The global agri-food-tech sector has seen a steep decline in investment, with funding plummeting by 73% from its 2021 peak, according to the latest FoodTech 500 report.
Despite this downturn, industry players are shifting focus towards sustainable and system-wide innovations, marking the emergence of what analysts are calling 'FoodTech Wave 3.0.'
The FoodTech 500, now in its sixth year, ranks the most innovative start-ups and scale-ups operating at the intersection of food, technology and sustainability. This year’s report, compiled from 1,420 applications across 52 countries, paints a stark picture of the investment landscape.
Total agri-food-tech funding has dropped from $61.2 billion in 2021 to just $16.1 billion in 2024, with deal volume declining by 58% in the same period.
While overall funding has contracted, a reallocation of investment suggests a shift in strategic priorities. Traditional downstream sectors, such as food delivery and alternative proteins, which once commanded 68% of total funding, now represent just 47%.
Instead, investors are increasingly backing upstream innovations, including agricultural biotechnology, precision farming, protein fermentation and upcycled ingredients.
The proportion of global agri-food-tech funding directed towards agricultural biotechnology, for example, has risen from 3.8% in 2021 to 6.2% in 2024. Precision farming solutions have seen a similar uptick, increasing from 2.7% to 6.6% over the same period. Meanwhile, fermentation-based protein alternatives and biotech-driven food processing methods are gaining traction as investors seek scalable, climate-friendly solutions.
Domains gaining momentum
Several domains have shown consistent upward momentum, including: biotech/synthetisation, ag biotech, protein fermentation, cellular agriculture and upcycled ingredients, food surplus and waste efficiency. The increasing focus on these sectors highlights a strategic pivot towards technologies that can enhance food sustainability, reduce waste and improve efficiency across the supply chain.
Cellular Agriculture has seen particular growth, with companies like Upside Foods and BlueNalu developing cultivated meat and seafood products. Meanwhile, protein fermentation is driving innovation in alternative proteins, with companies such as Nature’s Fynd and Perfect Day leading the charge. The biotech/synthetisation category is also expanding rapidly, with firms like Ginkgo Bioworks working on precision fermentation and bioengineered food ingredients.
Between 2019 and 2024, ag-biotech saw a CAGR of 8%, attracting over $1.13 billion in investment across more than 550 companies. Bio-tech-enabled food manufacturing, which includes cellular agriculture and fermentation, grew at a CAGR of 23%, receiving over $1.19 billion in funding across 480+ companies. Meanwhile, food-as-medicine and personalised nutrition solutions saw a 14% CAGR, attracting approximately $1 billion in investment across 645 companies.
The share of global agri-food-tech funding allocated to protein fermentation increased from 2.3% in 2021 to 3.4% in 2024, biotech/synthetisation from 3.9% to 5.1% and upcycled ingredients, food surplus and waste efficiency from 1.3% to 2.5%. This shift reveals investor confidence in upstream technologies and circular approaches, even as the overall funding pool has contracted.
Conversely, vertical and indoor farming has experienced a marked decline in representation among FoodTech 500 finalists, reflecting broader market challenges such as high operational costs, energy consumption concerns, and difficulties in achieving profitability. This shift suggests that investors are becoming more selective, prioritising areas that promise long-term scalability and commercial viability.
Survival in a selective funding environment
The contraction in venture capital has forced start-ups to diversify their financial strategies. Debt financing has grown from 3% to 7% of total sector funding, while grant funding has increased from 6% to 9%, highlighting a trend towards alternative investment models. Late-stage companies are under mounting pressure to demonstrate clear paths to profitability, prompting many to form strategic partnerships with established food manufacturers.
Despite financial pressures, food-tech start-ups remain resilient and innovative. The FoodTech 500 data shows that 74% of ranked companies are revenue-generating, with a combined $8.67 billion raised to date. Notably, 99% of this year’s ranked companies have secured external investment, underscoring sustained investor interest in long-term food system transformation.
The rise of 'FoodTech Wave 3.0'
The report identifies 'FoodTech Wave 3.0' as a defining industry trend, characterised by a holistic and systemic approach to innovation. Unlike previous waves driven by consumer-facing trends, this shift emphasises circular economy principles, waste reduction and integration of advanced biotechnology.
For example, investment in sustainable ingredients and circular economy solutions, such as upcycled food waste and carbon-sequestering agricultural inputs, has surged. Meanwhile, artificial intelligence (AI)-powered food processing and personalised nutrition technologies are gaining prominence as companies look to optimise production efficiencies and enhance consumer health.
A spotlight on cell-ag
One of the most closely watched areas in FoodTech is cellular agriculture, which is poised to transform protein production. The sector has made significant strides, with investments funnelling into lab-grown meat, seafood and dairy alternatives. Despite funding challenges, cellular agriculture companies continue to innovate, driven by advancements in tissue engineering, bioreactors and cost reduction strategies. 32 cell-ag companies made it to FoodTech 500's list, up from 23 in 2023.
The FoodTech 500 highlights a growing presence of cellular agriculture firms among this year’s finalists, reflecting industry confidence in the potential of cultivated protein. However, commercialisation remains a key hurdle. Scaling production to match conventional meat costs and navigating regulatory approvals are among the primary challenges faced by start-ups in this space.
Several FoodTech 500 finalists are pioneering advancements in cellular agriculture. Upside Foods, a leader in cultivated meat working on scaling its lab-grown chicken production, made it into the top ten. BlueNalu is focusing on cultivated seafood, aiming to address supply chain challenges in the traditional fishing industry. Meanwhile, Gourmey and Aleph Farms are developing high-end cultivated meat products, such as foie gras and steak, using cell-based techniques. Companies like Mosa Meat, Vow and Future Meat Technologies are also making significant progress in reducing production costs to enable commercial viability.
Other cell-ag companies that made the FoodTech 500 finalists include: Umami Bioworks, Galy Co (cultivated cotton), Cellmeat, Cellva Ingredients, Simple Planet, Forsea Foods, Nūmi, Hoxton Farms, Mewery, Multus, Ivy Farm Technologies, Biftek, UnReal Milk (fka Brown Foods), Steakholder Foods, Cellivate Technologies, Ever After Foods, ClearMeat, Meatly, BLUU, Upstream Foods, Bene Meat Technologies, Accellta, Opalia, Senara, Cellular Agriculture, Re:meat, Oppo Bio and E-FISHient Protein.
Nonetheless, industry leaders predict that as technological efficiencies improve and regulatory frameworks evolve, cellular agriculture could become a mainstream protein source within the next decade. Several countries, including the US and Singapore, have already granted approvals for cultivated meat products, signalling a shift towards market acceptance.
Looking ahead: A stabilising market?
Despite continued economic uncertainty, the food-tech sector is showing signs of stabilisation. While early-stage funding has become more difficult to secure, a growing number of companies are securing Series A investment. The report suggests that 2025 could see a gradual recovery, particularly for startups aligned with sustainability and resilience-focused strategies.
However, analysts caution that entrepreneurs must adapt to new funding realities, focusing on realistic valuations and strategic capital allocation. Policymakers, meanwhile, are urged to introduce regulatory frameworks that support circular economy initiatives and accelerate the adoption of sustainable food technologies.
