AgFunder and Omnivore have released the sixth India AgriFoodTech Investment Report, detailing just under $1 billion in startup investment, a 60% year-over-year decline from $2.4 billion in 2022. However, India maintained a steady deal activity with 129 deals, only slightly fewer than in 2022. This reduction aligns closely with the global decline in agrifoodtech investments, which fell by 50% year-over-year. 

Unlike the global market, however, the total funds raised by Indian agrifood startups were not far off from the $1.3 billion garnered in pre-Covid 2019, suggesting a normalization of market conditions after a period of excessive valuations. A concerning trend is the limited participation of agrifood investors, with Omnivore being one of the few remaining, alongside generalist and climate-focused VCs. This scenario underscores the need for more committed investors across all stages. 

Below are some of the highlights of the report:

• In 2023, Indian agrifoodtech startups raised $940 million across 129 deals, down 60% from 2022.

• The number of deals remained almost flat with 129 closing in 2023 compared to 133 deals in 2022, indicating smaller deal sizes given the steep decline in dollars raised.
  
   
• More early stage deals closed in 2023 than 2022 indicating continued interest by investors in the category but at much lower valuations than in previous years.

• The median deal sizes dropped significantly year-on-year across stages and most dramatically at the late stages: 50% at the early stages (Seed and Series A), 39% at the growth stages (Series B and C) and 89% at Series D and later.

Both AgFunder and Omnivore continue to explore deals that push beyond traditional agrifood boundaries into adjacent sectors, highlighting the growing interconnectedness of food, agriculture, and other industries like climate tech. Despite a decrease in the median deal sizes, the willingness to invest persists, although at lower ticket sizes, with Ag Marketplaces and eGrocery receiving the most attention yet again. However, there are fewer players in the market than before, reflecting Power Law dynamics.  

Other key insights in the report:

• All parts of the supply chain received substantially less funding in 2023 than 2022, with Midstream startups faring the worst with a 80% decrease.

• eGrocery was still the most funded category, albeit with a 46% year-over-year drop to $420 million.

• Agribusiness Marketplaces & Fintech was the second best funded category, raising $162 million, a more pronounced 62% decline.

• Together, eGrocery and Ag Marketplaces & Fintech accounted for 62% of the capital raised in 2023.

• Many later-stage startups raised follow-on bridge capital in 2023, resulting in smaller deals at the late stage. This is in line with global agrifoodtech investment trends, where later-stage startups have raised down rounds and overall valuations have been severely corrected.

Louisa Burwood-Taylor, Managing Editor of AgFunder News, observed, “The global downturn in agrifood investments is attributed to fewer and smaller deals, but the situation in India indicates a fundamental shift. Although the number of deals remains nearly unchanged, the investment approach in India has become more selective and merit-based, suggesting a gradual and promising revival of the sector.”

Mark Kahn, Managing Partner, Omnivore, said, “What we see unfolding before us is the return of realistic valuations that reflect the operational and financial achievements of the companies. From unbridled growth strategies, the focus is squarely on prioritizing building a strong business model, focusing on profitability, and creating value for customers and stakeholders. Like 2023, this year will be a great vintage year to invest in promising startups, especially for founders who are building differentiated and unit economically viable businesses from the beginning. ”

This report is produced by AgFunder in partnership with Omnivore and will be released at 01:00 pm IST on Wednesday, April 30, 2024 and includes spotlights on the startups – altM, Fasal, Faunatech, and Intello Labs.

About AgFunder

AgFunder is a world-leading venture capital and intelligence platform for the global food and  agriculture industry. AgFunder’s team of award-winning journalists and researchers reports on and analyzes the people, companies, and technologies aiming to improve human and planetary health via its news site AgFunderNews and research platform. AgFunder is also one of the most active agrifoodtech investors globally, using technology, media and networks to invest in and support transformational founders and technologies.

About Omnivore

Omnivore pioneered agritech investing in India and is the only impact investor in South Asia focused entirely on agriculture and food systems. The firm currently manages over $300 million across three funds and invests in Indian startups developing breakthrough technologies for agriculture, food, climate, and the rural economy.

Food production is an important global market and one that is worth trillions of dollars worldwide. As such, it’s no surprise that many business leaders choose to enter the sector and offer new foods to consumers.

Entering into this fast-paced and highly competitive market can be a challenge, especially if your specific niche is already saturated.

Food production start-ups that want to succeed need to ensure that they are streamlined and efficient from the beginning to save money and offer the highest possible standard of products to consumers.

To achieve this aim, new food production companies need to be using the right tools and technologies to ensure efficiency and reduce costs.

Here are some essential technology solutions and digital tools that every start-up food production company needs.

Temperature Control Tech

Most ingredients and foods need to be stored and cooked to specific temperatures, depending on their status- before and after cooking, items will need to be kept at different temperatures. Managing and checking all of these temperatures can be a logistical challenge, particularly if you have many stages to go through before you achieve the finished product. Temperature control technology can help you to monitor the temperature of each ingredient and change the temperature of ovens or fridges accordingly to ensure that items are always fresh and fit for consumption.

Case Packing And Tray Loading Solutions

Getting your naked food product into your packaging can be challenging if you do it manually, particularly as your business grows. If you use your hands, then you need to make sure that you use gloves and focus on hygiene, while manually using tools can be equally time-consuming. Tools like BPA’s case packing machine can save your team’s time and reduce wastage, which makes it a great solution for scaling up your food production company. It will be easier to load trays and pack containers then easily get them labeled and shipped to the consumer.

Logistics Solutions For Warehouse And Inventory Management

In food production, there are lots of ingredients, packaging products, and small pieces of equipment to keep track of. Knowing where everything is, what it’s used for and, as is the case for ingredients and foodstuffs, how fresh it is, can require a lot of paperwork and organisation if undertaken manually. With the help of logistical solutions for warehouse and inventory management, you can assign each item a unique barcode, and then track its progress throughout your premises. Using these tools can save you time and reduce the chances of waste in your start-up food production organisation.

Payroll And Employee Management Software

There are more than 131,616 food production employees in the US alone, and many companies employ multiple team members to manage their food production offerings. Payroll and other essential employee management tasks can be time-consuming if they’re undertaken manually. It can also be hard to manage employees effectively and offer them the perks they expect without digital tools. Food production requires dedicated, efficient, and hygienic staff, so a low turnover is crucial. Payroll and employee management software solutions can help companies to manage their teams more effectively and reduce staff turnover, which can benefit their business in the long run. Technology and software tools can help your food production start-up to grow and achieve the success it deserves. It might seem hard to choose the right products, especially as there are so many options out there, and the wrong one can waste your time and hard-earned money. These suggestions should help you to find the right tools for your fledgling food production business

The collaboration creates an opportunity to penetrate the Asian market with 3D-bioprinted structured seafood products

MeaTech 3D Ltd. (Nasdaq: MITC) (“MeaTech”), an international deep-tech food company at the forefront of the cultured meat industry, is pleased to announce that it has signed a memorandum of understanding with Umami Meats for the joint development of 3D-printed cultured structured seafood.

Umami Meats is a Singapore-based cultured seafood company with a focus on developing species that are expected to experience severe supply-side shortages in the coming years due to climate change, overfishing and continuously growing consumer demand. The global seafood market was estimated to be worth US $110.2 billion by 2022 and is growing at a CAGR of 3.6% (FMI – The Food Industry Association).

This collaboration opens a door for both companies into the Asian market, and Singapore specifically, which is currently the only country that has authorized the production and distribution of cultured meat.

The agreement is part of MeaTech’s strategy of collaboration with other players in the alternative protein space and takes advantage of the company’s flexibility in its technological and biological capabilities to develop and print a wide variety of species. With this agreement, MeaTech will be adding seafood to its portfolio of bovine, avian and porcine products under development.

The company’s innovative 3D bioprinting technology can produce complex meat products with pinpoint precision at an industrial rate of production without impacting cell viability. Through the company’s private subsidiary, MeaTech is developing and commercializing its 3D-printing capabilities in-house and to third parties in the food-tech sector.

MeaTech also sees this collaboration as an opportunity to make a valuable contribution to helping preserve marine ecosystems and wildlife while addressing the environmental challenges surrounding the aquaculture and fishing industries.

Arik Kaufman, MeaTech’s Chief Executive Officer & Founder: “We are very pleased about this new agreement which reflects our commercialization strategy of industry collaboration using our unique 3D printing capabilities. We are excited about entering into the seafood sector and believe it will lead us to new market pathways throughout Asia and worldwide.”

Mihir Pershad, Umami Meats’ Chief Executive Officer & Founder: “We are delighted to establish this collaboration with MeaTech to expand our product range with their 3D printing capabilities. This partnership will enable us to build upon our technology platform for cultivating fish muscle and fat to produce a variety of structured products that meet the desires of discerning consumers. We believe cultivated seafood holds tremendous potential to provide a local, sustainable source of healthy protein and to address many of the challenges facing our food system and our oceans.”

About MeaTech

MeaTech 3D Ltd. is an international deep-tech food company at the forefront of the cultured meat revolution. The company initiated activities in 2019 and is listed on the Nasdaq Capital Market under the ticker “$MITC”. MeaTech maintains facilities in Rehovot, Israel and Antwerp, Belgium and is in the process of expanding activities to the US.

MeaTech is developing a sustainable, slaughter-free solution for producing a variety of beef, chicken and pork products, both as raw materials and whole cuts. The company’s approach to meat production and modular factory design will provide an alternative to industrialized animal farming with the potential to enhance food security, reduce carbon footprint, and minimize water and land usage.

About Umami Meats

Umami Meats is cultivating a sustainable seafood future by producing delicious, nutritious, affordable cultivated seafood that is better for our health, our oceans and our future. Umami Meats’ cultivated, not-caught seafood offers equivalent nutrition to traditional seafood and provides a delicious culinary experience that is free from heavy metals, antibiotics and microplastics.

Umami Meats has also been recognized as a Semi-Finalist in the XPRIZE Feed the Next Billion competition, Fi Global Startup Innovation Challenge finalist, member of Forward Fooding’s 2021 FoodTech 500 list, and as the Best Emerging Sustainable Seafood Company – Southeast Asia in the 2021 Global Green Business Awards.