Articles

With C$4.1 billion invested in Canadian foodtech between 2014 and 2024, the sector has experienced impressive growth. And while Canada’s early-stage public funding landscape is robust, private venture capital remains cautious. This is leaving a noticeable gap in later-stage financing, and many of Canada’s 200+ foodtech startups struggle to secure growth capital needed to establish long-term financial sustainability. 

So why is private investment lagging behind?  First, although recent growth in the Canadian foodtech ecosystem is extremely promising, it remains in a relatively early stage of development, where market traction and scalable business models are just emerging. Private investors typically look for clear, proven pathways to commercial success before committing large sums, especially in capital-intensive industries like food manufacturing. In Canada, early rounds tend to be about half the size of those in comparable markets like the U.S. and the U.K., before dropping even further in Series C rounds and beyond. This discrepancy isn’t due to any fault in the startups; rather, it reflects a private investment culture that is, for now, cautiously waiting for more demonstrable results before scaling up. 

Another reason for the gap is the inherent risk tolerance differences. Public funding, provided via grants and government programs, is designed to nurture innovation at the seed stage. These funds are available precisely because the public sector accepts a higher risk in exchange for long-term strategic benefits, such as sustainable food solutions and regional economic development. Conversely, private venture capital typically seeks rapid growth and quick returns. In an emerging ecosystem like Canada’s foodtech space, where scaling up technology and operations takes time, many private investors prefer to hold back until the path to profitability becomes clearer. 

Finally, Canada’s regulatory and market environment has a role to play in the foodtech investment gap. While government support has laid a solid foundation, private investors remain influenced by factors such as uncertainty stemming from stringent regulatory frameworks, and the effect that has in getting innovative products to market on a time horizon that aligns with investor expectations. 

Canada’s foodtech funding gap isn’t necessarily a sign of weakness; it’s simply a reflection of an evolving ecosystem where public investment has been the catalyst for early innovation. However, bridging this gap must be considered a top priority to fuel the growth of Canada’s food sector—and it requires policymakers and industry leaders to take decisive action. This could take the form of targeted co-investment programs, where the government partners with private investors to share the financial risk of later-stage funding rounds. These programs help attract venture capital by offering matching funds, loan guarantees, or tax incentives, making private investment in foodtech startups more appealing. 

Successful foodtech-specific models exist globally. Europe’s EIT Food is a prime example, operating as a public-private partnership that co-invests in high-potential agrifood startups, providing not just funding but also mentorship and commercialization support to help them scale. Similarly, Singapore’s SEEDS Capital, a government-backed investment arm, has successfully attracted venture capital to its agrifood sector by offering co-matching investments, effectively reducing risk for private investors. 

Adapting similar strategies in Canada—whether through direct co-investment, tax credits, or government-backed loan guarantees—could catalyze private capital flow into foodtech, ensuring promising startups have the funding needed to scale, compete globally, and drive food innovation forward. Encouraging innovation through the development of regulatory sandboxes and providing clearer commercialization pathways for novel food technologies will also be essential to garnering investor confidence.  

Prioritizing these efforts nationally will be critical to not just the growth and global competitiveness of Canada’s foodtech sector, but to secure a resilient and sustainable food system in this new era of geopolitical upheaval.