Like many segments across the venture investment landscape, the food tech sector has seen a significant pullback in investment over the past couple of years. However, according to a new report from Pitchbook, there are early signs that investors who have kept on the sidelines may slowly be pushing their chips back on the table.
According to Pitchbook’s Q2 2023 food tech investment segment analysis, total food tech deals for Q2 increased over the previous quarter by 13.3% to 268 total deals, up from 197 deals in the first quarter of 2023. Total deal value was down just a smidge, dropping to $2.2 billion in Q2 2023 from $2.3 billion in the first quarter.
The Pitchbook report states that the uptick in total deals in Q2 could be an early sign of a potential return of investors to the sector. According to the report, there are indicators that investors have “significant dry powder reserves and may be slowly returning from the sidelines to resume deploying capital.”
Looking at how the Pitchbook analysis breaks down the food tech sector by segment, the biggest overall sector in Q2 was food e-commerce, which accounted for over $1 billion in Q2. According to Pitchbook, food tech e-commerce deal values were driven by late-stage investment in companies like Getir, which nabbed a $475 deal in 1H 2023. Other big deals of note in the first half included a $230 million deal in meal replacement startup Yfood (a deal which had Nestle acquiring a majority ownership stake in the company) and a $172M series C investment in alt protein startup Meati.
Speaking of alt protein, the Pitchbook analysis is somewhat bullish on the sector, predicting that the global alt protein market will grow from $76 billion in 2023 to $423 billion in 2033, a compound annual growth rate of 19%.
If you want to read the Pitchbook report, you can download a copy here.
