Agrifood tech companies in the Asia-Pacific region have raised $2.6 billion in the first half of 2023, a decline of nearly 50 per cent over the same period last year, according to the latest report by AgFunder.

Indian agrifoodtech companies raised $712 million during the same period and top deals included the $200-million fundraise by e-grocery firm Zepto and $104 million by Freshtohome. China reclaimed the top slot from India by raising $861 million during the period.

During 2022, Asia Pacific agrifoodtech start-ups raised $6.5 billion, down 58 per cent from the record-breaking $15.2 billion raised in 2021. Globally $30.2 billion was raised in 2022. India topped the agrifood tech funding in the Asia-Pacific region with $2.3 billion in some 216 deals in 2022, followed by China at $1.3 billion with some 115 deals. Since 2013, Asia Pacific agrifoodtech startups have raised $59.3 billion.

Investment in upstream agrifood tech innovations such as those operating on the farm and in novel food production actually increased both in 2022 and during the first six months of 2023, reveals the AgFunder report brought out in collaboration with the Bill & Melinda Gates Foundation, Omnivore and AgriFutures Australia.

The investment in start-ups operating upstream increased 24 per cent year-on-year during 2022 and this increase appears to be continuing in 2023, according to preliminary data. This is good news for the 450 million smallholder farmers producing about 80 per cent of the region’s food. For the first time in years, upstream funding, which provides technologies to farmers and primary food producers, overtook downstream investment. The former raised $3.2 billion in 2022 versus the latter’s $2.7 million, according to the report.

Investors’ choice

As the world’s largest region in both geography and population, with a vast network of smallholder farmers combined with dense urban settings and food sovereignty concerns, Asia-Pacific is a hotbed of opportunity for food and agriculture technology start-ups.

However, the downstream food delivery and restaurant start-ups, once the darling of the region’s agrifoodtech ecosystem, fuelling ten of billions of dollars of investment are no longer attractive to investors, largely a result of consolidation in the space.

Despite the global venture capital downturn, investment in upstream foodtech start-ups has increased as investors globally have fled to more defensive and deeper tech start-ups operating on the farm in areas of biotech, robotics, software and sensing. Even hyped-up categories like alternative proteins and indoor farming showed strength in Asia Pacific despite a global pull back in funding.

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