Canada needs ‘larger and more engaged’ investor base for agrifoodtech: report

Canada’s foodtech sector needs “a larger and more engaged” investor base in order to live up to its untapped potential, argues a new report from the Canadian Food Innovation Network: Foodtech in Canada: 2025 Ecosystem Report.

Despite “notable growth in recent years,” Canada’s agrifoodtech sector lags behind other countries when it comes to investment, particularly where the US and UK are concerned, says the report.

Between 2018 and 2024, Canadian agrifoodtech startups — of which the report estimates there are about 320 — garnered $1.6 billion in funding from public and private capital, compared to $8.8 billion for the UK and $86.6 billion for the US.

The report highlights what it calls “a venture capital gap” for Canadian startups, which tend to rely heavily on public grant money. Grant money for Canadian startups accounts for 30% of all agrifoodtech funding, compared to 8% for the UK and 5% for the US.

Conversely, just 40% of Canada’s funding comes from venture capital versus 60% for the US and the UK.

“While this indicates that Canadian public bodies are actively supporting the ecosystem, it also highlights a gap in access to private capital and overall maturity of the ecosystem,” notes the report.

‘A widening gap’ for later-stage funding

“Investment capital from Corporate Venture Strategics or established VC firms for scaling companies is continuing to mature in Canada but we still fall behind nationally when compared to other leading markets,” Plug and Play’s Lindsay Smylie said in the report.

For investment at the earliest stages — pre-seed and seed — Canada is on par with the UK and US, which the reports authors suggest is due to strong government support for startups, lower costs of entry and a plethora of incubator and accelerator programs.

However “a widening gap” emerges from Series A onwards. Series A and B deals are roughly twice as large in the UK and US as they are in Canada; Series C raises in the US are three times higher than those in Canada.

“This discrepancy may represent a significant barrier for Canadian foodtech startups seeking access to growth capital,” notes the report. “These gaps carry profound implications, including challenges in scaling operations, building supply chains, meeting regulatory requirements, and achieving strong exit opportunities.”

‘Untapped potential’

Where investment is concerned, the report also highlight’s Canada’s “untapped potential”: of 311 total investors, just 43 have made five or more agrifoodtech-related investments, representing half of investors in the UK and one-tenth of those in the US.

“While the percentage of active investors in Canada (14%) is on par with the UK and US, the data further validates the need for increased private investment in Canada’s foodtech sector,” it noted. “Canada’s total investment volume remains significantly lower, reinforcing the message that a larger, more engaged investor base is critical to scaling Canada’s foodtech industry and bridging the gap with the UK and US.”

“If we can build a stronger community of risk-tolerant investors, it’ll unlock so much potential in Canada’s foodtech scene and help turn great ideas into global breakthroughs,” noted Redstick Ventures cofounder and general partner Cam Crowder.

Michael McGee, director of innovation at accelerator program Bioenterprise, said that despite bumps in the road, investment in the Canadian agrifoodtech sector will continue, “as we look to technology to increase sustainable production, reduce environmental footprints, ensure the security of supply chains in the face of climate change, and generally enhance the availability of reasonably priced nutritious foods for Canadians and for export abroad.”