Agrifoodtech startup funding slides 60% in 2023: Report

Agrifoodtech startup funding: A recent report by AgFunder and Omnivore unveiled a significant downturn in funding for agrifood technology (agrifoodtech) startups, plummeting by 60 per cent to $940 million last year. Despite the decrease in overall funding, the number of deals remained relatively stable, indicating a shift towards smaller deal sizes and lower valuations.

In 2023, agrifoodtech startups secured a total of $940 million across 129 deals, down from the previous year's figures. Notably, early-stage deals saw an uptick, suggesting sustained investor interest, albeit at reduced valuations compared to previous years.

The report highlighted a substantial decline in median deal sizes across various stages, with early-stage deals experiencing a 50 per cent drop, growth stages witnessing a 39 per cent decrease, and late-stage deals plummeting by 89 per cent.

Louisa Burwood-Taylor, Managing Editor of AgFunder News, noted that while the global agrifood investment landscape faces challenges, the situation reflects a discernible shift towards more selective and merit-based investment approaches, signalling a promising revival in the sector.

Among the sectors attracting funding, e-grocery led the pack with investments totaling $420 million, followed by agribusiness marketplaces at $162 million and online restaurants and meal marketplaces at $119 million.

Mark Kahn, Managing Partner at Omnivore, emphasised the resurgence of realistic valuations aligned with operational and financial achievements. He underscored a shift towards prioritising sustainable business models and profitability, reflecting a maturing ecosystem.

Looking ahead, Kahn expressed optimism, labelling the current climate as opportune for investing in promising startups focused on building differentiated and economically viable businesses. With a renewed emphasis on value creation, 2023 presents an auspicious opportunity for founders and investors alike to capitalise on emerging trends in the agrifoodtech space.

(with PTI inputs)