Agrifoodtech startup investment plunges to lowest level in 6 years and just 6% of all VC

• Investment in global agrifoodtech startups reached $15.6 billion in 2023, a 49% year-over-year decline on 2022.?
• In 2023, agrifoodtech represented just 5.5% of all venture capital sector dollars, down from 6.7% in 2022 and 7.6% in 2021.
• Funding to all categories declined except for two: Bioenergy & Biomaterials and Farm Robotics, Mechanization & Equipment.

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The food and agriculture technology market has been badly hit by the current venture capital downturn after posting a 49% year-over-year decline in funding in 2023, reveals a new report from leading agrifoodtech investment and intelligence platform AgFunder.?

To place this in context, venture capital funding across all industry segments fell 38% in 2023, which fell 38% in 2023, according to Crunchbase (Crunchbase), AgFunder’s main data partner. That puts agrifoodtech investment at just 5.5% of all venture capital investment.

That share is at odds with the industry’s contribution to the global economy and livelihoods; the food and agriculture industries contribute at least 15% to global GDP, hire over half of the world’s workforce, and contribute to one-third of greenhouse gas emissions.

The 49% year-over-year funding decline is a result of fewer and smaller deals. The decline in deal activity was less pronounced than dollar investment at 26% year-over-year (and we expect more deals to come to light in the coming months). Average deal sizes were down nearly 30%, year-over-year and 50% on 2021.

Key agrifoodtech investment insights in 2023:

• Agrifoodtech startups raised $15.6 billion globally in 2023, down 49.2% percent from $30.5 billion in 2022.

• Funding to all categories declined with the exception of two: Bioenergy & Biomaterials and Farm Robotics, Mechanization & Equipment.

• Bioenergy & Biomaterials was the biggest category, raking in $3 billion in 2023, up 20% from 2022.?

• Investment in Farm Robotics, Mechanization & Equipment continued its steady upward trajectory of the past five years, increasing 9% year-over-year to $760 million.?

• Funding to upstream startups – those operating on the farm or in food production – accounted for 62% of overall dollar investment in 2023, compared with 51% in 2022 and 30% in 2021.

• No global region was immune to the downturn. Europe felt it less acutely with a 14% year-over-year decline in dollar funding. African investment levels remained higher than 2021 at $260 million in 2023 whereas Asia did not recover its pre-Covid totals with $3.8 billion in 2023.?

• The US was particularly badly hit with its share of agrifoodtech funding ($5.4bn) dropping to just over 30% of global funding in 2023; the country usually counts for at least 40% of global totals.

• Deal count in 2023 was down 26%, reflecting smaller rounds with one or two exceptions.?

• The median deal size decreased 9% year-over-year whereas the average was down 30% on 2022 and 50% on 2021.

• In emerging markets, China and India lost market share to other nations taking a combined 40% of funding, down from 55% in 2021. Startups in Indonesia, Saudi Arabia, Israel, Brazil and Singapore all contributed to the top 20 emerging market deals.

• Funding to Ag Biotech — the leading upstream investment category in 2022 — dropped 34% to $1.9 billion in 2023.

• The decline was more pronounced in other categories: Novel farming systems -79%, Cloud Retail Infrastructure -75%, eGrocery -60%, Farm Management Software, Sensing & IoT -58%, Online Restaurants & Meal Marketplaces -58%, In-store Retail and Restaurant Tech -57%, Midstream Tech -55%, Home & Cooking Tech -53%, Innovative Food -51%, and Ag Marketplaces & Fintech -48%.

This report was produced by AgFunder, with support from AgriFutures Australia (AgriFutures Australia) AgriFutures growAG & AgriFutures evokeAG and features spotlights on startups Atinary Technologies (Atinary), GOTERRA (Goterra), Nium (Nium) and Rarebird, Inc. (Rarebird).

It will be released on March 12 at 8am Pacific time.

Download the FREE report here.

About AgFunder AgFunder is one of the world’s most active foodtech and agtech VCs. We’re rethinking venture capital for the 21st century. Born in Silicon Valley in 2013, we use technology, media and our global network to invest in and support transformational founders and technologies. With the world’s only truly global agrifoodtech investment portfolio, we’ve invested in more than 100 companies across six continents.

About AgFunderNews AgFunderNews reports on the evolution of the global food and agriculture system. By going beyond the headlines, we analyze the people, companies and technologies aiming to improve human and planetary health.

Publishing daily news, our team of award-winning journalists delivers deeper insight on the growing foodtech, agtech and climate tech industries. A multimedia publication with a subscriber-base of 90,000+, AgFunderNews is a division of AgFunder Inc. Talk agrifoodtech with us: follow us on Twitter, LinkedIn & Instagram. Like us on Facebook.?

About AgriFutures growAG. and evokeAG.?

AgriFutures growAG. is the gateway to Australian and global agrifood innovation. Explore, find and connect with world leading agricultural research, unique technologies and commercialisation opportunities online in one, easy to use location. growag.com

AgriFutures evokeAG. is a global agrifood tech event. It brings together investors, entrepreneurs, farmers, government, researchers and corporates for a more resilient, productive, and profitable agricultural sector and value chain. Join us in Brisbane, Australia on 18-19 February 2025. evokeag.com

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