Venture Capital Opportunities in Food and Agricultural Technology (Quest Ventures)

Summary

• Venture capitalists globally invested USD$39.3 billion in food tech startups in 2021, driven by the challenge of feeding 820 million hungry people.p.1
• Lack of sufficient food leads to 25,000 deaths daily and undernourishment for 690 million people, generating healthcare costs of USD160B in the USA alone.p.3
• There are an estimated 500 million small farm households globally; small farmers operate 12% of farmland while producing 35% of the world's food.p.4
• The global ethical food market is currently valued at USD542B and is projected to reach USD742B by 2025.p.6
• Reaching global nutrition targets requires an average annual investment of $7 billion over the next 10 years beyond current annual spending of $3.9 billion.p.8
• In 2021, nearly 50% of all venture capital allocated to climate tech categories went to electric vehicle startups.p.11
• Global digital farming market size is forecasted to reach $10.2 billion by 2025.p.31

Key insights

1. World hunger is driven primarily by poverty and inequality rather than overall food scarcity.p.3
2. By 2050, humanity will require additional farmland equivalent to twice the landmass of India, reaching 70% of the Earth's total habitable land.p.5
3. Upstream food technologies raised more VC funding than downstream technologies for the first time in 2020.p.11
4. Smallholdings under 2 hectares make up 84% of all farms worldwide and supply 35% of global food.p.29
5. Microfinance institutions display repayment rates as high as 98% among low-income microloan borrowers.p.33
6. Fewer than 20% of smallholder farmers around the world currently have access to agricultural insurance.p.37
7. Beyond Meat and Impossible Foods held a combined market share of 49.7% of the USD1.4B plant-based protein market in 2020.p.45
8. Crickets require six times less feed than cattle, four times less than sheep, and two times less than pigs to produce equivalent protein.p.47