Like many other venture-backed sectors in recent months, investment in food tech has largely been quiet over the past few months.
Sure, there have been some bigger deals in the third quarter, for example Meati Foods grabbing $150 million for its mushroom root-based meat (still the best alternative protein food photo I have seen since I started covering this sector two years ago). Planted also took in $72 million for its whole cuts of vegan chicken, and Oatside, Singapore’s first oat milk product, raised $65 million.
However, for the most part, investment has been down, with PitchBook reporting last week that for the third quarter, there was $2.7 billion injected into 269 deals. PitchBook considers “food tech” to include everything from plant-based products to grocery tech, so it’s a pretty broad definition.
The data and research company noted that both investment values and count were down 63% and 28.5% quarter-over-quarter, respectively. And, “deal values declined for the fourth straight quarter, falling to a 10-quarter low, and to levels not seen since Q1 2020.” Ouch.
The Good Food Institute pulled out alternative protein deals and found that $420 million went into those companies during the third quarter. That’s down from $833 million in the second quarter and $911 million in the first quarter, according to GFI’s analysis of PitchBook’s data.
While that might scare away some VCs, others are sticking with it.
Elly Truesdell, founder and managing partner at New Fare Partners, said via email that some tech investors in the last decade overlooked some crucial fundamentals like taste, brand and consumer trust when betting on food tech companies.