A host of startups are bringing innovation to all parts of the food system, from labs to farms to consumers’ plates. Financing is following.
Investment in the sector is up 6% in the first half of 2017 even as the total number of deals fell 27% to 369, according to a new report from market-research firm AgFunder. Large deals drove $4.4 billion in investments. Globally, agriculture and food, or “agrifood,” is a $7.8 trillion industry and employs 40% of the world’s population.
The sector is being transformed by climate change, population growth, resource constraints, consumer demands and health concerns.
Innovative foods, for example, still a sliver of the agrifood market, are attracting increased attention from investors. Startups are on the hunt for substitutes to fossil-fuel-intensive proteins. Alternative-meat companies Impossible Foods and Memphis Meats, which claim to use less land and less water than livestock, have attracted investment from Bill Gates. Funding for the segment has increased 60% to $206 million.
The U.S. dominates investment in food-tech, with nearly half of the deals and funding. Australia, France, Germany, Ireland, and Malaysia. India, Canada, and the UK all saw growth in deal activity. Investments in agribusiness startups landed Lebanon, Iraq, Myanmar and Latvia on AgFunder’s list for the first time.