Food Tech Funding Slows, But M & A Deals Are Heating Up
Startup funding in food tech is down in 2025, but mergers and acquisitions are picking up as buyers seek strategic growth.
Funding for food tech startups has dropped sharply in 2025, but merger and acquisition (M&A) activity is rising fast, offering a new path forward for companies in the space.
Protein bar maker David recently raised $75 million and used the funds to acquire Epogee, a company known for its plant-based fat alternative. This move reflects a larger trend: while investors are pulling back from early-stage food tech, larger players are stepping in through acquisitions.
Food Tech Funding Drops, but Deal Activity Grows
In 2024, food tech startups raised $6 billion worldwide—down from $14.5 billion in 2022 and $20.7 billion in 2021. By comparison, just $1.7 billion has been invested so far in 2025.
Despite the funding dip, M&A deals are gaining momentum. This year, global food tech M&A deals have already totaled around $4 billion. That’s on track to beat the $5.5 billion recorded for all of 2024 and far ahead of the $34 million in 2023. These figures may be even higher, as many deals don’t disclose their full terms.
David’s Strategic Move
New York-based David has raised a total of $85 million to date. Its recent funding round, led by Greenoaks with support from Valor Equity Partners, valued the company at $725 million.
CEO Peter Rahal said the company acquired Epogee to bring its key ingredient, EPG, in-house. EPG is a plant-based fat substitute that helps cut calories and fat while keeping flavor and texture. “This move helps us scale faster to meet demand,” said Rahal.
David officially launched in 2023 and began selling its protein bars less than a year later. The bars are now available in more than 3,000 stores. Rahal says the company is already profitable and expects to earn over $100 million in its first year.
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Why Food Tech M&A Is Rising
Industry experts say the spike in M&A is tied to changing investor expectations.
Nate Cooper, managing partner at Barrel Ventures, said the drop in food tech funding is part of a “post-hype correction.” Many startups had high-tech valuations but were selling consumer products that weren’t yet profitable.
“Investors now want clear paths to break-even, not just big ideas,” Cooper said. That’s led to larger CPG (consumer packaged goods) companies stepping in to buy rather than build.
Andrew D. Ive, founder of Big Idea Ventures, agreed that funding remains tight. As a result, many food tech startups are selling rather than raising more capital. “With valuations more realistic, it’s a good time for strategic buyers to pick up proven technologies at better prices,” said Ive.
Big Idea Ventures has invested in companies like Gourmey, Actual Veggies, Perfect Technologies, and Aqua Cultured Foods. Several of its portfolio companies have recently been acquired or acquired others.
Major Food Tech Acquisitions in 2025
Notable food tech deals this year include:
- Pepsi’s $1.95 billion purchase of Poppi, known for its probiotic drinks
- Flowers Foods’ $795 million acquisition of Simple Mills, a maker of organic, gluten-free snacks
- The Hershey Company’s $750 million buyout of LesserEvil, a producer of packaged snack foods
David: A Food Tech Outlier
While many food tech startups have struggled, David is emerging as a rare success. Its protein bar claims to offer the highest protein-per-calorie ratio on the market and is already generating strong sales.
CEO Peter Rahal, who also co-founded RXBAR (sold to Kellogg’s in 2017), brings industry experience and a clear growth strategy. His new company is profitable, growing quickly, and making bold moves with its acquisition of Epogee.