Investment in food technology and agriculture services around the world dropped almost 5 percent in 2019, showing that investment firms are paying less attention to the sector amid a pullback, according to a report by the Financial Times.
The total amount of funding fell to $19.8 billion, according to a study by online food and agriculture technology venture capital (VC) platform AgFunder. The number of deals were down 15 percent, to 1,858.
Last year was good for some companies, but mainly the most recognizable ones. DoorDash got $1 billion in financing and Deliveroo got $575 million. However, overall funding in the AgriTech sector was down 56 percent to $2.4 billion, and the amount of new entrants into the sector discouraged new investors, according to Louisa Burwood-Taylor at AgFunder.
“You have leading players in each market that are raising bigger and bigger rounds to maintain their dominance. This makes it less attractive for new start-ups to launch into the marketplace, but also for investors,” she said.
The dip is a stark contrast to 2018, when VC fundings doubled from the year before.
Last year AgriTech funding was all about “innovative foods” like plant-based meat substitutes.
There is a bright spot in funding for “novel farming,” which saw a $125 million funding round for robotic insect farm Ynsect, as well as funding for vertical farm company AeroFarms and Infarm in Berlin.
The investor base widened as well, with SoftBank backing up Colombia’s Rappi and Brazil’s Loggi.
Temasek, an investment company in Singapore, funded a vertical farm company called Bowery, cell-based dairy company Perfect Day and delivery robotics firm Nuro. Temasek and SoftBank also took part in DoorDash’s $1 billion funding round.
Temasek’s managing director of agribusiness, Anuj Maheshwari, said that “New and innovative technologies are catalysing revolutions in the agri-food value chain.”
Food and agriculture investments in the U.S. went down 2 percent, to $8.7 billion. In China, investments were down 40 percent, to $3.2 billion.