State of UK AgriFoodTech in 2022

At the end of October Forward Fooding in partnership with Huckletree published their first AgriFoodTech in the UK ecosystem report. Whether you work in the sector or are just interested in the future of food it’s worth reading the whole report on your next lunch break (download it here).

There are some blockbuster pieces of data in these pages, and we decided to give you a rundown of some of our big takeaways.

UK AgriFoodTech is a giant, with unicorns

The scale of this sector is simply incredible. The UK AgriFoodTech sector is the largest in Europe with a community of 709 startups. It also comes top of the league as the stable for 6 (!) AgriFoodTech unicorns.

And the money is flowing too. The UK is the largest funding ecosystem helping raise €5.1 billion in 2021-2022 after a record 2021.*

*This was actually true across the board for UK tech with over £29.4 billion invested across startups and scaleups in 2021. And it wasn’t just the UK that saw this pandemic bump, in the US they had broken records for funding by September.

Inevitably as the world pivoted to online life, investors were keen to capitalise on companies that were helping people connect, work, shop and amuse themselves while stuck at home.

Food delivery holds the largest slice of the pie

AgriFoodTech is an incredibly broad sector that includes on-demand delivery technologies, agriculture technology, food processing innovations, next-generation food and drink development, food safety solutions, tech that helps agrifood businesses function (both tools that are internally facing and those that connect them with customers) and companies tackling waste management issues.

It was food delivery though that came up tops netting more than half (55.9%) of the overall funding. After a pandemic spent bringing the world to your home it wasn’t surprising to us that these marketplace technologies caught the eye (and wallets) of such a large number of investors.

The next two highest-raising areas lagged further behind with Agtech (19.3%) and next-gen food & drink (10.5%).

Something that caught our eye was the huge amount of companies in the next-gen F&D space. Over a quarter of all businesses in the UK AgriFoodTech sector are next-gen F&D, that’s a remarkable amount of innovation! Since launch we’ve been lucky to spend time with some of the entrepreneurs creating solutions, people like envoPAP who create sustainable packaging from discarded agricultural fibres or Angry Monk who rescue imperfect and surplus produce.

Brexit rears its ugly head. Again.

• If you’re not interested in our political take then look away now but the shadow of Brexit was all over this report. Here are a couple of the ways it played out:
  
  The report postulated that the comparatively small number of Agtech startups in the UK versus continental Europe could be due to our severed ties with the EU. Through the Europe Common Agricultural Policy the bloc put a strong emphasis on sustainability, and they expect agricultural companies to do the same. The UK’s more lax take – hello scrapping post-Brexit subsidies for improving biodiversity and meeting climate targets– could be part of why this sector isn’t growing at the same pace. Thoughts on that? We’d love to hear them! Drop us a note on social media.
• 
  Like in other parts of the economy, Brexit has had a dramatic impact on hiring European tech professionals for startups. That’s a sad loss for the UK.
• 
  A survey from Eurostat put a number on the reduced flow of goods, showing that UK exports to Europe have fallen by 14% in 2021 vs 2020.
• 
  And then there’s the reduced research funding from Europe. As the government and Brussles continue to wrangle over Horizon funding access, Forward Fooding reported that the uncertainty may lead academics to relocate. That lower research productivity will affect our universities’ ability to attract the kind of research minds that will help shape the UK agrifoodtech sector.
  

So what’s next for AgriFoodTech? The amount of innovation that we see in communities like Forwarding Food gives us all a lot of hope for the future, but we loved this quote from Belinda Clarke, director of Agri-TechE about where that next challenge could be found:

“There are some Holy Grails which remain – not least generation and management of on-farm energy, better insights into managing soils health, learning how to manage with access to less water, reducing the dependence on the Haber process to generate nitrogen fertilizers, real-time monitoring of soil nutrients......there is still a lot of head space for innovation but this is all technically challenging and expensive to deliver at scale.”

Here’s hoping for another great year for the AgriFoodTech pioneers out there.

Again, don’t just take our word for it. These are just a few of the insights from an important report, go check it out.

Victoria Yates is the Head of Communications of Greener