Innovative Food category nets $4.8b in 2021 thanks to alt-protein

Data Snapshot is a regular AFN feature analyzing agrifoodtech market investment data provided by our parent company, AgFunder.

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Startups developing alternative proteins, novel ingredients, and functional foods saw the most investment activity of any agrifoodtech category in 2021, according to the recently released AgFunder 2022 Agrifoodtech Investment Report.

More than 430 companies in the Innovative Food category, including familiar alt-protein names like Impossible Foods, NotCo, and BlueNalu, raised a total of $4.8 billion – 9.3% of the $51.7 billion pumped into all of agrifoodtech last year. Overall, category grew 103% year over year in 2021.

The Innovative Food category, as defined by AgFunder, covers startups developing alt-protein — including plant-based, cell-cultured, and fermentation-based — as well as functional ingredients and other novel nutrient sources.

Much of the Innovative Food category’s growth in the last few years is due to the Covid-19 pandemic, which highlighted zoonotic disease risks in conventional animal agriculture and caused disruptions in protein supply chains with which the world still grapples. Alt-protein is also often touted as a way to mitigate some of the negative climatic and environmental impacts of livestock production (though debate remains over their effectiveness in this regard.)

Top 20 Innovative Food deals, 2021

Impossible Foods bagged the Innovative Food category’s largest funding deal of 2021 with its $500 million November round led by Mirae Asset Global Investments, which had previously led Impossible’s $500 million Series F in 2020.

Other familiar names raking in VC investment during the year included fungi-based protein company Nature’s Fynd and precision-fermentation dairy player Perfect Day, which each raised $350 million. In cultivated meat, Israel’s Future Meat raised $347 million for its Series B round led by ADM with participation from Tyson Foods and Rich’s.

LatAm on the rise

Outside the large, mostly US-based firms in the category, Innovative Food companies are also emerging in other markets, underscoring the growing popularity of plant-based, ‘less-meat’ diets around the world.

Latin America is one such place. Chile’s NotCo landed $235 million for its artificial intelligence platform Giuseppe, which models novel combinations of plant-based ingredients; while Brazilian plant-based meat company Fazenda Futuro scored $58 million in Series C funding.

The region is also home to three of the world’s 10 largest meat producers — JBS, BRF, and Bachoco — which have made investments in alt-protein startups, or launched their own plant-based products. One significant deal last year saw JBS acquire a stake in Spanish cultivated meat startup BioFoods.