The rise of agri-foodtech in Italy: €167 million of investments in 2023

The first report on the state of Foodtech in Italy, released by Eatable Adventures, one of the main global accelerators in the Foodtech sector, and promoted by Verona Agrifood Innovation Hub, reveals that:

• Investments in the Italian Agrifoodtech ecosystem grew by 9.8% compared to 2022.
• There are currently 340 startups in the sector, indicating an emerging and highly dynamic ecosystem.
• Technologies for food production and processing constitute the core business of 36% of these startups.
• 66% of the sampled startups developed their technologies internally.
• 40% of the startups own at least one patent.

Verona, 15 February 2024. Eatable Adventures unveiled the first Italian Report on the state of Foodtech. The report is promoted by the Verona Agrifood Innovation Hub, the first development hub of the Italian Agrifoodtech ecosystem supported by Fondazione Cariverona, UniCredit, Eatable Adventures, Municipality of Verona, Veronafiere, Confindustria Verona and University of Verona. In the analysis, startups are the focal point of a survey that unveils the geographical and morphological distribution of startups and provides an updated overview of investments in the sector in 2023.

This report marks a significant milestone in the development of Italy’s Agrifoodtech ecosystem. With over 740,000 agricultural companies, 330,000 catering businesses, 70,000 food industries, and 4 million workers, the Italian agri-food market ranks as the 3rd largest in the European Union. In 2023, it generated more than 65 billion euros, equivalent to 3.8% of the total Italian economy.

It is therefore not surprising that many new entrepreneurial ventures are emerging, aiming to rejuvenate such a strategic sector for Italy. Currently, there are approximately 340 startups active in the Agri-Foodtech sector. In Italy, this market received investments totaling 167 million euros in 2023, compared to 152 million the previous year, reflecting a growth of 9.8%.

The identikit of Italian Foodtech startups: Northern Italy, agile teams, and pink quotas

The North undeniably dominates the landscape of startups in Italy: approximately a third (30.5%) are based in Lombardy, closely followed by Emilia-Romagna (11.1%), and then by Piedmont, Veneto, and Lazio, each contributing around 10%. Additionally, 50% of the total startups were established between 2022 (25.3%) and 2023 (22.8%). This trend initiated in 2018 (7.6%) and has experienced a notable surge since 2021 (19.1%), reaching its peak in 2022. This increase is not only attributed to the growing interest in utilizing innovation to address the significant challenges of the agri-food supply chain and shifts in consumption patterns but also to the emergence of ecosystem support initiatives and new investment tools for burgeoning companies.

Looking at the composition of the startups, compact teams of 1 to 5 employees account for approximately 69% of the sample, with up to a maximum of 6-10 employees for 13% of them. These companies boast an average age of 35.6 years, reflecting agility and a potential for further development over time. Notably, female talents play a fundamental role, with as many as 32% of the startups founded by one or more female founders. This statistic is particularly significant considering that the national average of female entrepreneurs is only around 10% of the total, while those with mixed teams do not exceed 16%. This observation not only underscores the presence of women in key roles within the food technology sector but also suggests that the industry holds a particular appeal and actively involves female quotas.

The must-haves of the sector: focus on production, food processing, brands, and patents

In their analysis of the Foodtech landscape in Italy, Eatable Adventures has classified startups into four distinct categories: Agritech (technologies applied to agriculture), Food Production & Transformation, Retail & Distribution (applied robotics, retail analysis platforms, new sales channels, etc.), and Restaurant Tech&Delivery (booking and management platforms; kitchen robots, etc.).

The startups in the Italian Foodtech sector are primarily concentrated in Food Production and Processing (36%), followed by Agritech (22.3%), Restaurant Tech & Delivery (22%), and Retail & Distribution (19.6%). Nearly half of the startups (43%) in Food Production and Processing focus on developing new products with innovative ingredients. Among Agritech startups, 33% have focused on creating new cultivation systems or crop automation systems (31.5%).

Another notable finding is that 66% of the sampled startups develop their technologies internally, without relying on collaboration with third parties. Only 12% of startups cooperated with universities, 2% with technological centers, and 13% with other external companies. This suggests that approximately 70% of startups demonstrate a high level of autonomous development, underscoring their strong technological maturity.

Among the most utilized technologies, artificial intelligence emerges as predominant, employed by 42.86% of the surveyed startups, closely followed by machine learning at a rate of 37.14%, and biotechnology at 32.38%.

To protect the intellectual property of their innovations, a crucial factor in ensuring competitiveness in the market, over half of the startups (54.3%) incorporate trademark registration into their business model. Additionally, 40% own at least one patent, while 19% rely on trade secrecy.

Investments in Italy: the state of the art

On a global scale, investments in Foodtech experienced a significant decline in the second quarter of 2023, plummeting by approximately 61% compared to the previous year. This downturn can be attributed primarily to geopolitical conflicts and the widespread economic crisis impacting all sectors. However, amidst this challenging landscape, the Italian market stands out as one of the most dynamic and resilient, recording a remarkable 9% growth compared to 2022. In 2023, Italian startups managed to secure 167 million euros in funding, with 43% allocated to the seed phase and 32.3% to the pre-seed phase. This substantial investment underscores the confidence of both national and international investors in the growth potential of the Foodtech segment within Italy.

Furthermore, among the prominent investments in Italy, notable are the training programs backed by companies like CDP Venture Capital Sgr and Eatable Adventures, which launched Foodseed, the first national accelerator in the Italian foodtech sector. In 2023, Foodseed selected and accelerated seven emerging Made in Italy companies, providing an initial investment of 170 thousand euros to each participant, with the potential for further increments of up to 500 thousand euros for the top performers. This pioneering program garnered interest from key industry partners, including Amadori and Cattolica, the Business Unit of Generali Italia, who supported the initiative.

Additional resources that could facilitate the development of the startups, as reported by those interviewed, include attracting international investors, receiving support from the Italian food industry, participating in international events, gaining knowledge of best practices, and streamlining access to public assistance.

“Italy is working increasingly hard to provide innovative responses to the pressures of climate change, the energy crisis, and the supply of raw materials. The objective is to improve the global competitiveness of the Bel Paese and maintain its primacy in food and wine excellence at a global level”, declares José Luis Cabañero CEO and founder of Eatable Adventures. “There are more and more initiatives involving food companies, startups, universities, and technology centers, supported by important investors. Italy aims to preserve and strengthen its competitiveness and is ready to embrace innovation with determination to shape a sustainable, efficient, and dynamic food future."

Report and Methodology

Eatable Adventures prepared this industry analysis using its own taxonomy, which classifies startups by value chain. This work was complemented by a classification and continuous monitoring of Italian startups throughout the year. To have a more complete picture of the foodtech landscape in 2023, a survey was also conducted among the startups of the Italian foodtech ecosystem. The data and conclusions of this investigation are presented in detail in this report. The methodology includes the use of a self-administered online questionnaire, with a focus on agri-food value chain startups based in Italy, involving a total of 105 surveys selected through simple random sampling. The survey was conducted from November 8 to January 5, 2023, presenting an error of +/- 4.34% with a confidence level of 95%.