The current cautious mood among agtech investors is evident. Summing up the atmosphere at the recent World Agri-Tech Innovation Summit in San Francisco (where she spoke on a panel discussion) there are “clearly” liquidity concerns relating to funding early-stage companies, Rohr tells AgTechNavigator.
Venture capitalists are not battening the hatches just yet. But while they are still prepared to take on capital intensive start-ups (an encouraging sign they are not shying away from potentially risky but high-reward opportunities), founders need to display a clear plan to scalability and profitability to potential backers, Rohr says.
Diversifying funding sources and adopting realistic scaling timelines, she adds, are also becoming more crucial for start-ups in the current climate to ensure long-term impact and success. Ultimately, she believes we are moving into a period of more reasonable valuations, with investors laser-focussed on unit economics. “As they look to de-risk investments, investors want a deep understanding of the capital efficiency and the path to commercial scale.”
New identity
S2G Investments – one of the most active firms in the agtech space with Sound Agriculture and EarthOptics among the start-ups it supports – is a multi-stage investment firm targeting venture and growth-stage companies in food and agriculture, oceans, and energy sectors.
At the start of 2025 it changed its name from S2G Ventures to S2G Investments. It says the shift from ‘Ventures’ to ‘Investments’ better represents its expanded scope beyond early-stage bets to include later-stage, asset-heavy opportunities.
While the rebranding was not a direct response to the impact of the investment downturn, S2G’s multi-sector strategy across different classes puts it an advantage amid the current VC drought, Rohr believes.
S2G’s capital-structure agility, for example, spans venture funding, growth equity, debt, and infrastructure financing. This flexibility could be critical for scaling solutions in capital-intensive sectors such as sustainable agriculture and clean energy, where traditional VC models often fall short.
“S2G Investments is really a reflection of the work that we are doing today,” Rohr explains. “Historically we have invested in both venture and growth, and we wanted to ensure this piece of growth strategy is also reflected in our name.”
As part of the rebrand, S2G unveiled a new tagline, ‘Invested at the Seams of Sector Transition’. “This is also reflective of the various verticals that we invest,” Rohr says, “and it really serves to underscore the importance of interconnected sectors and asset classes. We think that brings differentiation in terms of ability to anticipate market trends, manage risk, and value-added partnerships.”
The rebrand also reflects its growth. S2G Investments now manages $2.5 billion in committed capital and boasts a portfolio of over 100 companies worldwide.
With nearly 14 years of experience in sourcing, executing, managing, and exiting venture and private equity investments, Rohr leads S2G’s initiatives in agriculture, genetics, crop protection, and digital/IoT sectors.
“We’re noticing a ‘yes, and?’ approach to the VC model”
The firm is currently focussed on making new investments in venture and growth. “Our strategy across the food and ag system has been to invest across five different areas including ag technology and products; digitisation; resilient supply chains; consumer brands and food as health,” reveals Rohr.
She remains impressed by the calibre of founders. “They are working on very hard problems. Their energy and enthusiasm continues to be very strong.”
But what has changed are attitudes to VC – specifically the question of whether the traditional VC model’s focus on rapid growth and quick returns is at odds with the often slower, longer-term nature of agriculture.
“We’re noticing a ‘yes, and?’ approach to the VC model,” she says, suggesting that founders recognise they need other forms of capital and other strategies alongside venture to scale.
The longer-term nature of agriculture needs to be very clearly understood by investors and companies, Rohr stresses.
“The food system is built for scale and efficiency. That means commercialising a new product or a technology just takes time.”
She therefore thinks it makes sense for start-ups to bring in forms of longer-term lower-cost capital alongside traditional VC to scale. “Building markets and infrastructure from scratch is very expensive – no matter how much capital has been raised,” she points out.
Alongside building a compelling product or technology, she believes the onus is on start-ups to focus at the earliest possible stage on factors such as product-market fit, unit economics, the grower’s ROI, and on forming partnerships with companies that offer industry expertise and depth.
“It’s important to understand at an early stage what business model gives the ability for the company to be self-sustaining,” she says.
By way of an example is S2G’s recent investment in Exacto, an enabling system for crop health and crop protection offerings across all segments, including biologicals, fertilisers, seed treatments, and soil enhancement solutions.
“What’s interesting to us is a lot of its innovation pipeline is focussed on formulation technology that boosts the performance of biological products,” explains Rohr.
“We’re excited because they are very focussed on serving the grower. They have a collaborative innovation approach particularly with their customers in ag retail. They have the potential to improve some of the characteristics where the biologicals sector is struggling.”
Is food and ag a unicorn investment?
Record low exits are another pressing challenge for VC investors. Reduced exit activity is creating a backlog of un-exited companies, making it harder for investors to realise returns and potentially impacting future fundraising.
Rohr’s advice to companies is to get as close as possible to commercial readiness. “Clear milestones in terms of product development is something a lot of investors get behind.”
This brings up the question of what exits look like for VC investors in the current climate. Should they still be chasing the ‘home runs’ and the very high-return investments in the form of IPOs, or just look for the ‘runs’ – the more consistent, small, steady gains offered by M&As?
“I think it really depends on the type of product and technology,” Rohr responds. “There are definitely categories of our companies that we expect to underwrite to an M&A exit but there are some in our portfolio where an IPO is still possible. That’s a reflection of the work we are doing in early and later stage across the food system.”
