Asia-Pacific agrifoodtech startup funding defies global decline in 2022
Climate change & food security concerns should put food systems transformation at the top of the agenda in Asia-Pacific. But are investors backing the right agrifoodtech startups?
It’s widely accepted that 2022 is a difficult year for the global financial markets. Asia-Pacific’s venture capital and agrifoodtech industries are by no means immune; investment flows to the region’s foodtech and agtech startups reached just $5.3 billion in the first half of 2022, a 47% year-on-year (YoY) drop, according to a new report from foodtech and agtech venture capital firm AgFunder .
The main reason for that decline is a pullback in funding to Chinese startups in the sector. In 2021, Chinese eGrocery startups raised a whopping $5.5 billion, contributing to the majority of the $7.5 billion invested across agrifoodtech. In the first half of 2022, Chinese agrifoodtech startups have raised less than $1 billion, compared to over $5 billion during the same period in 2021.
The rest of the region bucked the global trend, however, raising $3.9 billion in H1-2022, a 15% YoY increase.
See below for more highlights:
Asia-Pacific agrifoodtech funding totaled $5.3bn in H1-2022, a 47% YoY drop.?
Asia-Pacific agrifoodtech resists VC decline, ex-China: Asia-Pacific agrifoodtech startups outside of China raised $3.9bn in H1-2022, a 15% YoY increase.
2021 was a record-breaking year: Asia-Pacific agrifoodtech startup funding reached $15.2bn, a 67% jump from the $9.1bn raised in 2020. Almost half went to China.
Even excluding China’s mega-deals, the rest of Asia-Pacific broke records in 2021, raising $8.1bn in 2021, more than double 2020’s $3.9bn total.?
Chinese mega-deals precede mega failures: After yet another crazy year of mega deals to Chinese food delivery startups – the biggest a $3bn raise for Xingsheng Youxuan – the high cash-burn, growth-at-any-costs model has finally cooled on the back of government regulations, significant downsizing and even eGrocery closures.
China farmtech on the rise: It wasn’t all about eGrocery in China in 2021; the country closed some $605 million in farmtech deals in 2021, a 60% YoY jump. Ag Biotech, supply chain tech and robotics are particular strengths.
Downstream investment dominates, even outside China: Investors outside of China still pumped over $5 billion into downstream technologies, particularly those enabling food delivery like eGrocery, Restaurant Marketplaces, and Cloud Retail Infrastructure but also Retail and Restaurant Tech, which raised nearly $1 billion in the rest of Asia-Pacific.
Farm tech is maturing as funding doubles: Farm tech funding in the region reached $2.2 billion in 2021, double 2020 levels, driven by some large, later stage deals as well as a 17.5% uptick in the number of deals YoY.
Indian agrifoodtech could break records in 2022: $2.7bn of funding recorded in H1-2022.
Deals got bigger in 2021 but could drop in 2022: Median deal sizes increased across stages in 2021, hinting at inflated valuations, particularly at the early stages. The median decrease at late and growth stages in H1-2022 is indicative of the expected decline in funding for the year, particularly from China.
Australia’s surprising downstream strength: Despite being a major global agriculture centre, Australia’s top three deals were restaurant technologies and the country’s leading plant-based meat company.
Michael Dean , AgFunder founding partner and Asia-Pacific head said: “Early on we saw the potential of the region, with its booming population growth and emerging centres of technology innovation, as a destination for agrifoodtech venture investment. We established our GROW Accelerator and Singapore-based venture impact funds to assist institutional and corporate investors in the region to access the disruptive technologies that have the potential to drive efficiencies, profitability and sustainability for decades to come.”
This inaugural report was produced in partnership with Thai Wah , Omnivore and AgriFutures Australia and will be released at NOON SGT on Tuesday, October 25, 2022 and includes spotlights on startups, Lyro , Aquaconnect , Mayani , Green Rebel , Tepbac , Ai Palette .
About AFN and AgFunder
AFN is a news site dedicated to publishing daily, original news about the burgeoning foodtech and agtech (“agrifoodtech”) startup and venture capital industry. Previously called AgFunderNews, AFN is a division within AgFunder Inc, one of the world’s most active agrifoodtech venture capital firms. For more information about AFN, please visit: www.agfundernews.com . For AFN Asia, please click here .?
Become an Insider: subscribe to our must-read food & agri newsletter, research reports, and our fund alerts, here .
About Thai Wah Public Company Limited (TWPC)
Thai Wah Public Company Limited has operated in the agriculture business and food industry in Thailand for over 75 years with a commitment to creating innovation and sustainability from farm to shelf along with promoting substantial business growth. The Company’s core businesses are divided into three main categories: the tapioca starch and starch-related ingredient solution under the “ ROSE BRAND ”, the food products such as vermicelli and noodle products, and the biodegradable products under the “ROSECO” brand distributed to local markets as well as global customers over 35 countries across the world.
For more information about Thai Wah, please visit https://www.thaiwah.com
About Omnivore
Omnivore is a venture capital firm based in India and is the only impact investor in South Asia focused entirely on agriculture and food systems. Since 2011, Omnivore has backed over 45 agritech startups. Every day, Omnivore portfolio companies drive agricultural prosperity and transform food systems across India, making farming more profitable, resilient, and sustainable.?
For more information, please visit: https://www.omnivore.vc/ ?
For exclusive updates on the agri food sector in India, subscribe to our monthly newsletter Omnivore Harvest, here .?
About AgriFutures Australia ?
AgriFutures Australia is a research and development corporation funded by the Australian Government and industry to grow the long-term prosperity of Australian rural industries and communities. It conducts research, development, and extension programs for a number of levied and emerging industries and has created the innovative growAG. platform and evokeAG. event and network.?
The AgriFutures evokeAG. 2023 Down to Earth event will take place in Adelaide, South Australia on 21-22 February 2023. The evokeAG. 2023 Startup Program, is a prime opportunity for agrifood tech startups to showcase their technologies and products. Applications for evokeAG. Startup Alley , evokeAG. Startup Showcase and the evokeAG. Investor Pitch Dinner close on Sunday, 30 October 2022 at 11.59pm AEDT.??
AgriFutures growAG . is an online agrifood innovation marketplace which allows users to explore and connect with relevant expertise, research and investment opportunities from across Australia’s agrifood innovation system at growag.com.
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