Led by the United States, global agri-food technology investment grew 43% year-over-year in 2018 to reach $16.9 billion, according to a recent report from AgFunder. Funding to startups from the farm to food processing accounted for $6.9 billion, while the retail sectors of grocery, restaurant, food delivery, and home & cooking attracted $10 billion in investment.
“Broadly speaking, agri-food tech startups are primarily aiming to solve the following challenges: food waste, C02 emissions, chemical residues and run-off, drought, labor shortages, health and sugar consumption, opaque supply chains and distribution inefficiencies, food safety and traceability, farm efficiency and profitability, and unsustainable meat production,” stated the AgFunder report.
Leading Agri-food Sectors
Foodservice delivery-focused startups led all agri-food sectors with investments of $3.9 billion, followed by e-grocery startups at 3.6 billion, and in-store retail & restaurant tech at $1.7 billion. Gene-editing startups drove much of the 50% increase in ag biotech investment, which reached $1.5 billion. Midstream technology startups, which include food safety & traceability tech, logistics & transport, and processing tech, garnered $1.3 billion in funding, noted AgFunder.
Funding for farm management software, sensing, and IOT jumped 65% to reach $945 million, while agribusiness marketplace startups—representing commodities trading platforms, online input procurement, and equipment leasing—rose 58% to $852 million. Online restaurants & meal kit startups saw funding gains of 45% to $752 million.
Bioenergy & biomaterials startups attracted $701 million, a 116% increase over 2017. Novel farming systems, such as indoor farms, aquaculture, insect, and algae production, decreased 9% to $596 million. Innovative food startups (e.g., cultured meat, novel ingredients, and plant-based proteins) saw funding drop 2% to $516 million. Robotics, mechanization & other farm equipment startups were up 56% to $368 million. Home & cooking startups, which include smart kitchen appliances, nutrition technologies, and food testing devices, attracted investments of $130 million—an 18% increase over 2017.
The U.S. is the global leader in agri-food investment, tallying $7.9 billion in 2018, according to AgFunder. The state of California alone accounted for $5 billion. Other top-investment states include Massachusetts ($799 million), New York ($539 million), North Carolina ($414 million), Colorado ($296 million), Illinois ($182 million), and Florida ($92 million).
Globally, China came in second with $3.5 billion in funding across 184 deals. India was the third largest agri-food tech investor with $2.4 billion—a 280% increase over 2017. Brazil recorded its highest ever investment total at over $700 million despite a 50% drop in the number of deals funded. The UK saw a 43% drop in investment dollars ($285 million) on identical deal numbers to 2017, while France doubled its investment total to $222 million on 16% fewer deals. Investment levels in Israel declined by 26% to $185.5 million.
Singapore led the ASEAN region, recording $84 million of agri-food tech investment last year, an 82% year-over-year jump, reported AgFunder. Australia and Ireland recorded marginal increases to $29 million and $79 million, respectively. New countries entering the agri-food tech investment arena for the first time were Albania, Romania, Serbia, and Zambia.
Funding by Stages
Growth in agri-food tech funding was greatest at the Series C stage, where it increased 84% to reach $2.6 billion. The number of Series C deals also increased to 60 from 47. While there were fewer Series D rounds in 2018, the stage raised 76% more funding year-over-year to reach $3.6 billion. Series A stage funding was static—increasing by 1% to $2.3 billion. Series B funding dropped 27.9% year-over-year to $1.68 billion, and the deal count fell 11% to 119. Late-stage funding jumped 83.9% to $5.7 billion, and deals increased 15%.
Seed stage funding expanded 49% to $685 million in 2018. Most of the seed stage funding occurred at the agricultural end.
To obtain a free copy of the 60-page AgFunder report, please visit https://agfunder.com/research/agrifood-tech-investing-report-2018.
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