The top 10 fund-raisings in agri-food cleantech companies last year saw a broadening of funded sectors and financing sources, as companies and investors adapted to a pull-back in venture capital funding and valuations, and new technologies stepped up.

An environmental transition in food production to date lags a low-carbon transition in energy, but faces growing policy and consumer tailwinds, to catch up, as a result of the contribution of farming to greenhouse emissions, biodiversity loss and water and air pollution.

At New Food Finance, we have identified 3,000 companies spear-heading this transition, from the production of alternative proteins, to sustainable crop inputs, as well as solutions in carbon sequestration, robotics, indoor farming, precision ag, crop breeding, and more transparent supply chains.

In all, we find that agtech and foodtech funding in the clean technology space has held up well, out-performing wider agtech and foodtech funding.

The agtech and foodtech funder and news company, AgFunder, reported that investment last year in agrifoodtech startups was at its lowest point in six years. New Food Finance focuses exclusively on an environmental transition, and doesn’t limit itself to startups, and finds that funding here was only fractionally below levels in 2020.

What do the top 10 deals last year show us, as a snapshot?

First, deals saw a diversification of funding sources, compared with the top 10 deals in 2022. Last year, three of the top 10 deals involved venture capital (VC) or private equity funds, compared with seven the year before. The balance of financing last year was met by debt-raisings (eg Upfield, Trimble and Oatly) and public markets (eg Above Food and Moolec).

Second, we saw bigger deals. Our top 10 last year raised $6.81 billion, versus $5.81 billion in 2022. This finding reflects our first: as smaller start-ups struggled to raise cash from VCs, the focus shifted to larger companies, including listed businesses.

Third, we saw a diversification of sectors.

The four biggest sectors across our database are alternative proteins (eg plant-based meat), precision ag (eg satellite-based crop monitoring), sustainable inputs (eg biological pesticides) and controlled environment agriculture (eg vertical farming).

In 2022, these four sectors accounted for all top 10 fund-raisings. Last year, our top 10 also included companies raising funding for sustainable livestock feed including methane suppressants (dsm-firmenich), as well as for integrated pest management (Biobest), and life science companies developing tech including for the breeding of climate resilient crops (PacBio).

Our top 10 snapshot suggests an environmental transition in food and agriculture is deep-rooted and broad-based, and as a result, resilient.