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Data snapshot: Ag biotech overtakes downstream categories for British agrifoodtech investment

July 19, 2023

Data Snapshot is a regular AgFunderNews feature in which we analyze agrifoodtech market investment data provided by our parent company, AgFunder.

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Following similar trends in global agrifoodtech investment, much of the recent VC money for food and ag innovation in the UK is starting to swim back upstream.

Over the last 12 months (1 July 2022 – 1 July 2023), UK agrifoodtech startups raised nearly $400 million across 77 deals, according to the latest data from AgFunder.

This is down considerably from the same timeframe one year ago, where British agrifoodtech startups raised $1.6 billion across 202 deals. However, as noted above, the drop is in keeping with macro trends, which have seen agrifoodtech investment dollars dwindle in the face of economic headwinds and an especially bad second half of 2022.

The team at biotech company evonetix. Image credit: evonetix

Top categories by funding amount:

Investors tightening purse streams means much VC money has gone into upstream startups (close to the farm or lab) developing products and services that often have a climate-related angle.

As the intensity of the climate situation increases (literally and figuratively speaking), funding for these types of startups will grow even more important in the next few years.

To that end, Ag Biotechnology was the UK’s top-funded category for the last year, with startups raising $86.3 million, or about 21% of the investment pie.

Two downstream categories — InStore Retail & Restaurant Tech and eGrocery — followed with $75.2 million and $64.8 million, respectively. The high ranking of these two categories are largely thanks to a couple major deals (more below).

Innovative Food ($57 million), Midstream tech ($40 million) and Bioenergy & Biomaterials ($23.3 million) followed.

Ag Biotechnology $86.3m
InStore Retail & Restaurant $75m
eGrocery $65m
Innovative Food $57m
Supply Chain Tech $40m
Bioenergy & Biomaterials $23m
Farm Management $15m
Novel Farming Systems $13m
Online Restaurants/Meal Kits $9m
Home Cooking $8m
Farm Robotics $2m
Ag Marketplaces $1.8m

Top categories by deal size:

By AgFunder-defined categories, Britain’s 77 deals break down as follows:

Instore Retail & Restaurant Tech 10
Farm Management 10
Ag Biotechnology 9
Bioenergy & Biomaterials 9
Innovative Food 9
Midstream Tech 8
eGrocery 6
Home Cooking 5
Online Restaurants & Meal Kits 4
Farm Robotics 3
Novel Farming Systems 2
Restaurant Marketplaces 1
Ag Marketplaces 1
Image credit: Tropic Biosciences

Top UK agrifoodtech deals:

The eGrocery startup Modern Milkman took the top spot with a $60 million Series C raise in late 2022. This deal accounted for the bulk of the eGrocery category over the timeframe. Since the Modern Milkman fundraise, eGrocery has rapidly fallen out of favor with investors.

Another outlier deal came from London-based Finnish fintech startup iwoca, which raised $55 million at the start of 2023. Like Modern Milkman, iwoca’s deal made up the bulk of the Instore Retail & Restaurant tech category, as it’s a fintech platform that services many foodservice businesses.

Ag biotech startup Tropic Biosciences raised a $35 million Series C. This was followed by Soylent wannabe Huel‘s $24 million Series B and another ag biotech startup, evonetix, with its own $24 million Series B.

From there, the bulk of the top rounds were for earlier stage companies — seed or Series A — with a few other late stage rounds scattered woven in along the way.

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