities for startups."

👀 What we're watching: Whether M&A activity picks up, and in which sectors. Indoor farming, for example, was one of the few bright spots for funding last quarter.

  • "That is creating opportunities as companies become more attractive as valuations come down," Frederick says.
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