Start-ups in the agri-food tech space raised $19.8 billion in venture funding across 1,858 deals in 2019 and generated 250% in funding growth over the past five years, said the 2019 Agri-FoodTech Investing Report.
AgFunder, a Silicon Valley venture capital platform that invests in “technologies to rapidly transform our food and agriculture system,” issued the report.
Start-ups involved in genetic, microbiome, breeding and animal health innovations made up 6% of the agtech deals, while advances in farm management software, sensing and Internet of Things generated 5% of the deals in 2019. eGrocer had the largest percentage of the deals at 20%.
Clear positives for 2019
Although there was a 4.8% decline year-over-year (YOY) in U.S. dollar terms and a 15% reduction in the number of deals in 2019 versus 2018, the report did note several clear positives:
- There was a 1.3% increase in funding for start-ups that operated upstream (on farms or along the supply chain). These start-ups raised $7.6 billion, the highest level during the second half of the year on record. Alternative proteins and vertical farming drove much of this growth, the report noted.
- Investment in several new and diverse agtech food start-ups categories grew significantly in 2019, a break from general venture capitalist trends. These categories included meat alternatives, indoor farming, robotic food delivery and cloud or ghost kitchens.
- The report flagged the meal delivery space as “oversaturated” and investments in this area declined 56% YOY.
- European funding nearly doubled, resulting in 94% more funding for agtech in 2019 than the previous year.
- Latin America had a standout year, raising more than $1.4 billion in food production innovations – more than the region’s whole venture capital industry raised in 2017.
- California dominated the U.S. ecosystem. Start-ups in this space raised more than all of the other U.S. states combined.
“The need for agrifood tech innovation is greater than ever. This creates many opportunities for entrepreneurs and technologists to disrupt the industry and create new efficiencies at various points in the supply chain,” the report said.
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