A world in crisis, and an ever-hungry populace. As the economy crashed under the weight of the COVID-19 pandemic, one well-known commodity was up for the challenge: food.
Grocery store, kitchen, and fast-food employees were hailed as essential workers, keeping us fed as the global health crisis forced us to shelter in place.
Being couch-ridden would send demand for e-commerce into orbit, with meal kit and delivery services raking in the dough from the hungry and stressed.
It wasn’t just the thought of eating that made everyone rush to the dinner table, however. Many saw green, and not the leafy vegetable kind.
Venture capitalists invested in food and agriculture startups like never before, with the intersecting industries receiving a record combined $22.3 billion in venture funding in 2020, twice that of the year before.
“Within food tech, a number of subsectors benefited from a year where the freeze in travel, dining out, and enforced consumer saving helped drive a number of trends,” wrote Amara Kukutai, co-founder and partner of Finistere Ventures, which released a study on the agri-food tech investment in 2020.
In total, food tech companies raised around $17.3 billion from 631 deals, with 68% going to delivery and e-commerce companies. Meal kits were responsible for $6.2 billion while e-commerce raised $5.3 billion.
“Upticks in valuation across food tech as well as surging investments in delivery, meal kits, and e-commerce retail were notable effects of COVID-19 and the increase in dining at home,” Kukutai wrote.
IN THE KNOW
Agtech companies also benefited from a need for predictable yields, after farmers were forced to dump milk or produce that could no longer be shipped or kept. At the same time, grocery stores were left with barren shelves thanks to nervous customer hoarding.
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