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A Shift in Food Tech Venture Capital: Deal Sizes Decline for the First Time in Seven Years

In a surprising development, the median venture capital (VC) deal size in the food tech sector has declined for the first time in seven years. According to a recent PitchBook report, the median deal size dropped to $3 million in the second quarter of 2023, marking a 12.4% decline from 2022. This decline comes despite an increase in the number of investments and may signal a cautious approach by investors in the sector.

Key Findings

The number of investments increased to 268 in the second quarter, up 13.1% quarter over quarter.

The decline in average deal size contrasts with the increase in the number of investments, possibly indicating a more careful investment paradigm.

The fermented protein category has seen particular interest, with early-stage startups in this space experiencing a 65.5% increase in value quarter over quarter.

The Silicon Valley Bank Factor

The increase in deal count may be a rebound following the collapse of Silicon Valley Bank in March 2023. Known for working with young companies, the bank's closure could have initially led to a pause in investment activity.

Spotlight on Fermented Proteins

The fermented protein space has attracted significant attention, especially from early-stage investors, for example, alt-dairy Israel-based Imagindairy raised $13 million, Berlin's Formo raised a little shy of $7 million in 2022 and later staged companies like Israel-based alt-dairy startup Remilk raised over $124 million, and UK-based mycoprotein maker Enough have successfully recently secured $43.6 million to double the production of Abunda, a meat replacement made from fungi.

Challenges and Opportunities

Despite advancements like the USDA issuing grants of inspection to Eat Just and Upside Foods, the food tech sector faces challenges such as scalability, consumer acceptance, and cost. Collaboration with traditional meat companies like JBS, Tyson Foods, and Cargill could be crucial for a sustainable future in cultivated meat.

Financial Environment

The current financial environment is hardly favorable for companies looking to raise cash. With interest rates at their highest levels in years and banks being more cautious in lending, venture capitalists are also becoming more selective in their investments.


The decline in the median VC deal size in the food tech sector could be a sign of a new, more cautious investment approach. While the number of deals has increased, the smaller deal sizes may reflect investor caution in a volatile market. As the sector navigates challenges like scalability and consumer acceptance, this cautious approach could become the new norm.


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