In 2018, European food tech and agtech startups raised $ 1.6 billion in funding across 421 deals.

While this was on par with the total in 2017, there was 23% growth in the number of deals and the majority of activity took place at the earliest stages, according to the Europe AgriFood Tech Funding Report released by AgFunder in collaboration with F&A Next.

Upstream startups

2018 also saw a 200% increase in funding to upstream startups – those operating closer to the farm or in the supply chain before the retailer. Upstream innovation is rapidly picking up steam in Europe, particularly in farm software and sensing technologies, as well as robotics and novel farming systems.

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Good news shared by @iamlbt from @AgFunder ... Don't pay attention to the 2018 investment figures for #AgTech. Upstream #AgTech startups are more and more backed by #Venturecapital funds and now take the lead. @fa_next pic.twitter.com/jIf9B8Y4iE — Cédric LOMBARD (@LombardCedric) 16 May 2019

The investor base supporting agrifood innovation is varied with only a few dedicated sector funds, but it’s growing and 603 unique investors made investments during the year.

More high quality agtech startups

“Indeed, more multistage investors are entering the Agrifood space, and in our programs we have been (fore) seeing and driving the trend for more high quality agtech startups,” says Jan Meiling from StartLife, a founder of F&A Next.

Some highlights from the report that was presented at F&A Next:

$ 1.6 billion of funding in 2018 across 421 deals with 603 unique investors. This represents 9% of global funding.

The food tech and agtech ecosystem in Europe is very diverse with a more even spread of funding across tech categories.

Upstream startups raised $ 0.9 billion, a more respectable 13% share of the global upstream total. Upstream includes Ag Biotech, Farm Software, Farm Robotics, Midstream Tech, Innovative Food, Biomaterials, Novel Farming Systems and Agribusiness Marketplaces.

Seed stage deals accounted for nearly 70% of deal flow, compared to 55% globally, and 15% of dollars invested compared to just 4% globally.

The UK and France lead the way in terms of investment: $ 388m across 103 deals and $ 324m across 62 deals respectively.

Italy was the third most active ecosystem with 31 deals, the vast majority at the seed and Series A stage.

CrowdCube, the UK crowdfunding platform, was the most active investor during the year making 13 bets while French firms followed with bpifrance making 11 and Seraphim 6.

The exit landscape was bolstered by the $ 2.4bn acquisition of French digital livestock technology Antelliq by Germany’s Merck.

Growing investor activity

“The European food tech ecosystem lags other markets today. However, we have every reason to believe that a healthy funnel of promising earlier stage companies, growing investor activity and availability of corporate venture capital will close the gap rather sooner than later,” says Jeroen Leffelaar from Rabobank, another F&A Next founder.