Food & Climate Tech Funding: Where The Money’s Flowing In 2025?

Let’s see what’s happening in the climate tech world.

Food & Climate Tech Funding: Where The Money’s Flowing In 2025?

2024 was a rough year for startups looking for cash. The venture scene was tight, and funding was way down. Early-stage rounds, crucial for keeping climate tech alive, fell 14.2%. Growth and late-stage deals were down, too—a 2.7% drop.

Big funds got bigger. Small VCs? Scrambling. Fewer firms, less money. US-based funds shrunk from 8,315 to 6,175. That’s a serious cut. The Financial Times called it a power shift. Mega-firms rule. Smaller ones? Fighting to stay alive.

Food tech had it tough. Hoped for a reset after a brutal 2023. Didn’t happen. VC money stayed cautious. Investments dried up. Alternative proteins? Third straight year of decline.

Why? The AI boom. Investors chased AI, pouring over $100B into it. Climate tech funding dropped 38%—from $52B to $32B. BloombergNEF says it’s a shift. Money follows trends, and AI is the trend.

Layoffs. Mergers. Takeovers. This ain't stopping. It’s a messy, painful phase, but maybe a necessary one. Sharyn Murray from the Good Food Institute thinks consolidation could speed up innovation. Painful now, but might help long-term.

Some wins in food tech, though. AI, fermentation, and—oddly—men. But let’s talk about the money gap.

The Climate Tech Money Gap

Food and land use tech—think alternative proteins—saw funding shrink 6%, down to an average $15M per deal. But it’s now the second most crowded climate tech sector, with over 250 companies raising money. Even with 768 deals, the cash wasn’t enough. This sector makes up 22% of global emissions but only got 18.5% of climate capital ($29.3B).

PWC backed this up. Climate tech funding fell 29%, from $79B to $56B. VC and private equity? Down from $799B to $673B. Investors and startups? Struggling to close deals.

Europe vs. Asia

Europe did okay, relatively speaking. Investment fell, but not as hard as in the US or Asia. DigitalFoodLab says Europe took 58% of global food tech investments in 2023. In 2024, it held steady.

Alternative proteins? Europe led again—50% of all investments in Q1-Q3. North America had 38%, and Asia trailed at 10%. China’s funding collapsed by 80%, dragging the whole region down. Delivery startups? Out of favor. Food science and alt proteins? Still got a slice.

Southeast Asia struggled too. MAGNiTT reported a 45% drop in total VC funding. Deals down 20%. Exits down 30%. Singapore still leads in food tech, but climate tech? Nah. Fintech’s the game there.

AgFunder, though, spotted a weird trend. Fewer dollars but more deals—616 in the first three quarters, more than in the last three years. Cautious investors, spreading smaller bets.

Africa? Climate tech got a third of the total startup investment. Energy sucked up most of it—$423M in 2024 alone.

The Alternative Protein Crash—And One Bright Spot

Alt protein investments tanked. Down 27% overall. Plant-based startups? Hammered—64% drop. Cultivated meat? Even worse—40% down. Only $6M came in during the second half of the year.

Plant-based meat took a beating from the “ultra-processed food” scare. Misinformation flew, and consumers got spooked. In the US, lawmakers attacked cell-cultured beef. Florida and Alabama banned it. More states might follow.

One winner? Fermentation. Investors liked it. Funding jumped 43%. Four of the five biggest alt-protein deals? Fermentation startups. Governments joined in too, handing out grants.

GFI Europe’s Helene Grosshans gets why. Fermentation companies use food waste to make new proteins. That’s sustainable, efficient, and cheap. Exactly what investors want now.

The Gender Gap—Again

Women-led startups got peanuts. Trellis crunched the numbers. Women-founded businesses got just 0.4% of US climate tech funding—$135.8M out of $33.5B. Mixed-gender teams got $2.45B.

VCs are mostly men. 96% of firms are majority-male. Only 16% of decision-makers are women. This, despite research showing female founders bring better returns—78 cents per dollar invested vs. 31 cents for men. They also exit faster—7.2 years vs. 8.1. But still, the money doesn’t flow.

Uncertainty Rules, But Maybe It’s a Good Thing?

Trump’s tariffs. Trade wars. Inflation Reduction Act delays. Investors hated 2024’s instability. Sightline Climate says things might stabilize. Maybe.

Some, like Nourish Ingredients’ CEO James Petrie, think it’s just a correction. Every industry goes through it. AI, alt proteins, food tech—it’s all maturing. Investors want real revenue now, not just big ideas.

Bad for hype. Good for businesses that play smart. The easy money is gone. Now, you gotta prove you can actually sell.

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Thank you for reading

-Shen Pandi and team