eGrocery investment rollercoaster leads to 73% funding decline in 2022, still biggest category

eGrocery investment rollercoaster leads to 73% funding decline in 2022

eGrocery continues to be the largest subsegment in agrifoodtech investing, with a whopping $5.1 billion in funding secured in 2022, accounting for 17% of the total investment. However, this pales in comparison to the staggering $19 billion raised by grocery ecommerce startups in 2021, as highlighted in AgFunder’s recently published Global AgriFoodTech Investment Report.

In 2021, the sector witnessed four billion-dollar funding rounds, with Chinese online ordering platform XingSheng Youxhan receiving a staggering $3 billion, US ecommerce site Gopuff securing $1.15 billion, US food delivery firm Gorillas receiving $1 billion, and another $1 billion going to Gopuff.

However, in 2022, funding for eGrocery witnessed a significant decline of 73% YoY. Upon further analysis, it is evident that the three largest funding rounds closed in the first quarter of the year: Turkish rapid food delivery company Getir received $768 million, California-based eGrocer Weee! secured $425 million, and Indian hyperlocal delivery startup Dunzo received $240 million. Following these deals, funding across the industry started to dry up, leading to an overall agrifoodtech funding decline of 44% in 2022 to $29.6 billion.

Agrifoodtech investment by category in 2022. Source: AgFunder Global AgriFoodTech Investment Report 2023

Several eGrocery startups have recently announced layoffs, with some pruning staff after aggressive hiring in 2021, while others cited a drop-off in demand as pandemic restrictions lifted and consumers tightened purse strings amid rising inflation. “With eGrocery there have been supply chain challenges and cost management issues, and we’ve seen that the grow-at-all-costs model just does not work,” said Winnie Leung, of Shanghai-based agrifoodtech VC Bits x Bites, at the launch of AgFunder’s report in San Francisco.

Despite the challenges, Leung noted that the 2021 data was skewed by the XingSheng Youxuan megadeal and that investor focus in China is shifting further upstream. “We’re pleased to see a bigger push for upstream investments [further up the food supply chain]. China right now has basically two mandates that dictate all the investment: One is food security and self-sufficiency, and the other is sustainability,” she added.



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