European agri-tech businesses are reaching maturity, which is driving M&A activity in the space, dealmakers told Mergermarket.

Capital is flowing into the sector, which is helping valuation multiples, Dominic Emery, partner & managing director at William Blair, said.

“There has been a material uptick in understanding of the sector more broadly within the investor community and the sector is a high priority on the agenda of increasingly large investment funds in Europe for 2025,” Emery said.

An example of a sponsor-backed deal came in January. KKR [NYSE:KKR] and Highland invested in smaXtech, an Austrian monitoring platform for dairy cows, in mid-January. The platform enables early disease detection, monitors fertility with heat detection and reduces birth-related complication.

The platform was founded in 2009 and now serves dairy farmers across Europe, North America, and Australia & New Zealand. Terms were not disclosed. William Blair advised smaXtech.

European agritech M&A saw record high deal volumes in 2024 with EUR 1.84bn across 11 deals compared to EUR 189.5m across 24 deals last year, according to Mergermarket data. Within Europe, France saw the highest deal activity compared with other countries.

Other deals this year include Hiphen, a France-based plant phenotyping, and crop image analytics solutions provider, which acquired Aurea Imaging’s drone phenotyping activities; and Groupe ISAGRI, a European digital agriculture solutions company, which acquired Sencrop, an ag-tech company specialising in weather and irrigation solutions.

Late adopters

The agricultural sector has been a late adopter of tech and software tools compared with other parts of the economy.

This is partly because some farmers were slow to see the need to digitise; and partly because the cost of some software and digital tech is only now coming down to a level where it attractive for farmers, dealmakers said.

However, regulatory pressure and a decline in costs for technology are driving adoption.

On the regulatory side, Europe is bringing in new rules on the conversion of forest to agricultural and the EU Corporate Sustainability Reporting Directive (CSRD) will apply to 2024 accounts published in 2025. Germany’s supply-chain regulation is already in force. All of them require companies to collect increasing amounts of information.

“Tech and software are a natural solution to collect information about the origin and quality of products to ensure compliance with regulation,” Dominik Schwarz, partner at Verdane, said.

“At the same time, more information about livestock and plants can be used to prevent illnesses or stop illnesses from spreading,“ Schwarz said, adding that tech can protect margins and raise yields.

In late 2024, Verdane acquired Cropster, an Austrian-headquartered software platform for the entire value chain of the coffee industry. Its software can be used to navigate the EU’s deforestation regulation, for example.

Maturity

Agri-tech has a mix of technologies in terms of market maturity, which creates opportunities for private equity (PE) investors interested in buy-and-build strategies, as well as for other consolidators.

Some areas, like planting and harvesting, as well as irrigation and logistics, are already relatively mature, whereas other areas, like the use of pharmaceutical products, are still in their infancy, dealmakers said.

Innoterra, a Swiss-Indian agri-tech firm, which was founded in 2020, began in the logistics and supply chains space with tools like InnoDairy, a platform for managing logistics and dairy quality. In 2023, it launched Farmlink, a platform connecting the produce of smallholder farmers directly with retailers.

In 2024, the company launched its Bioscience business, which includes a plant vaccine for bananas to treat and protect against a fungal infection as well as the disease-resistant banana variety InnoGreen. It is currently scouting for acquisitions in the sector as consolidation picks up.

Companies with emerging agri-tech to watch include BIOR Biotech, a soil-analysis platform that uses artificial intelligence (AI). Its owner, Slovak research and development (R&D) and engineering company Revol TT Consulting, has mandated KPMG to find a buyer that can launch its product in the market.

Expect to see plenty more consolidation and rollup plays this year and beyond.