From AgTech to FoodTech: Is FoodTech Investment Fading?

The foodtech sector is one of the most dynamic and innovative, driven by the need to find food solutions that can address the growing challenges in food supply and demand for an ever-expanding global population. Nevertheless, there was a significant drop in global investments in 2023, with a reduction of 48% compared to the previous year, reaching a total of $15.1 billion according to the data in the “Global FoodTech Investment in 2024” report of DigitalFoodLab.

In 2023 and in the first half of 2024, the US, India, and China stood out as the major investors in the sector. At the top of the list was the US, with investments worth $8.7 billion, followed by India ($2.2 billion), and China ($2.1 billion). In the fourth place we have the UK, with $1.2 billion, followed by other European countries, notably France, the Netherlands, and Switzerland. It is worth noting that while Asia experienced a 3% drop in investments between 2022 and 2024, Europe showed a 4% increase.

Main Categories of Interest

The categories that attracted the greatest investments include Delivery, despite a significant decline from the previous years, AgTech, which remained stable, and FoodTech, which saw steady growth between 2022 and the first half of 2024. The Delivery sector, which includes all door-to-door grocery ordering and delivery services, totalled $5.2 billion in 2023, but was still higher compared to the other categories. Global investments in agricultural improvement technologies, AgTech, totalled $5.1 billion in 2023. This category includes solutions such as drones, sensors, and platforms for agricultural management. The FoodTech category, on the other hand, focuses on the development of new ingredients and food products and recorded investments worth $4.7 billion. While both categories have seen a slight decline compared to the previous year, they remain more stable than other sectors analysed, such as FoodService, ConsumerTech, and Supply Chain.

USA, China and India as Major Investors in Food

Investments in the US were divided mainly between FoodTech (37%), AgTech (30%) and Delivery (21%), for a total of $8.7 billion. Also in China, the $2.4 billion invested was concentrated on FoodTech, AgTech, and Delivery, with a focus on FoodTech. India, on the other hand, was dominated by the Delivery sector, accounting for 62% of total investments worth $2.3 billion.

The most prominent start-ups in the Delivery sector highlighted in the report include Zepto, which specialises in the fast delivery of groceries, Wonder, which supplies equipment and food for public facilities, and PICNIC, an online supermarket. In the FoodTech sector, major investments were made in Butternut Box, which operates in pet food, and Meati, which produces mycelium-based meat alternatives. Lastly, in the AgTech sector, top names include Atlas Agro, which produces low-nitrogen fertilisers, and Indigo Ag, which focuses on optimising agricultural yields and production processes.

Despite a significant drop in investments in 2023, the report expects to see some recovery during 2024: this has already been confirmed by the increased investments in Delivery during the first half of the year, supported by stabilising inflation globally. However, a return to the investment levels recorded before 2021 is unlikely. This is due to current economic conditions and increased demands for transparency from investors, who demand more detailed information before committing themselves financially.