2022 in agrifoodtech: Observations from writing a year’s worth of news roundups

By Jennifer Marston Each week, I write and publish AFN‘s Week in Agrifoodtech feature. For those not familiar, these are news roundups of the biggest stories in agrifoodtech from around the web each week — from fundraises to industry developments and sometimes delightfully bizarre initiatives.

Last year, 2021, was a banner year for agrifoodtech. Startups raised a record $52 billion as agrifoodtech’s importance in the news followed a smooth upward trajectory.

But when we finally tally up the numbers for 2022 for AgFunder’s global agrifoodtech investment report, they’ll probably be more akin to a rickety wooden roller coaster, where holding on for dear life is paramount. [Disclosure: AgFunder is AFN’s parent company.]

Since seeing is believing, nothing illustrated the downturn’s impact on agrifoodtech better than the act of rounding up the news each week to watch the rising and falling (and sometimes rising again) of different industries.

What follows are a few of my observations from these roundups.

Please note these are observations only, rather than an exhaustive, data-intensive list. If you have thoughts on agrifoodtech trends you don’t see here, drop me a line and let me know.

Foodtech deals got fewer and smaller 

This one seems obvious given the state of the world. Agtech saw fewer deals, too, but the drop was more pronounced for foodtech. 

This is probably because the bulk of funding early in 2022 went downstream. The year began with one mega-round after another, much of it for restaurant food delivery, grocery delivery and other consumer-facing parts of the supply chain.

Consider this list, from a Jan. 13 roundup:

Foodtech startup funding

• Bolt raises $709 million in Sequoia Capital , Fidelity-led round. The on-demand transportation and food delivery app will use the funds to expand into new geographies and add new business lines, such as 15-minute grocery delivery. ( TechCrunch )
• B2B e-commerce player udaan.com banks $250 million in convertible note and debt funding. The Bengaluru-based startup helps 'mom and pop' grocers to buy inventory and secure financing online. (TechCrunch)
• Reliance Industries Limited pumps $200 million into 'quick commerce' startup Dunzo . The conglomerate will acquire a 25.8% stake in the Google -backed on-demand delivery company. The investment - part of a broader $240 million fundraise - will complement Reliance's own -grocery platform JioMart Partner . ( Nikkei Asia )
• Gousto raises $150 million, bumping its valuation to $1.7 billion. The mealkit subscription service will use the new funding to build an automated fulfillment center in the UK. ( UKTN )
• Remilk raises $120 million for animal-free milk and dairy products. The Series B investment will be used to expand manufacturing capacity for the company's products, which are made via fermentation. ( The Times of Israel )
• Foxtrot raises $100 million to "modernize" the convenience store. The Series C funding will go towards opening new brick-and-mortar stores in the US while also building out the digital shopping component of the brand. (Food Navigator)

Enter war in Ukraine, continued supply chain problems, climate disasters and inflation. By Nov. 10, the foodtech weekly roundup looked like this:

• Roslin Technologies raises £11 million ($12.8 million) Series A led by Novo Holdings. Rosin aims to become the leading provider of animal cell lines for cultivated meat. ( vegconomist - the vegan business magazine )
• Plant-based snack maker Buddha Brands™ snags $5.25 million to expand to the US. Capital will also go towards hiring, new products and increasing production development. ( Food Business News )
• Proper Good lands $3.5 million seed round for shelf-stable meal products. YETI Capital and Artisan Group led the round, which will fuel Proper Good's retail expansion. (Food Navigator)
• Perfekto (YC S21) bags $1.1 million to redistribute imperfect produce. The Y Combinator graduate currently rescues food from more than 70 producers in Mexico and delivers it to customers (TechCrunch)

The mega-round by no means disappeared. Norway-based grocery startup Oda (Oda) just bagged $158 million. Restaurant tech also had a few high points in Q3 and Q4, including TouchBistro’s $110 million round.

However, much of what’s available right now in terms of funding has swam upstream. As the foodtech section of the roundup grew smaller, agtech often got bigger. The bulk of agtech deals continue to be early stage, but there’s a distinct interest in climate-related agtech startups.

Grocery delivery growth dropped

If there’s one story we’ve told ad infinitum this year, it’s the one about grocery delivery’s extreme nosedive.

Getir (Getir),  Jüsto (Jüsto),  bigbasket (BigBasket),  Zepto (Zepto). All of these companies raised well above $100 million in early 2022. Getir, for example, secured a whopping $768 Series E, on the heels of  Gorillas ' (Gorillas) $950 million round from late 2021.

The downturn fell swift and hard onto this sector partway through 2022. Here’s a small sampling of news roundup entries from May onwards:

• “Instant” grocery startups Getir, Zapp, and Gorillas announce staffing cuts.
• Instant grocery delivery startup Jokr will exit the US.
• ‘Instant delivery’ service GoPuff cuts 10% of its workforce and closes 76 warehouses.
• Getir is in talks to acquire its rapid delivery rival Gorillas. 

Layoffs grew relentless

Most reading this are all too familiar with 2022’s tech layoffs. Agrifoodtech was no exception, and as early as July, roundup entries were starting to look like this:

• Quick commerce startup Airlift Technologies shuts down. Airlift, which offered Pakistani users with express delivery of groceries, produce, and other items, ceased operations after unsuccessfully trying to raise more funding. ( TechCrunch )
• 'Instant delivery' service Gopuff cuts 10% of its workforce and closes 76 warehouses. The company says the cuts are part of an effort to reach profitability by 2024. ( CNBC )
• DoorDash will shutter Chowbotics 18 months after acquiring the robot salad-maker startup. DoorDash confirmed that the 'Sally' robots were not meeting internal company benchmarks. Ottomate
• Virtual restaurant startup Nextbite by sbe makes second round of layoffs after cutting staff in April. The company is restructuring to "strategically focus on current opportunities." according to CEO Alex Canter. ( Business Insider )

#Foodtech company Motif FoodWorks also lays off staff. It cut an undisclosed number of personnel and will refocus "to key priorities that we know will return maximum ROl for our customers and investors." ( Food-Navigator )

It wasn’t all bad news for CEA

Some recent closures and a drop in funding have some questioning the long-term viability of controlled environment agriculture (CEA), and vertical farming in particular.

However, the funding has by no means dried up. Canada’s GoodLeaf Farms just raised $150 million, following Soli Organic 's (Soli Organic) $125 million raise from Oct. Companies this year also created a Vertical Farming Manifesto to set standards for the sector.

In all likelihood, indoor farming will see more closures and corrections in 2023, but also more honest discussions around where it can make the most impact in our food system.

Ones to watch

Speaking of market correction, plant-based meat will likely see some of that in 2023. Cultivated meat, on the other hand, saw several positive developments in 2022, including  UPSIDE Foods (Upside Foods) getting FDA approval and Biden backing cultivated meat.

Finally, based on writing a year’s worth of news roundups, it’s safe to say we’ll see much, much more on the merits and challenges of carbon farming/markets, regenerative agriculture, and climate tech in general.

#climate #cultivatedmeat #inflation #startups #investment #egrocery #restaurantmarketing #controlledenvironmentagriculture