A fork in the road for European foodtech

Is food delivery past its sell by date, and is there fresh appetite for alternative protein and functional beverages? Some big shifts are underway among European foodtech startups and funding. With Five Seasons Ventures, our annual report dives into the state of the ecosystem, in data.

Report - The State of European Foodtech 2023

Flat enterprise value for foodtech ecosystem

The combined enterprise value of the European foodtech ecosystem is now $185B, a modest (considering 2022) 8% decrease since the end of 2021.

But this overall figure obscures two very different pictures for public and private foodtech companies. Public foodtech companies decreased in value by 35% in 2022, while the combined value of private foodtech companies continued to grow in 2022, by +34%. But in private markets too there is undoubtedly a lot of turmoil for foodtech.

Foodtech funding – opposing trends

European foodtech startups raised $5.6B in 2022. This is 64% lower than 2021’s total, or to put in context, a drop twice as big as that for overall venture capital. But here again the are starkly bifurcated trends. Food delivery, the largest segment within foodtech has suffered most in the post-pandemic period and the bursting of the instant delivery bubble. The rest of foodtech, however, raised slightly more funding in 2022 than in 2021.

If you were to exclude food delivery entirely, foodtech would have been one of the few industries to raise more funding in 2022 than 2021, with 3% growth year on year.

Within European foodtech, the momentum has also firmly swung from B2C to B2B. The combined enterprise value of European B2B findtech doubled last year, while B2C fell 22%. While B2C is still a much bigger portion of the foodtech ecosystem, B2B is catching up fast. Both B2C and B2B European foodtech startups also raised the same amount of capital for the first time in 2022 – $3.8B.

Growth areas for European foodtech

Geographically, major hubs London and Paris raised the most foodtech funding in Europe in 2022, but Vienna and Zurich were the fastest growing.

Startups working in functional beverages, alternative protein, B2B marketplaces, agritech, and enterprise SaaS within foodtech all raised more funding in 2022 than ever before. From Youtuber KSI and Logan Paul’s Prime Hydration, to rugby star backed fruit-infused Dash Water, and alcohol-free beer, functional and non-alcoholic beverages are a hot trend in foodtech right now, with funding growing a whopping 375% in 2022.

Likewise Alternative Protein remains a growing and diversifying trend. European alt protein startups raised all-time-high levels of investment in 2022, with $867M raised. Insect-based protein was the biggest segment for funding last year, followed by plant-based protein, lab-grown, and algae.

For more findings on downrounds, corporate investment and foodtech value chain breakdowns, download the full report:

Report - The State of European Foodtech 2023