“Last year marked an exciting financial milestone for food tech companies. According to a new report released by AgFunder – Europe AgriFood Tech Investing Report 2018 – food tech companies and agtech startups raised a whopping $1.6 billion last year in 421 separate deals across Europe.
Traditionally, Europe has lacked a competitive edge when it comes to the consumer base or average farm of any one country. And while the global food tech industry has grown remarkably in recent years, Europe is establishing its own pace. Regularly positioned as one market, and characterised as less entrepreneurial and more risk averse than similar markets, Eruope is also a market with many governing bodies, cultures and borders.
Even so, Europe has demonstrated its quickness to embrace novel farming systems – particularly indoor agriculture, and overall investment in agrifood tech startups is on the rise.
Startup activity in the industry is also on the rise, with increased expertise, research and available capital. The AgFunder report lists that entrepreneurs are needed in this industry for their passion and drive as well as needing investors and corporations, while acknowledging that innovation is essential to sustainably feeding future generations.
The report also details how the pace of agriculture technology innovation has not, to date, kept up with other industries and is in fact the least digitised of all the major industries. In the future, investments in agriculture technology will play a key role in the operation of the entire agrifood sector – a $7.8 trillion industry that not only feeds the global population but also employs over 40% of them.
Meanwhile, the need for innovation in agrifood tech is greater than ever. In order to feed a growing population while dealing with climate change, environmental degradation, limited natural resources, shifting consumer demands, chronic disease and food waste, we need innovation in the agrifood industry.
All this adds up to opportunities for entrepreneurs to disrupt the food industry. In general, most of the agrifood tech startups funded recently are aiming to do just that: disrupt the industry and solve our global food problems.
Rising to this challenge, last year there was a 23% growth in the number of deals involving food tech companies and agtech startups all across Europe.
This is an enormously exciting development because it shows the high number of entrepreneurs entering the industry. Even more exciting is the 200% increase in funding to upstream startups — those companies closer to the farm than the retailer — particularly in the technology sector like farm software, sensing technologies and robotics.
Another exciting development is the diversity of the investor base. Despite rapid growth, no individual sector has dominated the funding. Investors across the board are getting excited about seeing new, high quality agtech startups.
Some notable highlights from the report:
- $1.6 billion, representing 9% of global funding, was distributed across 412 deals from 603 unique investors.
- The food tech and agtech industry is diverse, with an even spread of funding across tech categories.
- Upstream startups in this industry raised $0.9 billion, a 13% share of all upstream investments globally. Upstream categories includes Ag Biotech, Farm Software, Farm Robotics, Midstream Tech, Innovative Food, Biomaterials, Novel Farming Systems and Agribusiness Marketplaces.
- Deals made in the seed stage accounted for almost 70% of deal flow and 15% of money invested, substantially more than the global numbers.
- Proportionally, Europe has a greater footprint in Novel Farming Systems – including indoor ag and aquaculture systems – than globally, where it represents just 4% of funding.
While the European food tech ecosystem lags a bit behind other markets, this new report demonstrates that innovation in agtech is growing in Europe and that investors are willing to support earlier stage companies. Founding partner of Urban Health Farms, Bernard Sleijster says, “If ever there was a good time to enter a promising market, it’s now.”