Despite the covid pandemic hitting the food space hard, a number of agrifood startups have managed to raise successful funds over the last year. Raising funds during a global pandemic shifted the foundations of the food industry and resulted in the emergence of a number of new trends and factors.
Despite 2020 being far from a stellar year for business, food tech startups actually came up trumps and there are a handful of positive takeaways we can bring with us into 2021:
Cell-based products could see commercialisation sooner than we thought after plant-based egg alternative brand Eat Just gained the worlds first regulatory approval in Singapore to produce and sell its lab-grown chicken meat.
For the first two quarters of 2020 total agtech investment reached $2.2 billion compared to $2.7 billion raised in total for 2019 and while slightly lower food tech investment didnt stop gaining traction either, reaching $4.8 billion during the first two quarters of 2020 compared to the $7 billion raised for all of 2019.
Despite the challenges thrown at startups during the year, a number of companies were able to pivot fast and efficiently, some launching direct-to-consumer sites to open new revenue channels and others who launched community funds and new tools for restaurants to help grapple with the effects of lockdown.
The importance of driving farmer profitability was highlighted, with companies offering tools and technology that allowed for the generation of higher revenue.
It´s official: the control is now in the farmers hands.
Startup to watch: Farmers Business Network (FBN) was one of the most funded agtech startups in 2020. The high-tech platform that connects farmers and allows them to share industry wide prices to help bring increased shared transparency, announced last August that it had raised $250 million in a Series F investment round. This came as covid continued to send ripples through the supply chain and farmers looked for new ways to save money on things like agricultural inputs. Companies like FBN relished in the increased investor interest surrounding farmer first platforms.
To supply chain..
Complete supply chain transparency from field to food processing has long been a point of interest in the food industry. The pandemic affected the food chain more than we could ever imagine leading to disrupted supply chains, transport restrictions, food waste and empty shelves. With the markets finally leveling out a few months in, 2020 certainly highlighted the insecurities of our current food supply chain. Consumers lost trust in animal-based food production and companies big and small started to question not only the sustainability of their food supply but ways they could increase their products shelf life and offer higher levels of supply chain management and transparency.
Startup to watch: MicroGen Biotech provides a patented and cost effective solution to reduce heavy metal in food, increase soil health to enhance crop yields and clean soil pollution in industrial sites. Rice, wheat, cocoa, and leafy greens take up these heavy metal residues and concentrate them in our food, which then accumulate in the human body. Ingestion of heavy metals causes toxic and carcinogenic effects especially in infants. The company raised $3.8 million in Series A funding last May from both US and European agtech investors which will offer a safer way to improve food safety across the world and offer consumers higher levels of transparency.
Key takeaway: transparency and food safety are more important than ever.
The pandemic accelerated the future of retail as in-store shopping experiences were invaded by new technological opportunities. Robotic assistants, cashier-less stores and increased personalization were all heavily introduced last year in efforts to improve customer experience.
It wasnt only in-store experiences that got a shake up. The way in which food is delivered to the consumer has been innovated thanks to new technological advancements.
Startup to watch: Nuro is the #1 automated delivery vehicle focused on autonomous delivery services using dainty, little vehicles to complete orders. The startup recently made history when it announced it has received its first ever Autonomous Vehicle Deployment Permit from the California DMV which gives Nuro the permission to launch its commercial vehicle service in the state of California, delivering groceries and other household items to users homes, a first in the US.
Key takeaway: automation and robotics are invading our in-store (and out-of-store experience).
Vertical and indoor farming got really big in 2020. Starting the year with the growth of smaller vertical farms in supermarkets and consumers homes, we saw compelling developments throughout the year when it came to increased local production and the potential of growing fresh food closer to the consumer through controlled-environment agriculture.
There were a lot of happenings in this space over the course of the year; inFarm expanded its network of pod-like mini farms across grocery stores, raising $170 million back in September and bringing its total funding (so far..) to a whopping $304.5 million. Other companies like Aerogarden and Farmshelf also promoted the idea of growing your own gardens at home, and with quarantine keeping us in lockdown for most of the year, people were more interested in indoor gardens than ever.
Startup to watch: But it was young company Pico that drew our attention, the new automated indoor garden that made a splash on Kickstarter early into 2020. The company was able to raise over $1.3 million on the funding site, as interest around the self-contained growing system which can be incorporated into consumers walls buzzed.
The only drawback for these at-home systems is the price tag attached to smart technology at the moment. These innovative self-growing systems may be unattainable for many households and this is perhaps why larger commercial farms made most of the headlines this year.
Key takeaway: food production will be increasingly more localized.