It becomes evident that investments are on a downward trajectory, and we have yet to reach the nadir. The forthcoming 6 to 12 months are poised to be challenging. This decline signifies that certain startups are struggling to secure the necessary funding, resulting in their unfortunate demise.

However, it is crucial to acknowledge that investments serve as a rudimentary gauge for investors’ diminishing appetite for FoodTech. As elucidated in the report, a shift in focus is transpiring, as previously hyped categories such as vertical farming or quick-commerce wane in popularity, making way for novel trends in the form of new beverages, virtual restaurants, and B2B marketplaces. Contrary to prevailing narratives, this shift is not necessarily indicative of a “healthy and rational return to a normal situation.” The emergent hype categories do not inherently possess superior qualities, revenue-centric approaches, or a greater propensity to tackle real-world challenges compared to their predecessors.

To evaluate the state of the ecosystem more accurately, valuations—the monetary worth required to acquire a company—provide a more comprehensive assessment. However, accessing such information proves arduous, as it is often guarded and confidential. Nonetheless, there are some clues derived from recent deals or rumors:

1. Flink is contemplating acquisition by Getir or raising fresh capital at a valuation of $1 billion, a decline from its previous valuation surpassing $2 billion in late 2021.
2. Swiggy, one of India’s prominent food delivery startups, currently carries a valuation of $11.5 billion, half of its preceding $22 billion valuation.
3. Ynsect recently secured €160 million in funding, yet its specific valuation remains undisclosed, hinting at a potential reduction.

By examining these instances and others, it appears that valuations may have been reduced by up to 50%. However, does this accurately reflect the “real value” of these startups in today’s market?

Beyond fragmentary information concerning private startup deals, a clearer perspective can be obtained by examining publicly traded companies. These entities witness daily exchanges of stocks amongst numerous investors. Let us consider nine “iconic” former FoodTech startups that underwent initial public offerings (IPOs) over the past decade:

• Collectively, their IPO valuation amounted to $130 billion.
• At their peak valuation in 2021, their combined worth reached $263 billion.
• Presently, their valuation has plummeted to $59 billion.
• Thus, within a span of less than two years, these nine companies witnessed the obliteration of $200 billion in value. To contextualize this figure, it is roughly equivalent to Greece’s Gross Domestic Product (GDP).

This staggering decline translates to an 80% loss in value for these startups, far exceeding the plight experienced by private startups. Some have been more severely affected than others, with AppHarvest serving as a prime example, having endured a 99% reduction in its value—a stark manifestation of the challenges encountered by vertical farming ventures.

From these observations, we can distill three critical insights:

1. In the short term, it is evident that many private startups are still overvalued, and we have yet to witness the conclusion of the necessary “cleaning” process. Private markets inherently exhibit a slower pace of adaptation to new realities compared to their public counterparts.
2. Regarding the majority of these nine startups, their valuation has not yet bottomed out. While it may be overly optimistic to discuss an imminent rebound, recent results and the overall sentiment indicate a more positive outlook than what prevailed six months ago. If a rebound materializes, it will undoubtedly reverberate throughout