The annual Food for Climate Report by FoodLabs and Dealroom.co has analysed over 1200 VC-backed, climate-focused food startups across 40 segments, determining the state of the sustainable food and ag-tech ecosystem in Europe.
The results show that European climate food tech startups raised over $2 billion in 2023, surpassing the US for the first time. Alternative protein startups raised $365 million; within this, fermentation-based ventures saw a twelvefold funding increase compared to 2020, raising $76 million. In 2024, fermentation startups have already raised $12 million, becoming the third-most-funded segment and surpassing plant-based alternative proteins. This year has also seen an increase in mycelium-based alt proteins.
Alternative cocoa startups raised $69 million in 2023, more than twice the sum raised in 2022. Sustainable packaging and biomaterials startups also experienced significant growth, securing over $100 million; biomaterials alone saw 238% YoY growth.
“We believe that the emerging bioeconomy and scientific breakthroughs have the potential to solve some of the biggest food and climate issues,” said Patrick Noller, General Partner at FoodLabs. “Many companies are pioneering efficient, cost-effective, and eco-friendly proteins and alternative ingredients through precision fermentation, biomass fermentation, molecular farming, and cell culture.”
Novel ag-tech solutions
Sustainable ag-tech startups secured a huge $1 billion in 2023, while regenerative agriculture startups raised $581 million. Within this, biofertilisers were the most funded segment, largely driven by a $325 million round by renewable fertiliser producer Atlas Agro.
Looking at climate-focused food-tech startups as a whole, France led the European market, despite a 29% decline in funding. Belgium, Iceland, and Switzerland all saw impressive growth; however, funding is expected to return to pre-pandemic levels this year, mostly due to a lack of megarounds.
“In the face of rising food demand and escalating threats from extreme weather events, novel ag-tech solutions are being developed to optimize farming for climate resilience and future-proof our agricultural system,” said Noller. “These solutions include regenerative practices, climate-resilient crops, microbial solutions, and carbon dioxide removal techniques such as enhanced rock weathering. We are also excited about the growing number of water management and irrigation solutions.”
