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Saturday 25 June 2022

Foodtech venture investment jumps to $24bn in 2020 – report

30th April 2021 By Paul Yandall | | @foodtickernz

Global foodtech venture investment hit US$17.3bn (NZ$23.9bn) in 2020, up from US$10bn in 2019, according to investment firm Finistere Ventures and PitchBook Data.

Around 8,000 unique investors took part in more than 9,000 transactions in 2020. Image: GoodEggs

The partners’ 2020 Agrifood Tech Investment Review found that another US$5bn was deployed into agtech, up from US$2.5bn a year earlier.

That took the total agrifood investment in 2020 to US$22.3bn, almost doubling 2019’s US$12.5bn.

Finistere Ventures co-founder and partner Arama Kukutai said the Covid-19 pandemic not only sparked a rush from investors to support their existing portfolios, it also accelerated fundraising efforts for startups. 

“We saw fear turn into fear of missing out (FOMO) with favourable results for startups, particularly those in later stage situations with meaningful revenue and strong growth stories,” Kukutai said in a statement.

“Low interest rates and a soaring equity market have provided a backdrop unseen in the relatively short history of the sector.”

The analysis showed there were 8,054 unique investors participating across more than 9,000 transactions in the agrifood space in 2020. That was comprised of 631 funding rounds for foodtech and 416 rounds for agtech.

Foodtech investments included deployments into alternative proteins and novel ingredients, food delivery and meal kits, e-commerce, and supply chain and consumer tech.

The report stated that alternative proteins enjoyed a “heady rise, with valuations in the stratosphere, even at early stages of company development”. 

“The successes of market leaders such as Beyond Meat and Impossible Foods are being followed by the move of cultured meat and precision fermentation technologies that are hunting for a share of the trillion-dollar-plus global protein markets.” 

On the farm and supply side, interest in indoor-ag “spiked” in 2020, driven by supply chain and sustainability factors, as well as a growing consumer preference for local and fresh produce with superior taste and quality. 

“In early 2021, we saw the first of what will likely be a wave of special purpose acquisition company (SPAC) listings for agrifood companies. The ecosystem has expanded considerably to more than 300 startups participating in the indoor ag ‘land grab’; this is expected to accelerate considerably in 2021.” 

The analysis also showed that new or non-traditional investors were entering or increasing their exposure to agrifood with growing activity from family offices, large pension funds, sovereign wealth groups, and late-stage private equity.

“[There] is strong indication that the race for innovation access is heating up and creating an exciting stage for agrifood investing as we move into the next decade of investment in 2021 and beyond,” said the report.

An estimated US$46bn was raised through market exits, led by food delivery ventures Deliveroo and DoorDash, with Oatly preparing to go public this year, possibly followed by Impossible Foods.

Download the 2020 Agrifood Tech Investment Review here.



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