12 September 2022
The ASEAN region contributed 7% of the global Food Market in 2022 and around 7.9% of Net investments to global Agriculture in 2020 (latest available).
The FoodTech industry (the use of cutting-edge technologies to develop, manufacture, and distribute food products in the food industry) can be categorised as upstream, mid, and downstream, where Upstream involves farming and farm management while Mid-stream is about distribution and logistics. The widespread downstream consists of agriculture marketplaces, e-commerce platforms, Foodservice, and delivery, etc. This report mainly discusses on the Upstream of Food Tech which is AgTech and Food Science.
Despite the rapidly growing prominence in ASEAN’s Food and Agriculture sector, only 2.5% of the 71 million small-holder farms in the region use digital technology solutions to improve yields. However, North America, which is the largest AgTech market in the world widely utilises agriculture technology to improve yields and productivity. As such the ASEAN region is yet to attract more investments in FoodTech Upstream which is AgTech and Food Science.
By 3Q 2022, the ASEAN region accommodated around 400 FoodTech Upstream (mainly, AgTech and Food Science) start-ups that were founded after 2005, out of which the majority are in Singapore and Indonesia. The region accounted for only 2% of the total number of start-ups in the AgriFood tech industry around the world and lagged the regions like North America, Europe, and East Asia.
During 2021-22, around 367 AgriFoodTech start-up funding deals occurred in ASEAN region, out of which 275 deals were at the SEED stage and Early stage, signaling more investments to stem in coming years. ASEAN’s biggest AgriFoodTech funding deal of 2022 was Alpha JWC Ventures and Northstar Group’s Series C injection (USD 139.2) into Indonesia-based Farmer’s Marketplace startup Sayurbox. This was also the all-time highest funding to AgriFoodTech start-ups in ASEAN.
The cumulative investment requirement for Food and Agriculture upstream in Asia will be at USD 800 billion during 2020-30, according to the Asia Food Challenge Report, 2020 by PwC, Rabobank, and Temasek. Out of which, ASEAN will represent around 17% of the cumulative Agri-food investment requirement in Asia by 2030, which will be USD 136 billion. In 2021, the existing investment in Food and Agriculture was around USD 150 million.
This massive transformation showcases numerous commercial opportunities for investors, particularly a broader requirement for innovation and adoption of new technologies, which is AgriFoodTech.
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