Data Snapshot is a regular AFN feature in which we analyze agrifoodtech market investment data provided by our parent company, AgFunder.
Global venture funding across all sectors reached an all-time high in FY 2021, hitting $643 billion in total – nearly double FY 2020’s $335 billion and 10x the total a decade ago, according to Crunchbase.
Looking specifically at agtech and foodtech, the doubling trend was pretty much the same: AgFunder’s latest annual Agrifoodtech Investment Report recorded $51.7 billion in total worldwide venture funding for startups in these segments in FY 2021, up 85% from $27.8 billion in FY 2020.
Inputting both figures, agrifoodtech ventures secured just over 8% of total VC funding in FY 2021 – a few points shy of the 8.3% share it enjoyed in FY 2020.
Global venture funding (all sectors) 2012-2021
Agrifoodtech’s share grows over time
Back in 2012, total VC funding across all industries fell just shy of $59 billion.
Also in 2012 — which happened to be the first year for which AgFunder began collecting data — total agrifoodtech venture funding stood at $3.1 billion.
That’s just 5.25% of overall VC investment, compared to over 8% today – indicating how agtech and foodtech have increasingly gained investor interest over the past decade.
All categories within agrifoodtech posted investment gains in FY 2021. The AgFunder-defined eGrocery category raised the most of all, registering 188% year-on-year (YOY) growth thanks largely to four 10-figure rounds.
The fastest-growing categories outside of eGrocery were Innovative Food (103% YOY growth), Online Restaurants & Mealkits (102%), and Cloud Retail Infrastructure (97.5%). Growth in these sectors was in large part driven by consumer and investor responses to the Covid-19 pandemic, as society sought ‘contactless’ solutions to grocery shopping and convenient dining – as well as alternate options amid stricken supply chains and concerns about zoonotic disease.
Global venture funding (agrifoodtech) 2012-2021
Slowdown on the horizon?
But Q1 2022 data from Crunchbase and other sources suggest that the wheels may be beginning to fall off the VC merry-go-round.
The first three months of this year saw VCs invest a total of $160 billion across ventures in all sectors. That’s still a tidy sum, to say the least — and is actually 7% higher than what was raised in Q1 a year earlier — but it represented a 13% decrease on the previous quarter (Q4 2021 – which at $184 billion was, to be clear, the biggest-ever quarter for VC funding on record.)
That’s the first time in at least two years that VC funding has dropped quarter-over-quarter.
Will the same trend play out in agrifoodtech?