The farm of the future is resilient, efficient and sustainable. Tech-enabled solutions for farming and agriculture will be essential in tackling humanity's most pressing challenges: feeding a growing world population and reducing environmental impact. Climate change affects agriculture and vice versa. INFARM's Chief Impact Office told us that "Industrial farming contributes 17% of global carbon emissions and leads to soil degradation, food waste and nutritional loss.”
The good news: Global VC investment in agritech has reached $6.4 billion in 2021, a 4.7x increase since 2016, taking a greater share of foodtech investment. Within foodtech, the cumulative enterprise value of agritech startups has been growing faster than delivery & logistics. It grew 10x since 2016 to $200 billion, while delivery & logistics startups grew 4.5x in the same period. Investors are also placing larger bets on early-stage agritech startups. Median Seed rounds increased 60% since 2016 to $1.6 million in 2021. The Median Series A round increased 3x to $9.4 million in the same period.
The bad news: Developing countries bear a disproportionate cost of climate change. Countries with high cost of climate change have attracted less VC money to make farming resilient and sustainable, while agritech startups in the US, France and the UK have attracted $12B, $0.8B and $0.6B respectively since 2016. In the same period, Africa and South America, who bear a high climate cost, have attracted $0.3B and $0.4B, respectively.
The bottom line: more VC investment in agritech is required, especially where it matters the most. For governments, it is a necessary tool to make supply chains reliable and increase food security. For investors, there is a major upside in finding the next billion-dollar company. As BlackRock's CEO Larry Fink said, "the next trillion-dollar startups will be in climate tech" (of which agriculture is a big component). Have a look at the fastest growing agritech startups:
🇺🇸 Farmers Business Network (FBN), a South Dekota-based B2B agritech marketplace, raised $300 million Series G at $1.8 billion valuation. Since 2014, FBN has been helping farmers make data-driven decisions to maximize the profit of their farms. FBN will expand its financial offering with operating and equipment loans, and insurance products for farmers. Embedding financial services in a marketplace is a lucrative opportunity.
🇺🇸 GrubMarket, a SF-based farm-to-table company, raised $200 million Series F at $1.2 billion valuation. In 2014 the company started as a marketplace connecting consumers with local farmers to capitalize on the growing trend of healthy and organic food consumption. Simultaneously, farmers benefit from a direct relationship with consumers. In 2019, GrubMarket also launched a SaaS offering providing online ordering, inventory management, financial management and CRM tools. The CEO Mike Xu stated that "GrubMarket has already achieved an annual run rate of $1 billion, with over 300% growth this year in eCommerce revenues and over 3500% growth in SaaS software sales, while maintaining strong net profitability." Explore 25+ fram-to-table startups in this interactive landscape.
🇺🇸 Daily Harvest, a NY-based direct-to-consumer (DTC) brand for frozen food products, reached a unicorn status after raising $77 million Series D. DTC has proved a winner of Covid-19, as seen in our recent foodtech report, as demand shifted online in 2020. This year alone startups in the category raised $3.0 billion, up 43% year on year.
Other notable foodtech deals from around the globe:
🇺🇸 Jinx, an LA-based direct-to-consumer premium dog food brand, raised $28 million Series A.
🇬🇧 Lyre's, UK-based non-alcoholic spirits company, raised $37 million at $500 million valuation.
🇺🇸 Monarch Tractor, the maker of the first electric tractor, secured $61 million Series B to expand its sales and manufacturing capacity.
🌱 Ivy Farm's CEO Dr. Russ Tucker argues governments should establish processes to foster foodtech innovation via Medium.
🗑 Marina Schmidt talks food waste with Xin Yi Lim, Executive Director for Sustainability and Agricultural Impact at Pinduoduo.
🎫 Ivan Draganov will speak at AgriFood Tech 2021 on trends shaping the digitization of agriculture.
💼 We're hiring! If you are interested in delivering industry-leading research (or working in product, sales or marketing), check out our jobs page, or reply to this email.
Tip of the week
Foodtech accounted for 17% of impact investment in 2021. Foodtech startups working towards Climate Action raised the most capilta in 2021 - $5.7 billion, followed by Zero Hunger with $3.9 billion.
This is Dealroom's weekly Foodtech newsletter. You can subscribe here to get more industry-specific intelligence on the evolving world of Foodtech, emerging trends, and game-changing startups. Delivered on Tuesdays.
Dealroom.co, Cornelis Dirkszstraat 27-2, 1056 TP, Amsterdam, The Netherlands
