Each week, I write and publish AFN‘s Week in Agrifoodtech feature. For those not familiar, these are news roundups of the biggest stories in agrifoodtech from around the web each week — from fundraises to industry developments and sometimes delightfully bizarre initiatives.
Last year, 2021, was a banner year for agrifoodtech. Startups raised a record $52 billion as agrifoodtech’s importance in the news followed a smooth upward trajectory.
But when we finally tally up the numbers for 2022 for AgFunder’s global agrifoodtech investment report, they’ll probably be more akin to a rickety wooden roller coaster, where holding on for dear life is paramount. [Disclosure: AgFunder is AFN’s parent company.]
Since seeing is believing, nothing illustrated the downturn’s impact on agrifoodtech better than the act of rounding up the news each week to watch the rising and falling (and sometimes rising again) of different industries.
What follows are a few of my observations from these roundups.
Please note these are observations only, rather than an exhaustive, data-intensive list. If you have thoughts on agrifoodtech trends you don’t see here, drop me a line and let me know.
Foodtech deals got fewer and smaller
This one seems obvious given the state of the world. Agtech saw fewer deals, too, but the drop was more pronounced for foodtech.
This is probably because the bulk of funding early in 2022 went downstream. The year began with one mega-round after another, much of it for restaurant food delivery, grocery delivery and other consumer-facing parts of the supply chain.
Consider this list, from a Jan. 13 roundup:
Enter war in Ukraine, continued supply chain problems, climate disasters and inflation. By Nov. 10, the foodtech weekly roundup looked like this:
However, much of what’s available right now in terms of funding has swam upstream. As the foodtech section of the roundup grew smaller, agtech often got bigger. The bulk of agtech deals continue to be early stage, but there’s a distinct interest in climate-related agtech startups.
Grocery delivery growth dropped
If there’s one story we’ve told ad infinitum this year, it’s the one about grocery delivery’s extreme nosedive.
Getir, Jüsto, BigBasket, Zepto. All of these companies raised well above $100 million in early 2022. Getir, for example, secured a whopping $768 Series E, on the heels of Gorillas’ $950 million round from late 2021.
The downturn fell swift and hard onto this sector partway through 2022. Here’s a small sampling of news roundup entries from May onwards:
- “Instant” grocery startups Getir, Zapp, and Gorillas announce staffing cuts.
- Instant grocery delivery startup Jokr will exit the US.
- ‘Instant delivery’ service GoPuff cuts 10% of its workforce and closes 76 warehouses.
- Getir is in talks to acquire its rapid delivery rival Gorillas.
Layoffs grew relentless
Most reading this are all too familiar with 2022’s tech layoffs. Agrifoodtech was no exception, and as early as July, roundup entries were starting to look like this:
It wasn’t all bad news for CEA
Some recent closures and a drop in funding have some questioning the long-term viability of controlled environment agriculture (CEA), and vertical farming in particular.
However, the funding has by no means dried up. Canada’s GoodLeaf Farms just raised $150 million, following Soli Organic’s $125 million raise from Oct. Companies this year also created a Vertical Farming Manifesto to set standards for the sector.
In all likelihood, indoor farming will see more closures and corrections in 2023, but also more honest discussions around where it can make the most impact in our food system.
Ones to watch
Speaking of market correction, plant-based meat will likely see some of that in 2023. Cultivated meat, on the other hand, saw several positive developments in 2022, including Upside Foods getting FDA approval and Biden backing cultivated meat.
Finally, based on writing a year’s worth of news roundups, it’s safe to say we’ll see much, much more on the merits and challenges of carbon farming/markets, regenerative agriculture, and climate tech in general.