For the longest time, food wasn’t considered disruptive enough for investment and remained researchers’ and large corporations’ playground. However, today, startups are innovating across the food supply chain, from seeds to food products, grocery stores, and health, reinventing how we grow, shop, and cook food – and getting funding accordingly. According to Dealroom’s data, global Foodtech VC investment increased more than 5x within the last decade, with Foodtech startups attracting $13 billion of funding in 2023 and multiplying their combined value 40x to reach $1.2 trillion. Most of which are still in the private market.
Global Foodtech Funding by Segment in 2023
To address its critical challenges in terms of food affordability, availability, quality, safety, and resilience, the UAE is sparing no effort and taking action on a multitude of levels, including a drive towards Foodtech development.
To start with, the UAE’s National Strategy for Food Security aims to make the country, currently ranked 42nd among 113 countries on the Global Food Security Index, the world’s best in this index by 2051, as well as one of the world’s Foodtech and Agritech hubs. With that objective in mind, the Abu Dhabi Investment Office (ADIO) is deploying $100 million in Agritech companies to support innovative farming solutions, while Food Tech Valley, Dubai’s government-led food technology centre launched in October 2021, unveiled last December at Cop28 an agreement with the ReFarm group of companies to build a gigafarm capable of growing more than three million kilogrammes of produce annually. The project, which will start in mid-2024 and is expected to be fully operational by 2026, will support the UAE’s move to decarbonise food production by replacing 1% of the country’s fresh produce imports. In the same context, Mohammed bin Rashid Al Maktoum Global Initiatives (MBRGI) announced the launch of the Food Innovation Hub UAE, the sixth hub launched by the World Economic Forum globally, to bring together all the stakeholders under the farm-to-fork concept as part of the sustainable food supply chain.
Meanwhile, Silal, a subsidiary of sovereign wealth fund ADQ, has joined forces with retailer GMG to sell more food locally grown by the 1,100 UAE farms contracted to Silal in GMG’s 120 UAE retail outlets.
The Private Sector at the Table
As the UAE’s Food & Beverage sector hits $7.63 billion in annual revenue and F&B manufacturing is set to reach $23.2 billion by 2025 according to a report by the UAE F&B Business Group, the country, home to over 2,000 food and beverage manufacturing companies, is emerging as a private food business powerhouse – Gulfood, set to open its doors once again on February 19, is now the world’s largest annual food and beverage sourcing event. In that context, the UAE’s Foodtech private sector is getting support too, with initiatives such as the FoodTech Challenge, a competition organised by the UAE Ministry of Climate Change and Environment and Tamkeen, offering substantial prizes; or newly-launched Agthia Ventures, a corporate venture capital fund designed to expand the innovation capabilities of Agthia Group, a diversified F&B company part of ADQ, while creating value for startups.
Talking about funding, the region’s Foodtech scaleups raised a combined $2.93 billion between January 1, 2021 and June 30, 2023 as per Crunchbase data – 70% of all Foodtech funding since 2010 in just 2.5 years – with food delivery (23%), Agritech (21%), restaurant SaaS (7%), Q-commerce (7%), and food production (7%) each taking home a chunk of the funding pie. Amongst the most notable players, delivery-only multi-brand restaurant platform Kitopi, founded in 2018 out of Dubai, has raised $805 million over the years and was valued to $1.55 billion as of May 2022; Pure Harvest Smart Farms, launched in 2016 out of Abu Dhabi, is one of the region’s soonicorns, having secured a total of $387.1 million as of 2023.
In short, the UAE is at the forefront of a transformative Foodtech revolution, driven by a convergence of factors. From ambitious government initiatives to startups pioneering advancements across the entire food supply chain, the country is laying the foundation for a more sustainable, efficient, and resilient food ecosystem. Through these concerted efforts, the UAE is not only shaping its own food landscape but also contributing to the global conversation around some of the most pressing challenges of our time.
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