In 2018, European food tech and agtech startups raised $1.6 billion in funding across 421 deals. While this was on par with the total in 2017, there was 23% growth in the number of deals and the majority of activity took place at the earliest stages. This is exciting as it highlights the increasing number of entrepreneurs entering the industry, although there is a clear gap in later stage funding.
Even more noteworthy is the large 200% increase in funding to upstream startups - those operating closer to the farm or in the supply chain before the retailer. While our reporting might be slightly improved in 2018 due to our new data partnerships, there's no doubt upstream innovation is rapidly picking up steam in Europe, particularly in farm software and sensing technologies, as well as robotics and novel farming systems. Downstream investment -- particularly food delivery -- shrank 50% as several startups in the category have exited via IPO and M&A.
The investor base supporting agrifood innovation is varied with only a few dedicated sector funds, but it's growing and 603 unique investors made investments during the year.
"Indeed, more multistage investors are entering the Agrifood space, and in our programs we have been (fore) seeing and driving the trend for more high quaility Agtech startups," says Jan Meiling from StartLife, a founder of F&A Next.
Here are some more highlights from the report that was exclusively presented and first distributed at F&A Next last week:
• $1.6 billion of funding in 2018 across 421 deals with 603 unique investors. This represents 9% of global funding.
• The food tech and agtech ecosystem in Europe is very diverse with a more even spread of funding across tech categories.
• Upstream startups raised $0.9 billion, a more respectable 13% share of the global upstream total. Upstream includes Ag Biotech, Farm Software, Farm Robotics, Midstream Tech, Innovative Food, Biomaterials, Novel Farming Systems and Agribusiness Marketplaces.
• Seed stage deals accounted for nearly 70% of deal flow, compared to 55% globally, and 15% of dollars invested compared to just 4% globally.
• The UK and France lead the way in terms of investment: $388m across 103 deals and $324m across 62 deals respectively.
• Italy was the third most active ecosystem with 31 deals, the vast majority at the seed and Series A stage.
• CrowdCube, the UK crowdfunding platform, was the most active investor during the year making 13 bets while French firms followed with bpifrance making 11 and Seraphim 6.
• The exit landscape was bolstered by the $2.4bn acquisition of French digital livestock technology Antelliq by Germany's Merck.
"The European food tech ecosystem lags other markets today. However, we have every reason to believe that a healthy funnel of promising earlier stage companies, growing investor activity and availability of corporate venture capital will close the gap rather sooner than later," says Jeroen Leffelaar from Rabobank, another F&A Next founder.
Find out more about the key deals and investors driving Europe's food tech and agtech sector here: