Data Snapshot is a regular AFN feature in which we analyze agrifoodtech market investment data provided by our parent company, AgFunder.
Earlier this month, AFN‘s Data Snapshot analyzed agrifoodtech venture funding in 2021 within the context of broader VC investment trends.
Based on data from AgFunder and Crunchbase, agrifoodtech funding on a global scale accounted for around 8% of overall VC funding last year.
But how does that compare to the agrifood ecosystem’s contribution to overall economic output?
Let’s take a look at the US specifically, since there is a wealth of data from that country and its government is able to provide generally dependable estimates for things like 2021 GDP (which is a lagging indicator, hence the need to use estimates at this point in the year.)
And, of course, it’s by far the single largest market when it comes to agrifoodtech funding.
According to AgFunder’s recently published 2022 Agrifoodtech Investment Report, total agrifoodtech funding in the US more than doubled year-over-year, from $13.2 billion in FY 2020 to $21 billion in FY 2021.
Meanwhile, Pitchbook reports that US startups overall raised a total of $330 billion in VC funding during 2021. Agrifoodtech’s $21 billion total is over 6% of that:
|US total agrifoodtech venture funding, 2021||$21 billion|
|US agrifoodtech funding as a percentage of total venture funding, 2021||6.36%|
Now let’s consider food and agriculture’s contribution to US GDP.
Estimated GDP and industry figures below are taken from the US government’s Bureau of Economic Analysis (BEA) and Department of Agriculture Economic Research Service (ERS).
Note that we use nominal GDP (called ‘current-dollar GDP’ by the BEA) as it enables a more direct comparison in US dollar values:
|US nominal GDP, 2021||$23 trillion|
|Agriculture, food, and related industries* contribution to US nominal GDP, 2021||5%
There are no solid conclusions or insights to be drawn here, though it’s still an interesting exercise in comparison. For what it’s worth, US agrifoodtech funding stood at 0.09% of US nominal GDP in 2021; while the year-on-year increase in agrifoodtech funding far exceeded nominal GDP growth in the country:
|Increase in US nominal GDP, 2020-2021||10.1%
|Increase in US agrifoodtech funding, 2020-2021||59.1%|
* According to the ERS, ‘agriculture, food, and related industries’ includes: farm output; food and beverage manufacturing; food and beverage stores; foodservice; agrifood-related textiles, apparel, and leather products; forestry; and fishing.
** Much FY 2021 data is not yet available, so AFN has used ERS figures for FY 2020 — which indicate that ‘agriculture, food, and related industries’ were responsible for 5% of total US GDP in FY 2020 — to come up with an approximation. So 5% of FY 2021’s total GDP ($23 trillion) is $1.15 trillion.