According to Finistere Ventures, 2020 will be a tremendous year for AgriFood tech investment, with 2020 already exceeding 2019's record-breaking totals. As of the end of Q3, AgriFood tech startups raised $11.6B in funding in 2020, bringing the investment total from 2010 through Q3 2020 up to $46.4B. Finistere released the latest findings of its continuing AgriFood Tech Investment Review series today (Nov. 19).
“The flow of capital is shifting as the market matures. While more investment dollars pour into advanced crop protection technologies, indoor farming, alternative proteins, food delivery, and supply chain advances, investment in mainstays like digital ag is consolidating as leaders start to emerge,” said Arama Kukutai, co-founder and partner, Finistere Ventures.
Developed in collaboration with PitchBook, key findings from the report include:
- AgTech investment totaled $3.07B in the first three quarters of 2020 (total capital invested in 2019 was $2.7B)
- FoodTech investment totaled $8.37B in the first three quarters of 2020 (total capital invested in 2019 was $7B)
- Majority of capital invested in both sectors went to later stage deals – demonstrating increasing market maturation
- In the AgTech arena, indoor ag players benefited most from COVID tailwinds tied to supply chain insecurity and demand for fresh produce
- Likewise, in FoodTech, startups in e-commerce delivery and meal kits benefited most from COVID concerns
“With more than $46B of venture capital flowing into ag and food advances over the past decade, AgriFood tech has become a focus of tremendous investor interest. As COVID shone a light on some of our food and agricultural production system fragilities that need strengthening, capital flowed in to support the trend to dine at home,” said Kukutai. “While substantial progress has been made, there is still a long way to go. The investment trend we are seeing is long overdue in a massive sector that has been under-invested, and there is a lot of room for further growth. Building a sustainable ag and food ecosystem is absolutely critical, and it will take a lot of time and more capital.”
The report also provides a comprehensive look at which sub-sectors earned the most investor interest, highlights the top 2020 AgTech and FoodTech deals thus far, breaks out investment trends by region, and evaluates exit values.
“I don't expect a big valuation collapse anytime soon," Kukutai said. "Valuations will tend to hold up if the companies still have a runway as investors continue to fund their progress. However, 2021 will bring more moments of truth and reckoning as agrifood startups’ timelines to meet critical growth milestones have accelerated and they are forced to prove both their ability to scale to profitability and deliver return on investment. Some sectors, like alternative proteins, will need patient money to succeed.”
Explore the full report findings, methodology and supporting graphics in more detail here.