Foodtech startups

and venture capital

Q2 2022

July 2022
 The first VC in Europe focused on innovative Global startup & venture capital
consumer-facing food companies. intelligence platform.

We back Food Tech entrepreneurs for a healthier, more Dealroom.co is the foremost data provider on startup, early-stage
sustainable and more efficient food system. and growth company ecosystems in Europe and around the globe.
Five Season Ventures is the first VC fund in Europe solely
Founded in Amsterdam in 2013, we now work with many of the
focused on investing in innovative consumer-
world's most prominent investors, entrepreneurs and government
facing food companies.
organizations to provide transparency, analysis and insights on
venture capital activity.

*Exited

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 Previous reports:
Foodtech startups and
venture capital – Q1 2022

The State of European Foodtech 2021

Deliveroo: An incredible ride to IPO

The State of European Foodtech 2019

The State of European Foodtech 2018

Page / 3
Following a record 2021, foodtech VC has cooled in Q2 2022 amid supply
chain volatility, war in Ukraine and an inflationary environment.

The combined enterprise value of Q2 2022 foodtech investment reached M&A activity has cooled, while IPOs
foodtech companies is $1.1 trillion. $5.7 billion, down 43% year on year. have all frozen.
Due to public market volatility at the start of 2022, The share of megarounds ($100M+) decreased since last With only 74 exits, this quarter saw fewer exits than
foodtech companies declined in value by 3.5% since quarter, while the share of investment coming from any quarter of 2021. With many companies putting
the end of Q1 2021. The cohort of companies early-stage rounds ($4-15M) increased. Enterprise their planning public debuts on hold, there were no
launched between 2015-now declined the most, software foodtech startups raised the most capital in Q2 traditional IPOs and only 3 SPACs in Q2 2022, the
9.6%. However foodtech value overall is still up +45% 2022, overtaking capital-intensive Delivery startups. fewest of any quarter since Q2 2020.
since the end of 2020.

Combined enterprise value by year Global VC investment by year Number of exits by year

$1.2T 110
$1.1T
$10B
74
$5.7B

Q2 Q2 Q2 Q2
2017 2021 Today
2021 2022 2021 2022

Page / 4 Source: Dealroom.co.

 “ Early stage food-tech has proved to be a relatively
attractive despite VC investment pullback.
With fears of recession looming, rising interest rates to battle, runaway inflation and the continued war in Ukraine and its negative
impact on the overall global outlook, venture funding in food-tech has unsurprisingly cooled off in H1 2022 compared with the
record levels of investment achieved in 2021. However, while not totally immune to macro-economic factors, early stage food-tech
has proved to be a relatively attractive sector compared with late-stage and tech growth stage sectors, which have experienced
much more severe pullbacks due to investors refocusing their efforts on less cash-intense businesses.

While it is very difficult to predict the future in such an uncertain environment, looking ahead, we expect consumer demand for
food products to remain strong but maybe, as seen during previous recessions, demand will become fragmented and polarised
driving sales of products at the bottom of the price range (retailers private label will do very well) and at the very top (premium and
well known brands) creating ample revenue opportunities for start-ups driving innovation, convenience and quality or service.

Ivan Farneti
General Partner & co-founder
at Five Seasons Ventures

Page / 5
The combined enterprise value of the foodtech ecosystem is down 3.5% since the
end of last quarter. Younger cohorts lost value, while older cohorts gained some.

Combined enterprise value of foodtech companies by launch year » view online

$1.5T

Cohorts, by year founded Change since 2022 Q1

$1.2T
$1.1T
$1.2T ▊ 2015-now $312B value ▼9.6% decrease

$1.0T
▊ 2010-2014 $384B value ▼3.3% decrease

$762B ▊ 2005-2009 $184B value – neutral

▊ 2000-2004 $122B value – neutral

$0.5T
▊ 1995-1999 $47B value ▲6.8% increase

▊ 1990-1994 $30B value ▲11% decrease

End H1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
2022

Page / 6 Source: Dealroom.co

 Year-to-date performance of selected VC-backed public companies

Global Agtech and Foodtech index

S&P500

Globally, public food and

agriculture companies
are down 18%
year-to-date putting
downward pressure on
valuations in the private
market.

Page / 7 Source: Dealroom.co

In 2022 Q2, global foodtech investment significantly cooled down. With $5.7 billion
raised, this quarter is down to levels last seen in 2019.

Global VC investment in foodtech by quarter » view online The biggest VC rounds of Q2 2022
▊$0-1M (pre-seed) ▊ $1-4M (seed) ▊ $4-15M (series A) ▊ $15-40M (series B) » view online
▊ $40-100M (series C) ▊ $100-250M ▊ $250M+

$15B

Virtual restaurants Point-of-sale Online grocery retailer

$300M $300M $231M

$10B
$10B
$9.1B
$7.7B
Ultrafast grocery Point of sale Vertical farming
$5.7B
$5B $4.8B $200M $170M $150M
$4.2B
$3.1B

Autonomous farm
B2B marketplace Farm management
robots

Q2 Q2 Q2 Q2 Q2 Q2 Q2 $110M $60M $45M

2016 2017 2018 2019 2020 2021 2022

Page / 8 Source: Dealroom.co

While IPOs have frozen almost entirely,
smaller cap M&As are still taking place
amid market consolidation. Biggest food tech exits in Q2 2022: » view online

Number of foodtech exits

▊IPOs and SPACs ▊ M&A
200

150

100

50

Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2
2015 2016 2017 2018 2019 2020 2021 2022

Page / 9 Source: Dealroom.co The stats include companies in the process of going public through SPAC: link
The share of megarounds ($100M+) decreased since last quarter, while the share of
investment coming from early-stage rounds ($4-15M) increasing.
Global VC investment in foodtech by quarter » view online
▊$0-1M (pre-seed) ▊ $1-4M (seed) ▊ $4-15M (series A) ▊ $15-40M (series B)
▊ $40-100M (series C) ▊ $100-250M ▊ $250M+

100%

80%

60%

40%

20%

Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Page / 10 Source: Dealroom.co

Only 1 new unicorn was created in Q2 2022, down to 2019 levels.

Number of new foodtech unicorns » view online

12

10

Q1 Q1 Q1 Q1 Q1 Q2
2018 2019 2020 2021 2022 2022

Page / 11 Source: Dealroom.co

Median round sizes across all stages have not yet decreased - and in Europe, median
round sizes at the Series A/B and B+ stage are now on par with deals in the USA.
Median round size by stage and geography
▊ Europe ▊ USA

Seed Series A / B Series B+

$2.0M
$25M $60M

$20M
$1.5M

$40M
$15M
$1.0M

$10M
$20M
$0.5M
$5M

2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022

Page / 12 Source: Dealroom.co

VC investment in food-tech decreased in all regions except the US, with China experiencing
the most severe decline.

VC investment in foodtech by region ($B) » view online

India United States Europe China

$2.7B

$0.9B $0.9B

$0.05B

Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q1
2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022

Page / 13 Source: Dealroom.co

Amongst the top 10 most active investors in Q2 2022, some have accelerated their
investment activity as compared with Q2 2021, while others have slowed down.
Number of rounds
⬤ 2021 Q2 ⬤ 2022 Q2

Foodlabs

Blue Horizon

Venture Catalysts
Alpha JWC Accelerated
GV

Demeter Partners

Gaingels
Lever VC

Big Idea Ventures Slowed

Tger Global
down

2 4 6 8

Page / 14 Source: Dealroom.co

Dealroom Startup Signal

Dealroom has launched a powerful predictive algorithm to

discover the most promising companies, Dealroom Signals.
Despite a downturn quarter in funding, thereʼs still potential for
investment opportunities. Donʼt miss out on up and coming startups,
and stay ahead of the market with Dealroom Signals.

The input for each Signal's algorithm includes company growth (team
size, product growth), job openings, completion score and contextual
data (does the company fit into segments of interest), timing (is the
startup likely to raise their next round soon) and team composition.
Enterprise software foodtech startups raised the most capital in Q2 2022, overtaking
capital-intensive Delivery startups.

VC investment by category - Q2 2022

Enterprise SaaS $1.7B

Delivery $1.6B

In-store retail tech $1.4B

Online supermarkets $0.9B

Alternative protein $0.6B

Point of Sale technology $0.5B

Vertical farming $0.4B

Cloud kitchens $0.3B

Farm management $0.2B

Direct-to-consumer $0.2B

B2B marketplaces $0.1B

Page / 16 Source: Dealroom.co

Point-of-sale tech grew the fastest, while capital intensive categories like food
delivery, groceries and DTC collapsed.

VC investment Q2 2022 vs. Q2 2021

Point of sale 222%

Vertical farming 45%

Enterprise Saas 31%

In-store retail tech 8%

Alternative protein – 24%

Online supermarkets – 47%

Delivery – 53%

B2B marketplaces – 63%

Dark kitchens – 66%

Farm management – 66%

Direct-to-consumer – 66%

Page / 17 Source: Dealroom.co

The global restaurant point-of-sale terminal market size was
valued at $17 billion in 2021.
Restaurants are fully open again. During Covid-19 food delivery was a
lifeline to struggling restaurants. This year, though, food delivery is in
decline. In response, restaurant owners and operators are focusing on tech
solutions like point-of-sale (POS) software that help them make better
business decisions, increase sales and improve customer experience.

There are roughly 75 and up POS startups globally, the combined enterprise
value of which is $2<9.8B. Between 2019 and 2020, the combined enterprise
value of this category tripled, which makes sense as restaurants rushed to
offer fully digital and contactless experiences.

The first half of 2022 is expected to be a record-breaking half-year with

$482M of VC investment in foodtech POS startups. Noted however, 2
mega-rounds made most of the total - SpotOn with $300M Series F and
Foodics with $170M Series C.
But there is massive potential ahead for untapped users, as the sector's
leading Toast counts only 6% of the 870K restaurants in the USA as clients.

Open 75 foodtech POS startups

Source: Dealroom.co.
Regenerative Agriculture
The loss of fertile soil poses a threat to food production in the future. Soil
erosion is already costing USA farmers as much as $100M per year. Startups
and scaleups could provide a tech solution to a global issue by developing
and innovating regenerative agriculture, which consists of farming practices
that help rebuild organic soil and biodiversity.

The combined enterprise value of the regenerative agriculture market is

$6.1B, 90% of which is contributed by the unicorns Indigo and Pivot Bio. VC
investment in regenerative agriculture has been relatively small and volatile.
However, Pivot Bio's $430M Series D last year is a sign of how lucrative the
opportunity could be.

Some other companies within the sector include Agreena, which issues CO2
certificates to farmers who switch to regenerative agriculture practices, and
Loam Bio uses microbes to isolate carbon in farm soils. It increases the
plants ability to store CO2 in the soil, making the capacity permanent. Even
major food and beverage companies like Nestle, Mars and PepsiCo have also
started initiatives on regenerative farming.

Open 29 regenerative agriculture

startups

Source: Dealroom.co.
Explore the key themes
driving Foodtech.
Find more in our landscapes:

» Online groceries

» Food waste

» Alternative protein

» Insects

» More ...

Source: Dealroom.co.
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Source: Dealroom.co.