Agrifood investments reach all-time high in COVID-19 era

Ag-tech and foodtech investments totaled $2.2 billion and $4.8 billion respectively during the first two quarters of 2020, a time period of great uncertainty for both start-ups and venture capitalists due to the COVID-19 global pandemic, according to a new report from agrifood venture pioneer Finistere Ventures.

Doughman Headshot3 Headshot
Mariusz Blach | Fotolia.com
Mariusz Blach | Fotolia.com

Ag-tech and foodtech investments totaled $2.2 billion and $4.8 billion respectively during the first two quarters of 2020, a time period of great uncertainty for both start-ups and venture capitalists due to the COVID-19 global pandemic, according to a new report from agrifood venture pioneer Finistere Ventures.

The numbers for both sectors rival the record-setting amounts raised in the entirety of 2019. That year, ag-tech investments reached $2.7 billion and foodtech investments skyrocketed to $7 billion.

Developed in partnership with financial data and software company PitchBook Data, the mid-year report covers and analyzes global financing activity across the ag-tech and foodtech industries.

The rise of animal tech

Animal tech emerged as an important new ag-tech category, capturing approximately 7% of funding in the first two quarters of 2020. Continued growth is likely.

This sub-segment includes technologies and innovations designed to improve the sustainability of animal husbandry, including the reduction of antibiotic use, improvements in feed conversion and more.

“While the start of the year provided a massive infusion of capital, ag-tech companies are likely to face a turbulent outlook for 2021. With farming margins already under pressure prior to COVID-19, the availability, cost and health of labor, trade conflicts and consumer/voter pressure for sustainability gains all pose meaningful headwinds,” Arama Kukutai,co-founder and partner at Finistere Ventures, said in a statement.

“The venture investment consequence is likely to be that startups in this space are under a double imperative -- to prove their return on investment to farmers and their agronomists that they are essential and will help drive better on-farm profit, while also showing they can scale to profitability.”

Meal kits & delivery, alternative proteins and ecommerce

Investments in meal kits and delivery start-ups continued to lead the foodtech sector in the mid-year report.

Alternative proteins – including plant-based proteins and cellular agriculture – captured 22.6% of foodtech funding, displacing ecommerce for the second-place spot. Investments in alternative meats reached $930 million in the first quarter of 2020, an 11% increase over all of the funding in 2019.

“The foodtech sector, while challenged in foodservice, has some promising tailwinds. In particular, meal solutions and e-commerce grocery startups are benefiting from the move to dining at home. We expect there will be lasting and persistent changes to consumer behavior in at-home consumption; retaining these customers and growing margins will be key to future funding rounds," added Kukutai.

View our continuing coverage of the coronavirus/COVID-19 pandemic.

Like what you just read? Sign up now for free to receive the Poultry Future Newsletter.

Page 1 of 84
Next Page