Foodtech
Hungry for more
Last updated: 1 Jun 2023
Market 101
Foodtech — defined by Sifted as foodstuffs, ingredients and technology used to produce food eaten by humans or animals — is suddenly the flavour of the month again. The consolidation of the speedy groceries sector — which proved to be an expensive distraction — has prompted a fresh wave of foodtech enthusiasm.
The tech itself appears to be improving too, as companies find innovative ways to improve quality and scale production — but lots of carnivorous consumers are yet to be convinced by lab-grown alternatives. Soon, they may not have a choice. With populations and emissions spiralling, our agricultural systems are nearing breaking point or “farmaggedon”.
Plant and microorganism-based foods haven’t quite lived up to expectations but interest in cell-based proteins — where stem cells are cultivated in labs to produce meat-like products — have taken the biscuit after a surge in funding in 2022. The US and Israel have already approved the latter for human consumption, giving runway for European regulators to follow suit and hurry their deployment to supermarket shelves.
Early stage market map
Key facts
30%
Jump in funding for European foodtech startups in 2022, compared to a 5% increase for agritech¹
50%
Expected increase in food demand by 2050²
11x
Funding growth of Austria’s foodtech hub in 2022 — the fastest-growing in the world (Saudi Arabia was closest with 4.4x)³
Trends to watch
B2Burgers
Foodtech momentum swung in B2B’s favour in 2022, as it did for many other sectors: value creation jumped 97% to $77bn, at the expense of B2C foodtech which lost 22% of its European enterprise value ($132bn).
Rather than going directly to consumers, the more reliable revenue stream right now is creating and selling synthetic protein (and other ingredients) to businesses, which in turn dress them up for the kitchen table. But ultimately the end user doesn’t change; and this industry will grow only if more people are convinced that lab-grown meat is as tasty as the real deal.
Corporate tasty treats
Corporates and CVCs scaled back their activity across European tech last year, but foodtech was one sector they didn’t cool on. 25% of rounds completed at Series A and above had at least some corporate venture involvement, up from 15% in 2021.
Bets are being placed earlier too. Only 17% of startups with €1m+ funding to their name raised money in 2022, compared to 25% the year before.
Big food manufacturers with real buying power still hold the key to getting these products in front of consumers.
AI appetite grows
AI is cooking, with generative systems like ChatGPT and BuzzFeed’s “Botatouille” whipping up surprisingly good recipes. More broadly, AI is being used by startups to mine rich data, by identifying intricate patterns and trends within (for example) extensive agricultural datasets, in the hope of predicting the weather and maximising crop yields.
Other rising AI applications include food safety management systems, such as operations, cleaning and inspections, as well as supply chain optimisation for distribution.
Beware of poking the farmer
In March this year, Italy’s government backed a bill to ban lab-grown meat and other synthetic foods following uproar from local farmers and agricultural lobbyists.
Food regulators in the US, Israel and Singapore have all approved the use of cell-grown chicken, so once again Europe is playing catch up. The European Commission has only gone as far as saying that cultured meat "could be considered as a promising and innovative solution”, while no approval for human consumption has been sought. Waiting too long risks giving European farmers greater opportunity to raise their pitchforks.
Startups tracked by Sifted
Sifted take
Foodtech has been on the boil this past 18 months. Whether it’s complex fermentation or molecular farming, the sector is far from reaching its potential, and will soon have a full plate with more mouths to feed globally. Regulatory hurdles — for example for lab-grown meat — as well as wobbly public opinion, with many still unconvinced by alternative food sources, will be tough to overcome. On the other hand, with overhyped investments like quick commerce or vertical farming dying or dead, it’s possible to see below the froth and identify the clear foodtech specialities on the rise in Europe (insect-farming and B2B marketplaces are two obvious ones). And with tech valuations cratering over the last year, investor appetite for relatively cheap bets may rise again with them.
Rising stars
Total funding
Undisclosed
Has developed a way to produce completely animal-free egg whites using a precision fermentation process, not unlike making beer or kimchi. It raised a €10m seed from Agronomics and Maki VC in February 2022, despite its product still waiting on regulatory approval.
Round
Seed
Valuation
Undisclosed
Date
2022
Size
€4.5m
Planet-based cheese producer — specifically, dairy-free burrata and stracciatella alternatives — that was backed by Seedcamp, Cherry Ventures, Outsized Ventures, Nicoya in its November 2022 £5m seed round.
Round
Seed
Valuation
Undisclosed
Date
2022
Size
€5.8m
A spin-off of the algae specialist Algama, Seafood Reboot is developing a range of plant-based seafood products from salmon and spreads to tuna, using algae as the main ingredient. It counts Demeter Partners, Senseii Ventures, Founders Future and Beyond Impact among its investors.
Round
Pre-seed
Valuation
Undisclosed
Date
2022
Size
€4m
WNWN’s (pronounced “win-win”) proprietary fermentation technology can create a full range of ethical and sustainable chocolate alternatives while using local and abundant ingredients, such as barley. It last raised in February 2023, in a round led by PeakBridge along with PINC, HackCapital, and Investbridge AgriTech.
Round
Seed
Valuation
Undisclosed
Date
2023
Size
€5.1m
Early stage startups to watch
Agroloop
Food system supply chain
Insect farming
€18m
€18m
-
Animal Alternative Technologies (AAT)
Biotechnology research
Cultivated meat
€3.4m
€3.2m
-
Better Dairy
New foods
Dairy alternatives
€22m
€20m
-
Blue Farm
New foods
Dairy alternatives
€5m
€3m
-
Bluu Seafood
New foods
Cultivated seafood
€7m
-
-
Cocuus System Iberica
Biotechnology research
Mimetic food
€2.5m
€2.5m
€18m
Entocycle
Food system supply chain
Insect farming
€10.5m
€5m
€23.4m
Fooditive
New foods
Plant-based food
€3.5m
€850k
-
Formo
New foods
Plant-based food
€44m
€40m
-
Gourmey
New foods
Cultivated meat
€57.3m
€48m
-
Greentech Innovators AS
Biotechnology research
Upcycled ingredients
€1.5m
€700k
€6m
Happy Ocean Foods GmbH
New foods
Vegan fish alternatives
€1.3m
€500k
-
Hoxton Farms
Cultivation system
Alternative animal fat
€23.2m
€20m
-
Innocent Meat
Cultivation system
Cultivated meat
€180k
€180k
-
Ivy Farm
New foods
Cultivated meat
€40m
€30m
€75m
JULIENNE BRUNO
New foods
Plant-based food
€6.9m
€5.8m
-
Karma Kebab
New foods
Cultivated meat
€1.4m
€1m
€5.5m
Libre foods
Cultivation system
Fungal mycelia
€2.2m
€2.2m
-
Lovely Day Foods (Makers of Perfeggt)
New foods
Plant-based egg
-
-
-
Meatable
New foods
Cultivated meat
€57.1m
€42.7m
-
Mushlabs
Cultivation system
Fungal mycelia
€24.1m
€15m
€35m
Mycorena
Cultivation system
Fungal mycelia
€35.1m
-
-
Neggst (Formerly Bettr Egg )
New foods
Plant-based egg
€4.8m
€2.8m
€25m
NOVAMEAT
New foods
Cultivated meat
€8m
€5.3m
-
OLALA! (ex Seafood Reboot)
New foods
Vegan fish alternatives
€4m
€4m
-
Onego Bio
Alternative protein produced
Animal-free egg white producer
€14.5m
€4.5m
-
Petgood
Pet nutrition
Vegan dog food
-
€2.5m
-
Rebel Meat KIDS
New foods
Cultivated meat
€2m
€500k
€5m
Revo Foods
New foods
Vegan fish alternatives
€1.5m
€1.5m
-
Revyve
New foods
Plant-based food
€13.5m
€8m
-
Solar Foods
Alternative protein produced
Bioprocessing of recombinant proteins
€69.1m
€34m
-
Stockeld Dreamery
New foods
Plant-based cheese producer
€19.8m
€16.5m
-
Tebrito
Food system supply chain
Protein products
€4m
€2.8m
-
Tempty Foods
New foods
Plant-based food
€330k
-
-
The Protein Brewery B.V.
Biotechnology research
Plant based nutritious
€26m
€22m
-
Time-travelling Milkman
New foods
Dairy alternatives
€1.5m
€1m
-
Tomojo
Pet nutrition
Vegan dog food
€3.5m
€3m
-
vly
New foods
Dairy alternatives based on pea protein
€5.1m
€4.5m
-
WNWN Food Labs
New foods
Chocolate alternatives
€5.1m
€5.1m
-
Europe’s success stories
Who early stage startups are up against
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
Became the world’s best-financed insect-farming business in 2022 following a $260m Series D led by Qatar Investment Authority, with contributions from existing investors Creadev and Temasek, alongside global agricultural commodity traders ADM and Cargill Created in 2016, Innovafeed operates two plants in northern France that convert black soldier fly larvae into insect oil and feed for pets, fish, chickens and pigs
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
Another French startup, which produces insects for both pet and human food Raised €160m in April 2023 — taking it to $439m in total — from Bpifrance, Robert Downey Jr. and Astanor Ventures
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
UK-based meal replacement startup that makes plant-based, low-carbon drinks, powders and protein bars Grew its annual revenue 40% in 2022 to $170m and raised a $24m Series B in December 2022 from investors including Idris Elba, valuing the company at $560m
Sources
Research notes/reports
1, 2 Food for Climate: The State of the Sustainable Food & AgTech Ecosystem in Europe | May 2023 | FoodLabs & Dealroom
State of the European Foodtech Ecosystem | March 2023 | DigitalFoodLab
The State of European Foodtech 2023 | January 2023 | Dealroom
Articles
Climate-focused food startups had a record 2022 | May 2022 | Sifted
Italy moves to ban lab-grown meat to protect food heritage | March 2023 | BBC
From ground to plate: Four investors on what’s next in foodtech and agritech | February 2023 | Sifted
Molecular farming: the newest trend among foodtech investors | January 2023 | Sifted
3 20 foodtech startups to watch, according to investors | January 2023 | Sifted
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