Aug 11, 2022

AgFunder: U.S., California continue to dominate agrifoodtech funding

The U.S. still attracts the bulk of agrifoodtech capital, according to AgFunder’s 2022 AgriFoodTech Investment Report, and California, which saw a $4.1 billion jump in 2021, dominates U.S. funding.

Startups in the U.S. raised $21 billion in 2021 across 1,062 deals, accounting for 41% of investment capital for agrifoodtech.

At the state level, California agrifoodtech investment is boosted by its agriculture industry and Silicon Valley venture capital roots. Startups in the Golden State raised $9.7 billion in deals in 2021, up from $5.6 billion in 2020. Notable names in agrifoodtech, from alt-protein companies like Impossible Foods and Perfect Day to ag biotech startup Pivot Bio, call California home and were among the top agrifoodtech investment deals in 2021.

California’s lead in the states is billions ahead of the next-largest agrifoodtech investment state, which in 2021 was Pennsylvania. It should be noted, though, that the lion’s share of this fundraising went to Philadelphia-based “instant” grocery startup GoPuff, which raised more than $2 billion in 2021.

New York, which accounted for $2.5 billion in deals, is by far the most diversified market on the list. Its top 10 deals include six upstream businesses, among them vertical farming startup Bowery Farming’s $300 million Series C raise. Augury, a midstream supply chain-focused tech company, biomaterials company Modern Meadow, and climate insights provider Gro Intelligence also garnered deals and boosted the New York agrifoodtech sector’s prominence.

Massachusetts, which has a thriving startup scene in Boston, dropped from second to fourth in 2021, though it still brought in $1.1 billion in deals from bioengineering, robotics, and AI companies.

Finally, Illinois startups scooped up $1.1 billion, up significantly from 2020’s $358 million in fundraising. Investors funded 50 different deals for Illinois startups in 2021, with notable companies including alt-protein Nature’s Fynd.

Top deals overall in the U.S. were dominated by eGrocery – specifically GoPuff’s aforementioned billion-dollar raises along with smaller rounds from Weee! and JOKR.

However, eGrocery has lost a lot of its steam since AgFunder’s report was first published; in the current downturn, more investors are putting their faith in climate tech, which largely includes upstream technologies closer to the farm and lab.