2021, a boom year for FoodTech in Europe

Such a level of growth had never been achieved before. In 2021, investments in European FoodTech were multiplied by three compared to 2020, amounting to 9.5 billion euros. This increases the share of the Old Continent in the global ecosystem of innovative startups in the food sector from 12% in 2021 to a record level of 20% in 2022, notes the strategic analysis firm DigitalFoodLab in the fifth edition of its annual report on the subject.

This growth is the result of an increase in the amounts invested. Between 2020 – a year of stagnation – and 2021, the number of fundraisers of more than 1 million euros increased by 59%, and the median investment doubled, reaching 1.8 million euros, notes the firm, while emphasizing that increased investment “is not only made by ‘giant lifts’ but also by very many ‘medium lifts'”.

The number of active startups has continued to grow at an almost constant rate of 8% since 2017. But 2021 has seen the number of unicorns more than double, which now stands at 13.

2.9 billion in quick trade

This prosperous year was mainly driven by an emerging segment: grocery delivery startups which, along with the oldest meal delivery startups, constitute “the central element of the European FoodTech ecosystem”, by concentrating 60% of investments.

Much of the money raised was notably captured by a handful of new “quick commerce” leaders, specializing in the super-fast delivery of groceries through the operation of a myriad of small urban warehouses. While this model was still almost non-existent just two years ago, in 2021 they managed to raise “exactly the same sum (2.9 billion euros) as the entire FoodTech ecosystem in 2020”, notes DigitalFoodLab.

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A significant example is that of Gorillas, a quick commerce company founded in Germany in 2020. Active in several countries, it has already raised 1.2 billion euros and has just acquired the French meal delivery company Frichti.

1.6 billion euros has nevertheless also benefited another growing category of delivery: the “new distributors”, start-ups which develop shopping e-commerce platforms to deliver products from stores or even closed. 1.4 billion was finally pocketed by companies initially oriented towards restaurant delivery, which are however also increasingly oriented towards grocery delivery.

Potential leaders in all fields

But all components of European FoodTech are booming, according to DigitalFoodLab, which sees a difference “striking” compared to previous years: “the virtual absence of trends where the European FoodTech ecosystem is lagging behind”.

All fields (from the agriculture of the future to apps helping consumers to eat better, through new food products, catering services, supply chain innovations) even include European startups likely to become in a few years of leaders, bets the cabinet. Ten to twenty companies have “the potential to become unicorns in the next 24 months”.

“All the pieces are now in place for the development of a world-class ecosystem,” concludes DigitalFoodLab.

However, one segment stands out in particular: “the sector around new food products (from disruptions on alternatives to proteins to product innovations of ‘direct to consumer’ brands) (which) is today perhaps the one with the most growth potential in Europe”.

While “before 2020 investments were concentrated upstream (around agriculture) and downstream (distribution), now we are witnessing a sustained growth in the amounts invested in processing”, analyzes the firm.

In this category, which “allows both to launch quickly on the market with few means and also to target long-term revolutions”, both the number of startups and the amounts of investments are increasing.

France, a special ecosystem

As for geographical areas, on the other hand, the landscape is increasingly concentrated. In 2021, more than 50% of investments went to startups located in five countries or regions: Germany, the United Kingdom, France, the Netherlands and the Nordic countries (Denmark, Finland, Norway, Sweden) .

Pioneers of European FoodTech, they continue to benefit from the advantage coming from the maturity of their startups, which attract the most important investments. Apart from these main hubs, other local ecosystems are struggling to emerge.

In this context, France stands out from other ecosystems. Despite the good raises of Cajoo (40 million) and La Belle Vie (25 million), and although Paris is one of the target markets for e-commerce startups, French FoodTech is not driven by the delivery.

The strongest investments concern catering services, and in particular the digitization of payment, with the emergence of startups such as Swile and Sunday which border on FinTech.

Agriculture also occupies an important place, in particular with the development of start-ups producing insects intended for animal feed. In this field, France has three leaders: InnovaFeed, Ynsect and Micronutris, which in 2021 achieved the largest fundraising (100 million euros) outside of delivery.

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