Foodtech investment followed a similar trajectory to other tech sectors in 2023, with a dramatic drop off in funding from the heady days of 2021 and early 2022. The post What were the top 15 foodtech deals of 2023?...

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Foodtech investment followed a similar trajectory to other tech sectors in 2023, with a dramatic drop off in funding from the heady days of 2021 and early 2022.

Funding for eGrocery—the biggest category in foodtech*—continued its precipitous decline, dropping from $4.8bn in 2022 to $1.3bn in 2023 as investors frustrated by the sector’s high cash burn, “growth-at-all-costs” mentality and poor supply chain management shifted their focus to upstream categories closer to the farm.

Within the eGrocery segment, the rapid grocery delivery market (think GoPuff and Getir) has been under particular pressure as consumers have returned to shopping in person post the pandemic and competition has heated up, prompting key players to scale back operations and tweak their business models.

Innovative food, an AgFunder category that includes alternative proteins, also experienced a sharp drop off in funding, which fell from $3.2bn in 2022 to $1.1bn in 2023 amid declining category sales and business failures in plant-based meat and increasingly negative media coverage on cultivated meat.

In 2019, Japanese investor SoftBank—best-known for its investments in Uber, Slack, Alibaba and DoorDash—pumped a staggering $1bn into Columbian on-demand delivery startup Rappi and $940m into US-based autonomous delivery startup Nuro, which has recently engaged in several rounds of layoffs to conserve cash.

In 2020, foodtech funding picked up further, with Chinese grocery e-commerce platform Xingsheng Youxoan raising $800m, while US-based ghost kitchen provider REEF Technology (which has recently adapted its business model in a bid to focus on profitability) raised $700m in a round led by UAE sovereign wealth fund Mubadala Investment Company.

In 2021, funding for eGrocery went into the stratosphere, with Xingsheng Youxuan raising a further $3bn in a round led by Sequoia Capital, while US-based rapid food delivery startup GoPuff raised $1.15bn in a round backed by D1 Capital Partners, Fidelity and SoftBank’s Vision Fund.

In 2022, rapid food delivery startup Getir (which has been dramatically scaling back its operations of late) raised $768m in a round led by Mubadala Investment Company, while US-based ethnic eGrocer Weee! raised $425m in a series E round led by SoftBank, but by the middle of the year, funding had started to dry up.

In 2023, funding dropped back to a little over where it was in 2014. But there were some bright spots: Germany’s yFood Labs, which makes meal replacement drinks and nutrition bars, secured a $229m investment from Nestlé; while Indian rapid grocery delivery startup Zepto raised $200m in a series E round led by StepStone Group and Goodwater Capital to achieve unicorn status in August.

We’ll paint a fuller picture of what’s been going on in AgFunder’s Global AgriFoodTech Investment report next year, but in the meantime, here’s a sneak peek at the top 15 foodtech rounds, based on preliminary data from AgFunder.

Top 15 deals in foodtech, 2023 (Source: AgFunder)  

*Foodtech includes the AgFunder categories innovative food (which includes novel ingredients and alt proteins), plus eGrocery (online stores and marketplaces), instore retail & restaurant tech, online restaurants & marketplaces (meal kits etc), cloud retail infrastructure (ghost kitchens, last-mile delivery robots and services, and home & cooking tech (smart kitchen appliances etc).

For the purposes of this analysis, we’ve excluded midstream technologies (an AgFunder category that includes food safety and traceability) and novel farming systems (which includes insect ag and other indoor farming platforms).

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