Bits x Bites News
Just Released: China AgriFood Startup Investing Report
The first report on startup investment in China’s agriculture and food startup sector has been released. The China AgriFood Startup Investing Report was created jointly by Bits x Bites and US-based online venture capital investor AgFunder.
According to report data, Chinese agrifood startups raised $1.8 billion in funding in 2017, and at least 198 investors participated in 177 deals over the course of the year.
Deal activity was heavily concentrated in eGrocery, In-Store Retail & Restaurant Tech, and Premium Branded Foods & Restaurants. Startup investment in the three categories accounted for 92.7% of total investment.
China’s three tech giants Baidu, Alibaba, and Tencent (“BAT”) invested at least $741 million (41%) in agrifood startups during the year. They were also responsible for more than $6 billion of agrifood acquisitions as three transactions in the Restaurant Marketplace category — ele.me, Waimai Baidu, and Meituan & Dianping.
“The exits led by BAT are bringing a lot of new energy to China’s food startup space,” says Joseph Zhou, Bits x Bites investment partner. “While most of the 2017 early-stage investments were still addressing common themes such as convenience and consumption upgrade, these large investments capture the imagination of new entrepreneurs, new corporate investors, and VCs, all of this providing a positive signal for the healthy growth of China’s food investment ecosystem.”
Comparing M&A activities in China and the US, acquisition activity in the US has been lackluster.
“Many of the agrifood corporations are looking to Google and Amazon as an existential threats, but their investment in agrifood tech is nothing compared to BAT. If the US agrifood corporations don’t get more aggressive with M&A they could see their positions threatened by China largest tech companies who are more nimble and aggressive,” says Rob Leclerc, CEO of AgFunder.
Learn more about the China AgriFood Startup Investing Report.