Agrifoodtech funding drops 12.5% YoY in H1 2024

Por Agroempresario.com

Agrifoodtech funding has fallen 12.5% year-over-year in the first half of 2024, with startups raising $7 billion across 427 deals, according to preliminary data from AgFunder, the parent company of AgFunderNews. This is down from the $8 billion raised across 934 deals in the same period in 2023.

AgFunder's report highlights that this decrease in funding is not surprising. Rob Leclerc, founding partner at AgFunder, commented, "Companies are going to run out of money and not a lot is getting funded. We need to be very careful about what we invest in unless we want to carry it."

Median deal sizes across various stages have also shown changes:

Series A: $7.5 million in 2023 vs. $6 million in 2024

Series B: $14.8 million in 2023 vs. $15 million in 2024

Series C: $23 million in 2023 vs. $24.5 million in 2024

Series D: $47 million in 2023 vs. $31 million in 2024

Debt: $40 million in 2023 vs. $10 million in 2024

Late Stage: $25 million in 2023 vs. $29 million in 2024

Seed: $7 million in 2023 vs. $1 million in 2024

In the first half of 2024, the Ag Biotech sector has performed notably well, raising $1.7 billion, nearly matching the total for all of last year. The Innovative Food category, which primarily includes alternative protein startups, remains strong with $828 million raised.

Additionally, the Bioenergy and Biomaterials category, one of the few that grew in 2023, has raised $761 million so far and is likely to surpass the billion-dollar mark this year.

Funding for In-Store Retail & Restaurant Tech reached $1 billion, while farmtech-related categories such as Ag Marketplaces & Fintech, Farm Robotics, Mechanization & Equipment, and Farm Management Software have seen a decline in investment.

Sectors previously popular, like eGrocery and Novel Farming Systems, continue to see a decrease in funding, although countries like India have shown robust interest in eGrocery. Vertical farming company Oishii has managed to attract a significant portion of the funding for Novel Farming Systems.

Investor Predictions vs. Reality:

Earlier this year, AgFunder’s Global AgriFoodTech Investment report gathered predictions from various VCs about the best-funded categories for 2024. Their predictions were as follows:

15% believed alternative protein would get the most funding.

Another 15% predicted biotech and biological inputs.

14% bet on health- and nutrition-related startups.

12% said food delivery would be the best-funded category.

9% highlighted AI and climate startups.

Current funding trends in H1 2024 show Ag Biotech leading the way, followed by In-Store Retail & Restaurant Tech and Innovative Food. Bioenergy & Biomaterials is performing strongly, and while food delivery is not the top category, it remains in the middle tier in terms of funding raised. The lack of funding in farmtech categories is concerning, but the integration of enabling technologies like AI could influence these sectors positively moving forward.

In summary, while agrifoodtech funding has seen a decline in the first half of 2024, certain sectors like Ag Biotech and Innovative Food continue to attract significant investment. The cautious investment climate emphasizes the need for careful selection of startups to ensure sustained growth and innovation in the agrifoodtech industry.