Last year didn’t see a repeat of 2018’s outsize transactions, like Meituan Dianping’s $1.5 billion pre-IPO raise. Also contributing to the decrease in investment in 2019 were China’s slowing GDP growth rate, its ‘trade war’ with the US, and the ongoing African swine fever outbreak.
It was also a more modest year in terms of agrifood IPOs. As with 2018, all of 2019’s Chinese listings in the sector were in the Premium Branded Foods & Restaurants category. The largest was tech-enabled coffee chain Luckin Coffee’s $561 million New York debut.
While the overall trend suggested a downturn in both funding and the number of deals being done, some segments saw an uptick.
Most of the categories that grew in investment value were upstream. These included Midstream Technologies; Farm Management Software, Sensing, & IoT; and Novel Farming Systems. While total investment into upstream categories halved in dollar terms compared to 2018, the number of deals grew by 44%.
Another promising development saw large corporates and state-owned enterprises massively increase their investment in food and agriculture, almost quadrupling their outlay from $11.9 billion in 2018 to $44.1 billion last year.
In terms of deal value, eGrocery led the way. A whopping 60% of all investment in dollar terms went to startups in this category, which also accounted for 25% of all deals done in 2019, with 51 transactions.
The next three leading categories were In-Store Retail & Restaurant Tech, with $424 million invested across 22 deals; Premium Branded Food & Restaurants ($400 million, 44 deals); and Midstream Technologies ($336 million, 39 deals).
Here are the top three deals by investment value in each of the four leading categories: