Private Capital & the future of Sustainable Agribusiness

The Kestria Agribusiness & Agriscience Global Practice Group has assembled leading experts from key regions to analyse how private capital is reshaping sustainable agribusiness. They discuss evolving investment trends, regional challenges and innovations, as well as the vital role of skilled talent and strategic partnerships in driving resilient food systems and long-term growth worldwide.

Key takeaways:

1. Private capital is a catalyst for sustainable agribusiness, but long-term impact demands alignment between financial returns and environmental and social value.
2. Investment success depends on understanding diverse regional contexts, from resource constraints to market dynamics.
3. Skilled talent and cross-sector partnerships are critical to scale innovation and build resilient, future-proof food systems.

Investment trends in Agri & Food Tech

Hemendra Mathur, Venture Partner at Bharat Innovation Fund, highlights that India, with 1.45 billion people, consumes about 1,000 million tons of food annually, with a food economy nearing one trillion dollars. 'Agriculture contributes 18% of GDP and supports nearly 700 million rural livelihoods, making food security a critical priority.

Agricultural innovation started with government-led revolutions in the 1970s–90s, followed by private startups sparking an agri-tech revolution around 2010. Today, 95% of agri-tech focuses on digital solutions for farmer access to markets, inputs, finance and advisory services.

Early investment was modest, about 500 million dollars by 2017, led by impact investors due to high risks. Entrepreneurial interest surged in 2017–18, accelerated by the pandemic, with valuations exceeding 100 million dollars and increased global investment.

Investment peaked near one billion dollars in 2021 but dropped to 300–500 million in 2022–24 amid valuation corrections. This led to more disciplined investing focused on profitability.

Cumulative investment over 15 years reached about four billion dollars and could exceed ten billion in the next decade through IPOs and sales. Despite progress, agri-tech accounts for only 3% of India’s venture capital and private equity. After a dip to 500 million in 2022–23, investment momentum is returning and is expected to surpass one billion dollars within two years.'

The greater Middle East, Africa and even India are rapidly growing demographically and poised to have the Gulf region a key global hub. The region’s manufacturing ecosystem is expanding with strong government and private investment. Though not a major agricultural producer, the Middle East is a vital transit hub for about one-third of global commodities passing through the UAE and surrounding areas, which can be transformed into higher-value products and ingredients.

Biotechnology is advancing rapidly, replicating natural plant and animal processes in controlled environments. Despite cost and regulatory challenges, these technologies will play a key role in diets within the next decade or two.

In summary, the Middle East is a dynamic, fast-growing ecosystem facing similar challenges to the rest of the world when it comes to increasing food production pressure amid global population growth from 8.2 billion to 11 billion, expected to rise by 50% over the next decades before declining due to sub-replacement fertility rates.'

Marcos Haaland, Operation Partner Agribusiness at Patria Investments, Brazil, explains that agribusiness development in the country began with private investment supported by public research. 'In the 1970s, government research centers developed technologies to adapt temperate crops like soybeans to tropical conditions.

Brazil is now a major producer and leading exporter, with annual agricultural exports around 150 billion USD, feeding about one billion people daily by calories. Despite climate challenges, the sector has advanced rapidly through technologies such as no-till farming, crop rotation, precision application, crop-livestock integration, cover crops and especially bio-inputs, where Brazil leads globally due to local environmental needs.

As José Francisco noted, Brazil attracts rising investment from the Middle East and Asia due to food security concerns and its role as a key food production hub. Latin America is expected to supply about one-third of global food demand, with over half of future growth from South America.

This focus aligns with Patria and other private capital players targeting Brazil as a central hub for agriculture and livestock. The Andean region mainly exports fruits and vegetables, while Brazil, Argentina, Uruguay and Paraguay focus on protein, soybeans, livestock and corn.

Biofuels are an emerging priority, with strong investment in sugarcane and corn-based fuels driven by sustainable aviation fuel (SAF) demand. Brazil aims to be a major low-carbon ethanol producer for SAF, positioning South America at the forefront of food and biofuel investment in the energy transition.'

Sakhiwo Glen Zamisa, Non-Executive Chairman at African Pioneer Group, South Africa, shares that the group is expanding into agriculture while holding mature beverage assets, including a minority stake in Coca-Cola. 'But we also own a dairy operation near Port Elizabeth that evolved into a full dairy product range.

Our interests include citrus farming, with growing partnerships in Uruguay and Argentina, focusing on the full value chain beyond exports.

Agriculture accounts for 2.5% of South Africa’s GDP (2023), with 10 million hectares cultivated and nearly 230 million livestock. Agricultural exports hit a record USD 13.7 billion in 2024, up 3%, supporting significant employment.

Challenges like water scarcity, climate change, natural disasters and energy shortages drive innovation and attract investment. The carbon credit market is emerging with early talks underway.

South Africa supports the Southern African Development Community (SADC), including countries with significant migration flows. Its population exceeds 60 million, including migrants from Nigeria.

Agribusiness growth relies on technology and strong community partnerships. Land ownership remains complex due to historical displacement, addressed through collaboration.

Success requires a deep understanding of the local environment, history and social context. South Africa offers opportunities and challenges for committed investors with respectful local engagement.

African Pioneer Group is an active local and international investor, including in Argentina and Uruguay. We seek partnerships with tech providers and private equity to grow. Despite challenges, significant potential exists and crises can create mutual benefits. We are also exploring fishing industry investments.'

Risk & return in Sustainable Agriculture

Marcos Haaland notes that Patria invests in producing and distributing agricultural inputs across Brazil’s agriculture and livestock sectors. 'Beyond returns, we drive transformation by introducing new technologies and practices to small and medium farmers via our products, network, and consultants. For example, when selling livestock products to small ranchers, we guide sustainable, tech-driven methods to improve land use and yields.

Brazil’s agriculture is polarised: 20% of farms produce 80% of output, yet about 3 million small farms urgently need better technology and reliable information. Sustainability includes practices like no-till planting, crop rotation and cover cropping. Growing multiple crops annually, such as soybeans, carrots, corn and livestock rotation, is common, helping soil biodiversity and resilience.

Though sustainability can raise costs, producing two crops yearly on costly land boosts returns. Investments increase, but revenues grow more, improving margins. Studies confirm these practices raise dollar returns per hectare, making them financially sound.

Strong consumer demand pushes companies toward sustainability, but investors may pull back if revenue gains lag. Some practices, like biological fertilizers, add upfront costs with benefits appearing after two or three seasons. Consumers often say they’ll pay more for sustainable products but rarely do, leaving farmers to absorb costs. Larger farmers can invest, but smaller ones struggle due to limited capital and short horizons, slowing sustainability’s scale—though progress continues.

Globally, biological fertilizers are fast-growing. In Brazil, bio-inputs grow about 30% annually from a small base. Most biological inputs are for crop protection; biological crop nutrition is newer. Around two-thirds of farms use some biological input, applied on roughly 130 million hectares, sometimes repeatedly, showing strong market growth.'

Venture capital interest is limited since many innovations are still at the early proof-of-concept stage. Thus, public funding from governments and foundations is essential to support them.

The second major concern is soil health. Although India has nearly 160 million hectares of farmland, soil fertility is declining due to an imbalanced NPK ratio caused by heavy nitrogen subsidies. Promising advances in soil testing and biological inputs exist, but adoption is slow as farmers hesitate to change practices. Venture capital interest is present but still limited.

The third critical issue is post-harvest losses, with India wasting nearly one-third of its produce, causing significant value loss. Reducing this waste through processing, storage, cold chains and demand-driven supply chains offers major opportunities. This area attracts most venture capital, about 80% of agri-solution investments focus here.'

Scaling innovation through capital

Hemendra Mathur observes that many startups focus on scaling quickly, and in India’s vast market, building a $100 million business, even in a small area, is possible. 'However, trade businesses have thin margins (2–4%) despite technology use. Success requires specialising in one supply chain, like paddy, soil health, fruits, dairy or fisheries, and working closely with farmers to deliver the right technology, biological solutions and real value addition across the supply chain.

Processing produce is key. Microprocessing and microstorage can boost margins from 2% to 20%, since offseason prices often double harvest prices. Additional value comes from dehydration, milling and grinding. Adding traceability, via technologies like blockchain, lets buyers verify origin and quality, enabling premium pricing, especially in export markets like the Middle East.

This approach limits rapid scaling—agriculture grows about 2% annually versus investors’ 3-4x expectations. Still, building a profitable $100–150 million business in 7–10 years is possible, with stock market listings attracting valuations of 30 to 50 times EBITDA, typical for India.

Farmers want holistic solutions, but startups often offer point solutions. Building alliances is essential to provide financing, inputs and packaging support. Collaborating with the right partners enables comprehensive offerings and reduces failure risk. Strategic partnerships are key to sustainable agritech growth.'

José Francisco Fernández Serna believes the industry requires investors to carefully consider its unique cycles. 'In agriculture, the harvest cycle is fundamental, but the sector also depends heavily on partner interactions and private team involvement. In the ingredients sector, for example, the sales conversion cycle typically spans 18 to 24 months—the time needed to substitute or replace an ingredient in a consumer product. This process involves changes in packaging, supply chains and internal quality control procedures, making it significantly longer than cycles in many other industries. Consequently, investing in the food system demands deep knowledge and long-term commitment. Many promising food startups, including numerous unicorns, have failed due to these challenges. Therefore, transparency is essential to leverage available impact funding alongside more cyclical and structural support from governments. Non-dilutive grants, frequently mentioned by my colleagues, represent a vital mechanism to stimulate and sustain this critical sector that feeds the global population.'

Strategic Partnerships for Long-Term Impact

Sakhiwo Glen Zamisa perceives strong partnership opportunities in South Africa, particularly in underdeveloped sectors like agritech. 'While progress is being made, it remains limited, pointing to clear potential for growth. Sustainability for us includes crop rotation, environmental preservation and community inclusion. We've learned from past missteps, such as in mining, where negligence left lasting harm to communities.

For us, sustainable growth means caring for both the environment and communities, living and investing responsibly. Investors bring expertise we welcome, and South Africa offers strong potential for long-term returns, as seen in the automotive sector where early entrants built lasting operations. With vast unused arable land, agritech holds major promise. Carbon credits, still emerging, are a key area where policy frameworks are being developed.

South Africa offers strong potential for agricultural investment, with ample local partners like African Pioneer Group, which I represent. We’ve also expanded into alternative energy. I serve on the board of Coega Development Corporation, a Special Economic Zone (SEZ) based in the coastal town of Gqeberha (formerly Port Elizabeth). Among its targeted investments are Aquafarming, Biofuels and Green Energy.

South Africa offers strong growth potential, especially in agriculture, with government support for international investment. However, addressing historical inequalities is key to sustainable development. A level playing field ensures long-term, shared value. Existing partnerships with Argentina and Uruguay are progressing, and we welcome new collaborations, grounded in a clear understanding of the local context.'

Leadership and Talent Priorities for Sector Growth and Investment

Hemendra Mathur focuses on three key traits when evaluating talent for start-up investments in agriculture. 'First, founders or top management must spend time in villages, typically at least one week per month, to understand real problems, as remote solutions often miss the mark.

Second, they must attract diverse, high-quality talent across disciplines like data science, AI/ML, agronomy, hydrology, meteorology and veterinary science, since no single person covers all areas.

Finally, ethics, governance and integrity are non-negotiable; poor governance is a common cause of failure.

Despite India’s large population, finding the right talent is challenging and requires a strong local network.'

Sakhiwo Glen Zamisa acknowledges South Africa’s strength in developing business leadership, supported by many international companies nurturing general and executive managers. 'For example, German firms like Volkswagen recruit and train talent who then advance globally, creating a steady leadership pipeline.

In agriculture, however, there is greater demand for specialists in areas like regenerative farming and carbon credits. Investment requires professionals who can connect global players with local stakeholders to adapt advanced practices locally.

Mature industries have no shortage of well-rounded leaders, supported by strong business schools focused on governance and management. Yet, talent from outside South Africa must understand the local context to apply their skills effectively.

In conclusion, South Africa needs more specialists in alternative energy and water scarcity. With 84% of water used in agriculture, expertise in water conservation, harvesting, energy efficiency and green technologies is critical to addressing these challenges.'

Summary

Private capital is reshaping sustainable agribusiness worldwide by driving innovation, addressing regional challenges and fostering strong partnerships. Success depends on long-term vision, skilled talent and collaboration among investors, businesses and policymakers to build resilient, impactful food systems for the future. With growing global pressures, investing responsibly in agritech and biosolutions is not only smart business but essential for food security and environmental sustainability.

The Kestria Agribusiness & Agriscience Global Practice Group is a strategic partner for organisations transforming food systems and advancing sustainable agriculture worldwide. Our expert consultants combine deep agribusiness knowledge with global reach to identify visionary leaders who drive innovation and resilient growth. We connect clients with skilled talent committed to balancing profitability with social and environmental impact, empowering them to build the future of agritech, biosolutions and responsible investment.