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A New Report Released By Saudi Arabia-Based Foodics Reveals That Foodtech Startups In The Middle East Have Raised Over US$2.6 Billion In Funds In The Past Two Years Time will tell if the venture capital winter has taken hold of the sector in 2023, but preliminary data for the year show a slowdown in foodtech exits.

By Erika Masako Welch

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You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

Saudi Arabia-based Foodics, in partnership with Lucidity Insights and Entrepreneur Middle East, has published a special report titled The Growing Business of Foodtech, which sheds light on the global foodtech industry and its unicorns, while also detailing the up-and-coming trends in the sector according to the latest funding data.

Globally, foodtech hit an all-time-high in 2021, when the sector raised a landmark US$46.8 billion across 1,987 deals. 2022 saw a market stabilization in that $21.4 billion was invested, which was typical of years before. Time will tell if the venture capital (VC) winter has taken hold of the sector in 2023, but preliminary data for the year show a slowdown in foodtech exits. By the end of Q1 2023, there were only 15 exits for VC-backed foodtech startups, which was worth a combined $1 billion. There were no initial public offerings (IPOs) and only one buyout, leaving mergers and acquisition (M&A) deals to make up the majority of exits during the quarter, indicating a period of consolidation has begun.

Image courtesy Lucidity Insights.

Due to the popularity of food delivery marketplaces, aggregators, and q-commerce players feeding consumers' appetites for quickly delivered groceries and ready-to-eat meals, e-commerce still dominates foodtech's deal activity around the world, but it is alternative protein or alt-protein players that have been steadily growing their share of investor funding in the past 18 months. If it's lab-grown meat via cell cultivation, or plant-based or insect-based meat, it seems investors are hoping the reduced ecological footprint, as well as lower time and resource cost will mean efficiencies to meet the world's ever-growing demand for protein. As the global human population grows from 8 billion to 10 billion by 2050, there will be much work to be done to ensure all mouths are fed, and little food produced is wasted.

Other hot trends discussed in this report include predictive analytics used in agtech, 3D printing food, personalized nutrition, restaurant software-as-a-service (SaaS), artificial intelligence minimizing food wastage, creating efficiencies in the supply chain, and new fintechs delivering quick financial aid to F&B establishments based on algorithms that determine ability to pay, which are in turn based on daily customer orders and point-of-sale (POS) data.

Beyond the global data, the report also highlights the regional heavy-weights in the foodtech scene, from UAE-based unicorn Kitopi, to expected "soonicorns," Foodics and UAE-based Pure Harvest, each of which have made the region's most funded foodtech startups list. Others like KLC Virtual Restaurants, Yango Tech, KASO, and Yango Delivery are carving out market-leading roles for themselves, and expanding methodically across the region. These are just some of the 356 foodtech startups from across the MENA region that have raised some kind of capital since January 2010.

Image courtesy Lucidity Insights.

To get all the market data, insights, and up-to-date stories on these remarkable entrepreneurial journeys, click here to download and read the full report.

This article was originally published on Lucidity Insights, a partner of Entrepreneur Middle East in developing special reports on the Middle East and Africa's tech and entrepreneurial ecosystems.

Related: Startup Spotlight: Saudi Arabia-Based Uvera Is Here To Rid You Of Your Food Spoilage Woes

Erika Masako Welch

Chief Content Officer, Lucidity Insights

Erika Masako Welch is the Chief Content Officer of Lucidity Insights.
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