AgFunder says agrifoodtech startups raised US$26.1 billion in 2020, up 15.5 per cent on last year.new report by venture capital firm
It expects the figure to rise to more than $30 billion as more 2020 deals are uncovered – showing growth of 34.5 per cent.
The 2021 AgriFoodTech Investment report says the sector is no longer an early-stage industry, adding “now is the time to invest.”
The forward by Louisa Burwood-Taylor, head of media and research, said, “Much of the increase was down to significant growth in late-stage deals, where investors doubled down on their portfolio and the first-wave of agrifoodtech innovations.” Impossible Foods’ $500 million and $200 million rounds was a case in point.
She said, “Covid-19 has highlighted the importance of efficient supply chains and alternative ways of growing, processing, transporting and selling food to consumers.
Investment in innovative food doubled to $2.3 billion
“Innovations in the midstream – between farmer and retailer – got a much-needed investment boost.
“Food delivery gained new ground, especially eGrocery, and we saw more investment activity in Cloud Retail technologies supporting at-home dining.
“Trends towards food alternatives, particularly in the protein space, continued unabated.”
It found investment in innovative food doubled to $2.3 billion, driven by alternative protein startups as consumers increasingly questioned the provenance of their food.
The report said:
- Midstream tech companies raised $5.3 billion and closed 30 per cent more deals.
- Ag biotech lost market share but nevertheless raised $1.6 billion, a 60% increase dominated by gene editing tech.
- eGrocery startups raised $5.1 billion as several companies raised multiple rounds during the year to support the aggressive demand brought on by the pandemic.
Looking to the future, the report predicts:
- Animal agriculture will shift toward regenerative practices, carbon neutrality and premium offerings, as plant-based products become more price-competitive and mainstream.
- Dairy will retain a strong footing as farms work toward carbon neutrality.
- In emerging markets, animal proteins will remain dominant (though consumed in significantly smaller quantities than developed markets), owing to price and traditional farming practices.