Canada’s Agrifoodtech Sector Needs More Private Investment, Report Shows

By Agroempresario.com

A new report from the Canadian Food Innovation Network, titled Foodtech in Canada: 2025 Ecosystem Report, highlights the urgent need for a more substantial and engaged investor base in Canada's agrifoodtech sector. Despite notable growth in recent years, Canada’s agrifoodtech industry is significantly lagging behind the United States and the United Kingdom, particularly when it comes to investment.

The report points out that from 2018 to 2024, Canadian agrifoodtech startups, estimated at around 320 companies, received $1.6 billion in funding from both public and private sources. In comparison, the UK raised $8.8 billion, and the US secured a staggering $86.6 billion during the same period. This stark contrast highlights the gap in private investment and the challenges faced by Canadian startups in scaling their operations.

A Venture Capital Gap

One of the key findings of the report is what it calls a "venture capital gap" in Canada. While Canadian agrifoodtech companies benefit from significant public grant funding — accounting for 30% of the total funding — private venture capital is much less accessible. In contrast, the UK and the US only rely on grant money for 8% and 5% of their agrifoodtech funding, respectively. Meanwhile, venture capital funding in Canada makes up only 40% of the total, compared to 60% in both the UK and US.

“While public bodies in Canada are actively supporting the ecosystem, the gap in private capital access reveals a lack of overall ecosystem maturity,” the report notes. This indicates that while Canada is succeeding in early-stage support, there is still a long way to go when it comes to scaling and later-stage funding.

Challenges in Scaling

Investment capital for scaling companies remains a significant challenge. Lindsay Smylie from Plug and Play pointed out in the report that investment from corporate venture strategics or established VC firms for growth-stage companies continues to mature, but Canada still falls behind leading markets like the UK and the US.

The report highlights that for investment at early stages, such as pre-seed and seed rounds, Canada is on par with the UK and US. This is attributed to strong government support, affordable entry costs, and a wide range of incubator and accelerator programs. However, a widening gap emerges for Series A and later rounds. Series A and B investments in Canada are roughly half the size of those in the UK and the US, and Series C rounds in the US are three times larger than in Canada.

These discrepancies present a significant barrier for Canadian agrifoodtech startups seeking access to the capital needed to scale their businesses, build supply chains, meet regulatory requirements, and reach strong exit opportunities.

Untapped Potential

Despite the significant challenges, the report emphasizes the untapped potential in Canada's agrifoodtech sector. Out of 311 total investors, only 43 have made five or more agrifoodtech-related investments, accounting for half of the investors in the UK and one-tenth of those in the US. The percentage of active investors in Canada (14%) is similar to the UK and the US, but the total investment volume is still much lower.

“A larger, more engaged investor base is critical to scaling Canada’s foodtech industry and closing the gap with the UK and US,” the report stresses. Cam Crowder, cofounder of Redstick Ventures, added, “If we can build a stronger community of risk-tolerant investors, it will unlock tremendous potential in Canada’s foodtech scene.”

A Bright Future for Agrifoodtech

Despite the investment challenges, experts believe that the agrifoodtech sector in Canada has a promising future. Michael McGee, director of innovation at the accelerator Bioenterprise, highlighted that although the industry faces some obstacles, investment will continue to flow into the sector. With a growing focus on sustainable production, reducing environmental footprints, and ensuring food security in the face of climate change, Canada's agrifoodtech industry is poised to contribute significantly to both domestic and global markets.

As the report concludes, increased private investment in Canada’s foodtech sector is crucial for unlocking its full potential, driving innovation, and positioning Canada as a leader in the global agrifoodtech market.