New figures indicate that the food industry has seen a distinct shift in funding from the early part of the decade, compared to the latter period.
According to latest information from Oghama Partners, between the years 2012-2017 the industry recorded £312.4m invested into 304 companies over 583 investment rounds. However, between 2018 – 2022 the funding increased six-fold to £1.8bn.
Oghama Partners said it views this progression as a healthy reflection of businesses maturing and investors backing perceived growth winners.
The total number of companies who received investment in the latter period was 449, with 1017 capital raises, highlighting that each company is having more and larger investment rounds.
The top 4 companies (by money raised) across 2018-2022 accounted for 24.8% of all investment over the last decade.
Oghma explained that a greater appetite for risk, combined with technological changes by new businesses, on various trending areas such as direct to consuming (D2C), meat free and agribusiness, has led to a significant change to venture investing in the food industry over the latter half of this decade.
D2C companies recorded a relatively low number of deals in both time periods, however, these companies experienced the second highest total by deal value. This flow of investment level has accelerated over the last five years as D2C businesses have benefitted from investor interest.
Easing of activity
Mark Lynch, a partner at Oghma Partners said that whilst 2022 appears to have seen the “investment momentum” continue, he believes that “with a changing risk dynamic, the appetite for all venture investing will wane.”
He added: “Layered on top of this potentially decreasing interest from investors is a cost-of-living crisis that appears to be challenging some D2C business models. As a result of the aforementioned factors, we expect some easing on the record levels of activity seen of late in the near term at least.
“However, the technological developments applied to some areas of the food sector over the last decade will likely generate continued investment opportunities and activity over the long-term.”