Let’s have a look at the current state of the innovation ecosystem using DigitalFoodLab’s latest data. From there, we’ll see what evolutions we can expect for the end of the year.

1- How bad is the situation?

What we observed at the end of the first quarter of this year is now being confirmed: FoodTech funding is declining again. For the first half of 2025, AgriFoodTech startups raised a combined $6.5 billion, which compares to $8.3 billion last year, representing an almost 22% decrease. It goes alongside a 30% decline in the number of deals, primarily affecting early-stage startups. Adjusted for inflation, the FoodTech ecosystem is going back to 2015 levels of funding.

We did not observe any noticeable category evolution. Funding was driven by some megadeals in delivery (Wonder, Blinkit), brands (Olipop, David), and AgTech (Inari, Laxey, 80 acres farms, Halter).

In terms of geographic distribution, and compared to 2024, we observe only two significant evolutions:

• US startups are doing relatively better, confirming the small bounce back observed there in late 2024.
• European FoodTech is not performing well due to an absence of “mega deals” beyond aquaculture, with a relative decline of approximately 6% in its share of FoodTech funding. However, the old continent remains strong in alternative proteins, with most funding for sustainable ingredients concentrated there.

2 – What’s next: FoodTech maturity

To understand where the FoodTech ecosystem is headed, it is essential to place the current situation in context. We are still in what we call the third stage of the FoodTech innovation cycle with:

• Stage #1 – Emergence of the FoodTech Ecosystem: From 2012 in the US and 2014 globally to 2020, funding for AgriFoodTech startups began to emerge and then accelerated, with the appearance of companies in the delivery, plant-based, and agtech sectors.
• Stage #2 – Tech exuberance in 2021 and early 2022, with excessive amounts being invested too quickly, often at unrealistically high valuations in startups that lacked either a technology solid enough to be scaled or a viable business model. This was affecting all tech sectors similarly, with AgriFood startups just riding the wave alongside others.
• Stage #3 – FoodTech rationalisation since 2022 with a steep decrease in funding, many failures and bankruptcies (notably of the startups having raised at unsustainable valuations). While this concerns all “non-AI” tech sectors, this is even stronger in FoodTech due to rising doubts about exits (too few of them), scalability, regulation and time-to-market (for alternative proteins and AgTech innovations).

Understanding the structural challenges facing FoodTech beyond the circumstantial elements that affect all tech ecosystems is quite important if we want to have an idea of what lies ahead. Even with the latest data, I remain quite optimistic. Indeed, if we look at FoodTech’s challenges, we have seen quite a lot of positive updates recently:

• Lack of exits: the far greater number of meaningful partnerships between established companies and startups that have been signed over the past year shows that we could expect an increase in acquisitions of tech-oriented startups in 2 to 5 years.
• Regulation and scalability: in many places, things are finally moving forward on both fronts with more regulatory approvals and an uptick in the number of government plans to support new Food x Biotech technologies (such as the recent European plan of $350M announced this week).

In short, I don’t expect anything flashy with a huge bounce back, but rather a somewhat slow and steady increase in funding, which should begin as soon as the current economic concerns surrounding tariffs calm down. After two very complicated years, the AgriFoodTech ecosystem is much healthier than it was, with hundreds of startups having meaningful value propositions, smarter investors, and more engaged corporations.