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FoodTech investment plummets, but biotech and circularity are on the rise

The 2024 FoodTech 500 highlights a major shift in innovation focus, with functional ingredients, biotech, and waste upcycling climbing the ranks amid a steep drop in global funding.

Global AgriFoodTech investment fell by 73% between 2021 and 2024, dropping from $61.2 billion to $16.1 bn, according to data from Forward Fooding’s FoodTech Data Navigator. The number of deals also declined significantly, from 2,040 to 847. Despite this contraction, the median deal size increased from $3 million to $5 mn, indicating that investors are concentrating capital in fewer but more mature businesses.

The findings were published in March 2025 in the latest edition of the FoodTech 500, a global ranking of startups and scaleups at the intersection of food, technology, and sustainability. Max Leveau, chief operating officer at Forward Fooding, spoke to Ingredients Network about the key shifts this year’s list reflects.

“While investors are currently more risk-averse and selective, we anticipate this is part of a typical investment cycle – we are seeing the emergence of what we call ‘FoodTech wave 3.0’ and the redistribution of investments towards a broader range of technologies,” he said.

“Although it's uncertain whether we've reached the lowest point or if recovery will begin this year, we're confident investments will resume consistent growth within the next 18-24 months,” he continued.

The shifting funding landscape

Pre-seed and seed deals accounted for just 28% of total investments in 2024, down from 36% in 2021. Grants rose from 6% to 9% of deals, and venture debt increased from 3% to 7%, reflecting a move towards more “patient capital”.

Many of this year’s highest-ranked companies are operating with more diverse funding models. Leveau said traditional venture capital remains important but is no longer the sole pathway.

“As over the last few years venture capital has become less abundant, we see corporates have been more ‘reactive and receptive’ about startups, while governments are demonstrating greater proactivity in accelerating regulatory frameworks and initiating programmes to support startup ecosystems.”

Apeel Sciences, which tops this year’s ranking, has grown by combining public research funding from the government of Singapore, an initial grant from the Gates Foundation, and several rounds of private investment from venture capital firms and celebrities like Oprah Winfrey and Katy Perry. The company produces natural coatings that extend the shelf life of fruit and vegetables.

From food delivery to microbial ingredients

In previous years, food delivery and alternative protein companies received the lion’s share of agtech and foodtech funding, with more than two-thirds (68%) of investor money directed at these segments. In 2024, this dropped to less than half (47%). In their place, companies working on fermentation, waste valorisation, and biotech-enabled ingredient manufacturing gained prominence.

This shift is clearly reflected in this year’s FoodTech 500 ranking. For example, four protein fermentation companies ranked in the top 20: the Chicago-based Nature’s Fynd, producing ‘fungi-powered foods’; Chinese next-generation foods start-up Starfield; cocoa-free chocolate producer Planet A Foods from Germany; and precision-fermented egg protein producer Onego bio, based out of San Diego in the US.

Leveau sees strong growth in functionally improved, upcycled, and biotech-derived ingredients, primarily driven by increasing consumer demand for healthier and more sustainable alternatives.

“While it's still early to definitively assess manufacturer adoption rates, we're witnessing growing industry interest, particularly in cocoa alternatives, sugar alternatives and sugar reduction technologies, probiotics and ingredient innovations targeting gut health, and sustainably produced fat analogues.”

A broader trend is the growing number of entrepreneurs who are balancing technological innovation with nature's inherent strengths to provide solutions to food system challenges. Leveau notes that it’s clear that a one-size-fits-all approach is ineffective.

“Ultimately, success depends on scaling the right solutions in appropriate locations in an economically sustainable manner. For example, recent setbacks in vertical farming don't signal the death of the sector but highlight the importance of contextual implementation considering energy consumption, crop selection, and food security.”

New regions gain ground

The 2024 FoodTech 500 also highlights budding activity in emerging innovation hubs.

“The geographic distribution among 2024 FoodTech 500 finalists has remained relatively stable compared to last year,” says Leveau.

“Based on our analysis of the global AgriFoodTech landscape though, there are specific regions and countries that warrant close monitoring for their potential impact on the global AgriFood sector.”

‘Emerging AgriFoodTech hubs’ identified by Forward Fooding include Spain, home to more than 400 companies innovating across the supply chain and a bridge with South America. Several Spanish companies ranked in the FoodTech500, from plant-based meat developer Heura Foods at 5 to agtech company BrioAgro Tech at 484.

West Africa is another emerging hub, with a growing agtech focus and many companies working to optimise supply chains. Ghanaian startup WamiAgro, which provides smallholder farmers with digital tools and access to credit, and Nigerian B2B marketplace Vendease are examples of West African Foodtech500 finalists.

Other regions to keep an eye on include the Gulf Cooperation Council region, which Forward Fooding sees as an ‘upcoming desert tech hub’; Japan and South Korea, home to more than 500 companies with a promising cultivated meat and novel foods focus; and Brazil, which is betting on sustainable food production at scale.