The Backdrop in Asia-Pacific Region
Countries in the Asia-Pacific (APAC) region are home to over 60% of the world’s population. With a rapidly growing population in the APAC region comes increasing food demands. The APAC region is also home to the largest and most diverse agricultural market worldwide. The region covers a diverse range of climates, farmland, and agricultural practices, resulting in significant differences in production between countries. As these nations continue to supply a large source of food and agricultural products around the world, policymakers, farmers, and entrepreneurs are all asking the same question: How can technology be adapted to make the agriculture sector more efficient to take advantage of the APAC’s unprecedented opportunity?
Agtech, at its core, is about innovation and development to help solve farming limitations and problems. The key goals that these technologies try to solve are to grow more, waste less, and do so all while maintaining land and nature. Interestingly, agtech is not a new topic, unlike the internet boom or SaaS technologies, which have been so commonly invested in within the past few years. The Green Revolution in the mid-20th century saw the invention of chemical fertilizers and irrigation systems that helped lift countries, like India out of chronic food shortages. The landscape of APAC agriculture is not just changing; it is being reimagined. A blend of necessity and opportunity drives innovation in agtech within APAC. From precision farming techniques that utilize drones and IoT sensors to sophisticated data analytics platforms, the technological adoption is reshaping how farms operate.
Countries like China, Japan, and Australia are at the helm, investing significantly in research and development, while emerging economies, such as India and Indonesia are rapidly catching up, integrating technological solutions to increase yields and manage resources more efficiently. This pivot not only represents a technological leap, but also a crucial strategy for economic and environmental sustainability in the region.
Delving Deeper into Agtech
Fast forward to today, the 21st century–the Information Age–where agtech advancements range from tangible to intangible technologies. Agtech major development in the 21st century emphasizes the use of extensive data collection to improve farming efficiency. By leveraging real-time data and digital tools, agtech enables farmers to make data-driven decisions that optimize productivity, minimize waste, and reduce the carbon footprint. Agtech, such as IoT-powered sensors, satellite imagery, AI-driven crop management, and smart irrigation systems, are reshaping traditional farming practices.
The APAC region has long been at the forefront of technological advancements and the adoption of clean tech to promote sustainable inputs. In fact, according to HSBC, Asia’s next phase of growth and development is looking towards aligning with net-zero emissions targets at the national, industry, and company levels. With digitalization being one of the two key forces emerging as powerful economic drivers across Asia, the APAC region is positioning itself as a major player in the clean tech investment boom as firms look to play their role in the green transition.
However, while many of the investment strategies for clean tech in APAC have concentrated on “hard” sectors such as the solar and EV space, Agtech is emerging as a high-potential industry. With growing pressures on food security, climate resilience, and resource efficiency, agtech offers scalable solutions tailored to APAC’s diverse agricultural landscape. Although challenges and infrastructure gaps persist, the sector is well-positioned to benefit from the region’s broader green investment momentum, making it a promising and strategic area for future growth and investment.
Investment Space
As of 2024, there has been cautious optimism within the agtech space in the U.S. Valued at roughly $11.5 billion, traditional venture funds are struggling to raise capital, and financial pressures are being placed on large-scale acquisitions of major agrochemical firms. Smaller firms and PE players are also scoping for undervalued and distressed assets as a result of the sensitive market conditions. The primary concern investors in the U.S and Europe face is over policy decisions on climate and trade, which, despite the regions’ significant growth potential, is causing alarm to have effective market recovery. However, some agtech investments have continued to succeed in the Western Hemisphere and across Europe, for example, with Tortuga Agtech, a Denver-based startup focused on automating labor-intensive agricultural tasks, having raised USD 28.6 million to date. As a market, the agtech sector in the United States is valued at $7.5 billion, and continues to capture a large portion of USD raised worldwide. The real question is whether agtech can grow in similar patterns within APAC as with its continental neighbours?
While the APAC region may not be the largest hub for agtech investments, it is undoubtedly the fastest growing and capturing significant market activity. The APAC region saw 3 of the 10 largest agtech deals across 2024, with the largest deal of the year being a $200 million Series C investment in Malaysia’s Aerodyne for industrial drones used in agriculture and other sectors.
On a call with a VP of a Singapore-based fund that focuses on Seed to Series B investments, they mentioned the ‘J-curve’. Agtech investments tend to follow a steeper “J-curve” compared to SaaS or consumer tech: long development cycles, slower adoption curves, and a customer base (farmers) with tight margins and decision fatigue. Startups often face years of net losses before scaling. As the VP noted, what the Fund looks for is investing in the area where they are exiting the negative part of the J-curve. They look for product market fit, even if they do not reach $100 million in revenue, they are constantly on the lookout for potential. The Fund talks to potential clients to understand the team and to see if the prospective startup they are willing to invest in has the knowledge and is commercial-minded.
Technologies in Agtech–Where There is Growth Potential
There are major developments in agtech, spanning from digital and precision technology to controlled-environment technologies, but there are two specific technologies that show strong potential for growth: farm technology and TECA platforms.
Farm Technology
Farm technology–which falls into the digital and precision farming category–is continuing to evolve and many farmers are taking key advantages to support their workload and increase margins. Globally, according to the McKinsey 2022 Global Agricultural Technology Adoption Report, around 39% plan to adopt farm management software in the next two years, which was highlighted as the top use-case. Farmers are now using drones, satellite imaging and IoT-enabled sensors to monitor crops, soil health, and microclimates in real time. This pushes for the concept of telemetry–a buzzword that continues to float around the agtech space. Telemetry refers to the automated collection and wireless transmission of data from remote sources, allowing farmers to continuously monitor and respond to real-time conditions across their fields.
The growth of many successful agtech products and innovations comes from their adaptation to telemetry, and being able to collect and make sense of real-time data. Furthermore, investors and farmers are both focused on ubiquitous data solutions, specifically for consumers and businesses that, as a market, have been demanding greater transparency and knowledge in farm-to-table supply chains and sustainable practices within these organizations.
TCEA
A large part of what has been accelerating the growth in the agtech industry is TCEA. Total Controlled Environmental Agriculture (TCEA) platforms are among the most promising innovations in the agtech space. As urbanization accelerates and arable land becomes increasingly scarce, TCEA platforms offer a space-efficient solution by leveraging AI-driven monitoring and sensor technology. Within contained environments, TCEA platforms enable farms to stimulate the ideal conditions for crop yield maximization, while minimizing resource waste. These systems provide precision control over key factors, such as temperature to nutrient delivery, ensuring optimal conditions for plant growth regardless of external weather conditions.
Vertical farming, a key application of TCEA, is rapidly expanding across the APAC region, offering a scalable solution for food production in land-constrained urban centers. Cultivated in stacked layers within climate-regulated structures, vertical farms maximize output while reducing land and water usage. Increasingly, farmers are becoming part of a smallholding system, with roughly 80% of farms within APAC are small holdings. This presents an opportunity for mobile-first, cost-efficient, and plug-and-play technologies, which will likely see rapid uptake, especially in regions with strong digital infrastructure, like India and Vietnam. Artisan Green, a Singapore-based commercial farm–operates in the TCEA space–exemplified this opportunity in vertical farming through the use of digital infrastructure. After partnering with Siemens, a global leader in automation and digitalization, Artisan Green developed a cutting-edge TCEA system that leverages advanced automation and digital infrastructure to bring sustainable, high-yield farming to Singapore. This collaboration has led to a 25-fold increase in the yield of leafy vegetables and herbs, enabling a monthly production of 25 tonnes—equivalent to over 134,000 meals. The system also achieves a 95% reduction in water usage compared to traditional farming methods and operates at an energy consumption rate of only 15 kWh per kilogram of produce, surpassing the Singapore Food Agency's Clean & Green standards. Additionally, the implementation of this technology has resulted in a 50% reduction in energy consumption relative to conventional indoor growing systems. Together, TCEA and smallholder farming dominance call for many agtech applications into play and the prediction of agtech success.
Adoption Presents as a Key Challenge in Agtech
A large portion of farmers in the APAC region are small-holder farmers, providing the majority of produce to the region and responsible for ⅓ of produce globally . However, larger farms (over 5,000 acres) are generally more open to adopting agtech solutions, while smaller farms (under 2,000 acres) tend to be the least likely to do so. This may be due to the challenge of educating farmers on the technology and taking it a step further by integrating the technology. The digitalization of agriculture is setting higher hurdles for smallholder farmers in the region. Many of the farmers are multi-generational professionals who keep their conventional farming practices close to their hearts. Smallholder farmers have limited access to digital technologies because of affordability issues, skill gaps, and the opportunity costs of changing their practices. Consequently, not many of them use digital technologies, and those who do are not very active or intense users, which is found to be the opposite for large-scale farmers.
Another issue that has been in constant notice is the concept of decision fatigue. Farmers are already burdened with daily operational decisions, especially since many of the farms within the APAC region are smallholder operations. Precision tools, data dashboards, and sensor systems—each claims to solve different problems. The pressure to integrate multiple tools, learn new interfaces, and assess ROI from fragmented offerings can become overwhelming, often leading to hesitation or resistance to adoption altogether. For investors, this presents a challenge: even strong technologies may underperform commercially, if end users are too fatigued or uncertain to adopt them. As a result, VCs are increasingly cautious, focusing on startups that simplify user experience, integrate seamlessly with existing farm operations, and offer clear, measurable value with minimal cognitive load on the farmer. Management overhead, overcomplexity of technologies, and a highly concentrated market are pressuring farmers across nations such as Singapore, Indonesia, and New Zealand to test and adopt one company’s specific technologies.
However, the fear of consolidation, acquisitions by large-scale companies, and the risk of complexity in operations bring the most significant challenges from an investor perspective to the agtech market.
Agtech startups have faced significant challenges in scaling, with few reaching the stage of going public or securing later-stage funding. According to a McKinsey analysis, a major reason is the difficulty many of these startups face in building a strong customer base. This highlights a core limitation in the agtech sector: adoption rates vary widely across regions. Farmers in Europe and North America are leading the way, with approximately 61% already using or planning to adopt agtech solutions within the next two years. In contrast, adoption in Asia lags far behind—only 9% of farmers report current or intended use of agtech products, despite the region being home to the world’s largest agricultural market.
This disparity is evident when comparing vertical farming companies, like the U.S.-based Plenty and Japan’s Spread. While Spread operates with a fraction of the funding that Plenty has received, its production yields are remarkably similar—underscoring how access to capital, rather than innovation or efficiency, can be a major barrier to growth in the APAC region.
The Road Ahead
One of the key hurdles of the APAC region from unlocking its potential in the agtech space is adoption. Unlike Europe and North America, where large-scale, capital-intensive farms are common, the APAC region is unique, where the majority are smallholder farmers. Startup founders that are looking to enter the agricultural space in the APAC region, should look to address the problems faced at the smallholder farmers level. Agtech in APAC must prioritize affordability, ease of use, and adopting across various regions. Solutions like mobile-based advisory platforms, low-cost IoT devices, and shared economy models for farm machinery can make innovation more accessible. More importantly, expanding access to funding for both farmers and agtech startups. In contrast to the mature VC ecosystems and well-structured government subsidies in Europe and North America, many farmers in the APAC region and agtechs struggle with limited financial support. Governments should mobilize microfinancing programs and derisking methods to encourage agtech adoption.
Looking ahead, agtech is positioned to become the talk of startups and investments in the APAC region, driven by threats of climate change, the demand for full chain transparency, and move towards a green economy. While this shift will take time, the growing demand for telemetry and a ubiquitous data layer will continue to spark innovation and fund creative solutions essential for sustainable food production, natural climate preservation, and food security. By lowering the financial barriers and tailoring technologies to smallholder farmers, the APAC region can unlock massive potential for agtech, ultimately driving more efficiency in the agricultural space.
