72% less investments in FoodTech startups in two years, but a bounce back is in sight

FoodTech startups raised $15.1B in 2023, 48% less than in 2022 and an impressive 72% decrease from the highs of 2021. However, for the first half of 2024, FoodTech startups have already raised $7.9B, showing the first hint of a bounce back.

Investments in delivery startups have long been the cornerstone of the FoodTech ecosystem, accounting for up to 74% of all funding. In 2023, however, it reached a low point, with only 21% of the money invested in FoodTech startups going to delivery players. While we observe both a relative and absolute bounce back in 2024, it is mainly driven by a handful of players raising massive amounts of money. In the meantime, the share of investments in upstream and midstream startups has increased beyond 50%, notably for AgTech startups focused on sustainability and for Food Science startups.

Seed investments have decreased dramatically in the first half of 2024. While early-stage (seed and Series A) investments remained comparatively strong during 2022 and 2023, they are now to be severely affected. The funding strength observed in early 2024 was indeed due to late-stage deals. This is only a point of attention, but it could become worrying if it continues, as early-stage investments are fundamental in developing a healthy ecosystem.

Beyond investments, we also currently observe a surge in partnerships announced between startups and leading companies, notably for AgTech and Food Science startups. Delivering value through these deals could be fundamental to creating a new cycle of trust and investment growth in FoodTech.