Our Reflections On The Market
We analyze the current market volatility and what it means for agriculture.
Market Signals
14%: U.S. agrifoodtech funding in 2024 was up 14% year over year, according to AgFunder’s latest Global AgriFoodTech Investment Report.
1.88 million: The number of farms in the U.S. fell to 1.88 million in 2024, the lowest level on record, according to the USDA.
37 deals worth $1.17 billion: In Q1 of 2025, there were 37 deals worth $1.17 billion in the regenerative agriculture and food systems space—exceeding any quarterly total in 2024, according to RFSI.
Our Reflections On Market Volatility & The Opportunities Ahead
In reflecting on the last few weeks of market volatility and the potential changes in tariff policies, there is a lot we don’t know.
On one hand: It seems likely that the U.S. farm economy will be in for a rocky road ahead and food prices are likely to increase (43% of farm labor is undocumented workers, and 50% of our agriculture exports go to China, Mexico, and Canada). Roughly 20% of farm income comes from exports, and farmers rely on imports for inputs like fertilizers and equipment.
On the other: The architecture relied upon for global trade for nearly a century has been forcefully disrupted, and the stock market is down only ~5% since the beginning of the year. If DOGE is able to chip away at the welfare payments to the industrial corn and soy industry in the Farm Bill, and the MAHA movement is able to deliver on its objectives of getting chemicals out of our food supply and ultra-processed foods out of our children's mouths, we could be headed for a golden era for regenerative agriculture in America.
But as Nick Schroer, our Principal at Trailhead, discussed recently in this newsletter, there are reasons to be optimistic that 2025 and 2026 could be years for power-law returns. Here are a few additional reasons why we’re excited about the next 24 months of investing.
Volatility and timid capital markets have created uncertainty, and uncertainty creates resilient companies.
Capital scarcity acts as a filter, and leaner startups with discipline and execution will be rewarded with success.
We are in a buyers’ market unseen in years with entry prices 30-50% off the 2021 highs.
We are at the start of generational s-curves for megatrends like applied AI, regen ag, genomics, and food systems transformation.
The current geopolitical context is accelerating the transition we've anticipated. We believe that food security and resilient supply chains will be more critical than ever, while more high quality food will be produced to meet increasing consumer demand. Our portfolio companies will continue to accelerate and enable these evolutions in our global food system.
As we raise Fund II, we are continuing to invest based on the fundamentals that have made Fund I successful so far. We’re applying hard-earned lessons, leveraging a stronger team with deeper expertise, and continuing to do what we’ve always done: invest in companies with the potential to create outstanding financial, societal, and ecological returns.
— Mark & Pete
Founder Fundamentals
How to market your product when every marketing channel is oversaturated. On his Substack, Andrew Chen, General Partner at Andreessen Horowitz, wrote recently about the challenges of marketing at a time when many channels—from SEO to ads to affiliate marketing to newsletters—are “not working, or are slow, expensive, or one-time only.” For startups looking to outperform their peers and take risks, he recommends the following:
Don’t focus on Big Channels, focus on Little Channels. “A new startup has to be asymmetrical — what can you do that they can’t? The natural solution points towards Little Channels, which are all the smaller marketing strategies that are tried in the early days and abandoned over time.”
Don’t worry about scaling. Do things that don’t scale. The response rates in little channels will be higher since you’re doing it all by hand, and you can always scale over time by moving onto the next channel. If you can prove that a few unscalable tactics work and help you gain momentum, then you’ll have more time to try additional strategies.
Take risks with your brand. You can attract people to your brand by being polarizing.
Portfolio Updates
Eion, an enhanced rock weathering startup, secured a $33m carbon removal offtake deal with Frontier. It also struck a landmark carbon insetting deal with Perdue Agribusiness.
HowGood has partnered with Chartwells, the college food-service provider, to officially begin tracking its Scope 3 emissions. Separately, HowGood’s chief innovation officer, Ethan Soloviev, wrote an op-ed in FoodBev Media exploring how regenerative agriculture can bridge the gap between cost and sustainability. Finally, HowGood has partnered with sustainability platform Watershed to provide a “comprehensive sustainability reporting platform” to any company with a significant food and beverage footprint.
Emma Fuller, Co-Founder of Fractal Ag, was featured in a Q&A with RFSI. Separately, Fractal was featured in a Builders Vision article.
What We’re Reading
Six Proposed Farm Bill Changes to Watch. Six bills were introduced in the last few months that could impact land access, meat industry concentration, state animal welfare laws, crop insurance, and more. Civil Eats.
How AI Could Transform The World For Good. The founder of Anthropic, Dario Amodei, wrote a lengthy but beautiful essay on the unlimited upsides of AI called “Machines of Loving Grace.” Dario Amodei.
A Framework For Investors To Invest in Agriculture Transition. Climate Bonds Initiative developed a new framework to guide financial institutions, investors, and stakeholders through the complexities of financing a credible, just, and science-aligned transition in the agrifood system. Climate Bonds.
Report on Financing Decarbonization in Food and Agriculture Value Chains. SustainCERT produced an industry report that offers a comprehensive overview of the food & ag sector's financial landscape and introduces collaborative strategies to accelerate decarbonization. SustainCERT.
Farming Can Be a Testbed For AI Innovation. An op-ed in AgFunderNews argued that farming is no longer ‘old-school.’ It’s the ultimate testbed for AI innovation. AgFunderNews.
The Impact of The Trade War on Agriculture. U.S. agriculture isn’t nearing a trade war tariff crisis, it’s in a ‘full-blown crisis already,’ farmers say. CNBC.
The Trailhead Jobs Board
Trailhead’s 29 portfolio companies are hiring for 29 jobs. Check out the roles on the Trailhead Job Board.