Global venture capital fund AgFunder today released its 2019 Agri-FoodTech Investing Report, which gives a birds-eye view of the investment landscape in agriculture and foodtech (also known as agri-foodtech) companies over the past year.
Overall, it was a pretty fortuitous year for startups in the space. According to AgFunder’s report, agri-foodtech companies raised a total of $19.8 billion last year. That’s a 4.8 percent drop in funding from 2018 (a blip which the report pins on the US-China trade war and Brexit), but the industry still experienced roughly 250 percent growth over the past five years.
A few areas in particular enjoyed some hefty investment last year: meat alternatives, robotic food delivery, indoor farming, and cloud kitchens. If you’re a regular Spoon visitor, that probably won’t surprise you; we’ve been reporting on the growth of these industries extensively over the past year (plant-based meat and cloud kitchens, in particular).
One foodtech area that AgFunder reports did not see an increase in investor interest, however, was meal delivery. Quite the opposite, actually. AgFunder notes that investment in consumer food delivery declined 56 percent year-over-year as the market became oversaturated. The growing controversy over third-party delivery could also have something to do with it.
As investment in agri-foodtech grows and diversifies, so too does the investor pool itself. AgFunder’s report notes “more generalist, big global players and corps,” are flocking to agtech and foodtech startups, including giants like SoftBank, Amazon, and Microsoft.
There’s also a geographical expansion. Led by record interest from U.K., funding in European agri-foodtech companies nearly doubled in 2019. Latin America also had what AgFunder dubbed a “breakout year,” raising $1.4 billion for the sector. Unsurprisingly California still led in the U.S. (thanks, Silicon Valley).
Of course, we have to take the report with a grain of salt. As a venture fund itself, AgFunder obviously has reason to make its chosen area look like a white-hot space. Nonetheless, I think it’s fair to say that agtech and foodtech are indeed entering the mainstream — and attracting due investor attention.
2019 saw “far out” technologies like cell-based meat and drone food delivery, become… well, not mainstream, but at least less far-fetched. As they continue to mature — and fight through regulatory red tape to actually hit the market — I’m betting that we will see investments in the agri-foodtech continue on their upward trajectory.