European start-ups that aim to contribute to food security and protect the climate at the same time via innovative food and agricultural technologies performed well last year, in spite of global economic uncertainties, according to a new study.

Venture capital investors poured a total of 2 billion dollars into these industries, almost the same amount as in the previous year, according to an analysis compiled by data service provider Dealroom and Berlin-based start-up investor Foodlabs. According to the authors, this is the first time that the European sector has attracted more venture capital than the US sector. Their share of the global funding volume for innovative food and agricultural technologies totalled 58%. US companies had a share of around 35%. Start-ups from Asia accounted for just under 6%.

According to Foodlabs Founding Partner Christophe Maire, there are several reasons why investors in this field often bet on the old continent. „We benefit from a strong network of research institutions, universities and innovation centres that promote collaboration between science and industry,“ says the start-up investor. The region also has „a strong ecosystem for the protection of intellectual property and a pool of qualified talent in the fields of biotechnology, food science and engineering“. Last but not least, the EU is also doing an „excellent job“ by providing multiple direct and indirect subsidies for innovations.

However, Maire also sees room for improvement in some areas. For example, Europe needs more regulatory clarity and harmonisation in order to create a suitable environment for foodtech innovations. Simplifying the legal framework and ensuring uniform standards „could minimise the risks associated with political changes and ensure the competitiveness of European foodtech start-ups on the global stage“, he says. According to the study, the financing volume for European food and agricultural technology start-ups is likely to return to pre-pandemic levels in the current year.

The food tech scene is currently focussing on obtaining proteins for human consumption that are as animal-free as possible. The human body cannot produce certain amino acids itself and, unlike fat and carbohydrates, cannot store large quantities of the nutrient. The growing world population poses a challenge for the global food system. Start-ups are, therefore, working on various methods for the industrial and environmentally friendly production of alternative proteins. These include technologies for the production of plant-based proteins, fermentation technologies, the production of meat from cell cultures, and fungal mycelium technology.

The Hamburg start-up Infinite Roots, among others, has recently stood out in the latter category. The company was founded in 2018 under the name Mushlabs and raised 58 million dollars at the end of January. The company ferments so-called mycelium – which also the underground root system for mushrooms – using agricultural by-products such as mash or coffee grounds in bioreactors. This creates a protein-rich biomass that can be processed into food. Foodlabs is also invested in the start-up.