A new report from Velocity Ventures highlights a significant lack of innovation within Southeast Asia’s food & beverage (F&B) sector, which presents a fertile ground for tech startups.
The Innovation & Deal Flow Report 1Q2025 [F&B] reveals that while the global F&B market offers attractive yields driven by technology adoption, advancements in Southeast Asia have been largely confined to point-of-sale (POS), food delivery, and revenue management systems.
The report underscores the urgent challenges of food security and labour shortages as key drivers for a growing need for automation technologies across the region’s industry. Velocity Ventures observes a significant opportunity for solutions to enhance efficiency and safety and reduce reliance on manual labour.
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This insight suggests that startups focusing on smart kitchen appliances, which are experiencing a forecasted 17.9 per cent compound annual growth rate (CAGR) globally, could find strong traction in Southeast Asia.
Interestingly, the report notes the continued popularity of grocery e-commerce platforms, indicating a sustained preference among consumers and restaurants for convenient and straightforward systems.
This trend, coupled with the global top 3 highest CAGR of grocery e-commerce at 28.09 per cent, with a corresponding top 3 increase in CAGR of +16.39 per cent, signals a robust market for startups in this vertical within Southeast Asia.
Conversely, the global demand for craft spirits appears to be declining significantly, with a top 3 decrease in CAGR of -17.79 per cent. This global trend might have implications for craft spirit producers and related businesses in Southeast Asia.
Similarly, loyalty and rewards and restaurant management software are also experiencing decreases in CAGR globally, at -8.4 per cent and -6.9 per cent, respectively.
While the report provides a global overview, Velocity Ventures, which identifies itself as Southeast Asia’s leading travel and hospitality tech investor, has reviewed over 250 startups annually. Its proprietary deal pipeline includes a Nigerian online food delivery platform operating virtual restaurants that raised US$2 million in seed funding at a US$10 million pre-money valuation in January 2025.
It also features an Indonesian food technology company focused on ready-to-eat meals using innovative preservation methods, seeking US$2 million in seed funding at a US$11 million pre-money valuation as of March 2025 (referred to as Project F10).
Project F10 highlights a strategic rationale focused on solving global food access challenges, diversified revenue streams (B2C, B2B, B2G), and scalability through automated systems. Its technology includes patented drying and heat-based preservation processes, offering OEM white-label solutions and branded meals.
Furthermore, the report spotlights GrubMarket, a US-based AI-powered B2B e-commerce business in the food supply chain, which recently secured US$50 million in Series G funding at a US$3.5 billion pre-money valuation. This highlights the significant investor interest in technology-driven solutions for optimising the food supply chain, a trend that Southeast Asian startups could capitalise on.
Other notable global deals in the F&B tech space include:
SKUsafe (USA): A product lifecycle management tool for high-growth CPG brands, raised US$4.3 million in seed funding in January 2025.
Mealawe (India): An online platform connecting home kitchens for homemade meals, raised US$1 million in seed funding in February 2025. This example from India may be particularly relevant for similar models emerging in Southeast Asia.
Choice (Czech Republic): A B2B SaaS platform for restaurants offering online ordering, marketplace management, reservations, and guest engagement, raised US$1.08 million via a convertible note in March 2025.
GerOrder (Ukraine): Restaurant software integrating food delivery platforms with POS, received a US$22,000 grant in March 2025.
Regulate (USA): An AI-driven SaaS company for market prediction and regulatory compliance, raised US$250,000 in a venture round in March 2025.
Also Read: How digital technology can transform the food and beverage industry
Velocity Ventures’s analysis suggests that the current landscape in Southeast Asia presents a compelling opportunity for startups that can introduce innovative automation and supply chain solutions to address the pressing issues of food security and labour shortages. The sustained growth in grocery e-commerce further indicates a receptive market for digital solutions within the region’s F&B sector.
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