I am glad to share our first global FoodTech investment report with you. Since we started DigitalFoodLab, we primarily focused on European investments, but since covid, it felt increasingly urgent to have a global perspective. We initially did it with quarterly overviews of the state of the global FoodTech ecosystem, which led to this report. A big thank you to all of you who have read our reports and supported us along the way.
This report focuses on investments in FoodTech startups from 2014 to the first half of 2024, with specific attention to the last 18 months and what they can tell us about the evolution of the agrifood innovation ecosystem. Let’s look at four of the main learnings for the report.
You can download the full report here
Key learning #1: a 72% decline in funding between 2021 and 2023
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 following our projection.
Key learning #2: seed investments have decreased dramatically in the first half of 2024
While we have been in a plateau in terms of investments for the past seven quarters, the distribution is still evolving, and maybe not in the right direction. As you can see on the graph below depicting the evolution of the “funnel” of investments between 2022, 2023 and H1 2024:
- late-stage deals are at a surprisingly high-level for H1 2024 (in six months, they almost reached the total amount raised in 2023).
- early-stage deals, and more specifically seed investments have sunk to a bottom low with less than $0.7B invested in H1 2024 compared to $2B in 2023.
This is only a point of attention for now, but if the situation remained the same (declining investments in early-stage and concentration in later stages), this would not be good news for the FoodTech ecosystem as a whole. Indeed early-stage investments are fundamental to enable the emergence of a strong and healthy ecosystem.
Key learning #3: a growing emphasis on upstream and midstream technologies
Below is the graph with the distribution of investments by categories (see here for the definition of all FoodTech categories). While FoodTech was almost a synonym for delivery startups a decade ago, things have changed progressively. Now delivery accounts for less than a quarter of the total funding and more importantly new categories have emerged, notably upstream (AgTech) and mid-stream (Food Science with both new brands and alternative proteins).
Key learning #4: the emergence of the European ecosystem and the relative decline of Asian FoodTech ecosystems
The previous learning (an evolution away from delivery) also translates in the distribution in terms of regions. Indeed, Asia which was once leading FoodTech for investments has declined in terms of share of investments as delivery lost its prime. It appears that Asian ecosystems, once heavily focused on restaurant delivery have moved to grocery delivery but are still lagging behind in terms of investments in new FoodTech “hot topics” such as sustainable agriculture, new food products and alternative proteins.
At the opposite, we can also read this as the emergence on the global scene of the European FoodTech ecosystem which year after year, and even in the current gloomy context, is consolidating its place.
Let us know if you have any questions about the report or suggestions on how to make it better for next year’s edition.
