- Venture capitalists invested more than $39.3 billion in food tech companies across 1,358 deals in 2021, according to PitchBook's annual report on investments in the space. This funding has been spurred by increased e-commerce and food delivery trends due to the COVID-19 pandemic, concern about the environment and a drive toward automation to reduce labor costs, the report states.
- For products, ingredients and R&D in the food space, 2021 saw $6 billion in investments — a 93.4% increase in deal value compared to 2020. There were 16 exits in the space — both acquisitions and initial public offerings — adding up to $14.3 billion.
- The report covers funding for several categories spanning food, ingredients, restaurants and grocery. These include products, food R&D and ingredients, food waste and traceability, restaurant recommendation, personalized nutrition, online grocers and ghost kitchens.
Last year was huge for food tech of all kinds. And zeroing in on products, ingredients and R&D, the money flowed in to companies working to make the food of the future. PitchBook's report estimated that the global market for these kinds of foods was expected to reach $31.9 billion last year. It is forecast to be worth $45.9 billion in 2026, posting a compound annual growth rate of 7.6%.
That growth was driven by a variety of factors, according to the report. On the whole, consumers are becoming more interested in becoming vegetarians, vegans or flexitarians, driving deeper interest in nontraditional options. A 2019 Ipsos report cited by PitchBook shows that the number of vegans in the U.S. grew more than 33-fold over 15 years, from 290,000 in 2004 to 9.7 million in 2019. Consumers are also becoming more aware of the potential health benefits of a plant-based diet, as well as the traditional food system's environmental impact. And as food technology evolves, manufacturers are able to make higher-quality substitutes for animal-derived meat, dairy and eggs, so consumers are more apt to buy them, the report states.
As for funders, there is a lot to get excited about in this space, according to the report. Plant-based food is becoming a more mature category, and companies with track records of proven success and potential for future growth — including Impossible Foods — are looking for late-stage funding. Companies using fermented proteins in products — like Perfect Day and Nature's Fynd — are showing market success with product launches and potential to increase both scale and offerings. And the commercialization of Eat Just's cell-based chicken in Singapore shows that this nascent space has real possibilities that could begin to be realized in the near future.
The big money that has been flowing to this space is unlikely to stop. In Food Dive's analysis, nine of the 10 biggest funding rounds for the entire food space last year went to alternative protein and tech-enabled food companies. Not even two months into 2022, food tech companies have already received $489.25 million in venture funding, according to Food Dive calculations. Three have been for $100 million or more — Remilk's $120 million Series B, Redefine Meat's $135 million round, and Next Gen Foods' $100 million Series A.
More big exits also might be in the cards for 2022. Impossible Foods, Perfect Day and Eat Just have all indicated that they would eventually like to go public, though it is unclear if any will IPO this year. However, it could be an active year for M&A. As technology advances and current companies — as well as Big Food — want to improve their food tech and product capabilities, more deals are likely to come. Upside Foods has already kicked off the year with its acquisition of cultured lobster startup Cultured Decadence.