Upstream agtech investment increased by 24% in 2022 in Asia-Pacific region: Omnivore report

India briefly overtook China in agrifoodtech investment, while Southeast Asia demonstrated significant potential with $1.7 billion in funding.

As the world’s largest region in both geography and population, with a vast network of smallholder farmers combined with dense urban settings and food sovereignty concerns, Asia-Pacific is a hotbed of opportunity for food and agriculture technology startups.

But in 2023, downstream food delivery and restaurant startups, once the darling of the region’s agrifoodtech ecosystem, fueling tens of billions of dollars of investment, are no longer so attractive to investors.

The new star of the ecosystem is upstream innovation, reveals a new report from leading agrifoodtech venture firm and research platform AgFunder, in collaboration with the Bill & Melinda Gates Foundation, Omnivore and AgriFutures Australia.

While total funding to the farm-to-fork agrifoodtech ecosystem dropped 58 per cent year-over-year (YoY) to $6.5 billion in 2022 from the record-breaking $15.2 billion raised in 2021, investment in startups operating upstream increased 24 per cent YoY. This increase appears to be continuing in 2023, according to preliminary data on 2023 funding flows.

This is good news for the 450 million smallholder farmers producing about 80 per cent of the region’s food. For the first time in years, upstream funding, which provides technologies to farmers and primary food producers, overtook downstream investment. The former raised $3.2 billion in 2022 versus the latter’s $2.7 million, according to the report.

The Ag Biotechnology category was particularly buoyant in the Asia-Pacific region in 2022, bringing in $813 million in funding, nearly half the amount raised globally in this category in 2022. While a couple of very large deals contributed to these totals, there was also greater deal activity in this segment, which includes on-farm inputs for crop & animal agriculture,” confirming investors’ growing interest in this space.

Innovative Food – the category housing the alternative protein industry – bucked the global decline in funding to the segment, with investment actually increasing year-over-year to $527 million, albeit over fewer deals.

Similarly, Farm Management Software, Sensing & IoT ($334m), Farm Robotics ($252m) and Novel Farming Systems startups ($254m), which include indoor farming and aquaculture and insect farming, brought in more funding across fewer deals.

China, meanwhile, lost its lead to India as the country attracting the most funding in 2022, likely due to the loss of downstream mega-deals that propped up China’s agrifoodtech investment in 2021. India’s lead looks to be short lived, however; in H1 2023, China grabbed the top spot back, raising $861 million.

The report includes deep dive sections on investment to startups in Australia, China, India, Indonesia and Southeast Asia. And spotlights on startups Zetifi, Integriculture, Eratani and Tablepointer.

India briefly overtook China in agrifoodtech investment,