Specialist agriculture and food tech venture capital firm Tenacious Ventures has closed its first VC fund, securing $35 million to invest in Aussie agtech entrepreneurs making an impact on a global scale.
The fund was founded by Sarah Nolet, founder of agrifood tech advisory firm AgThentic, and Matthew Pryor, co-founder of agtech startup Observant, which was acquired by Jain Irrigation.
Speaking to SmartCompany, Nolet says there was both an opportunity and a need for a specialist agrifood tech fund in Australia.
“Australia is great at agriculture and agricultural research,” she explains.
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“Yet we haven’t been great at commercialisation.”
At the same time, there’s a whole swathe of agricultural technologies being built, but not a lot of investors around with the tools, network and expertise to support them.
The $35 million includes $20 million in commitments secured in March last year, with backing from the Australian Government Clean Energy Finance Corporation (CEFC) and Grok Ventures, the investment fund of Mike and Annie Cannon-Brookes.
Since then, the fund has banked another $15 million, and backed six startups, including robotic maggot farm startup Goterra, lab-grown meat startup Vow and ‘app store for agriculture’ startup SwarmFarm.
Impact with returns
The fund is focused on pre-Series A startups, at all stages of the value chain. But what’s most important, Nolet says, is the founding team behind the business.
“We think a lot about the team, the vision and the drive of these entrepreneurs.”
And, decisions are based less on the tech itself, and more on the business model and how that tech will deliver value to the industry and achieve real scale and impact.
“Founders that get that are the ones we absolutely love to work with.”
There’s also a focus on how agritech can help tackle the climate change crisis — something that’s not always associated with the traditional agriculture industry.
Nolet believes that perception of the sector is wrong. Many farmers, both in traditional and less traditional agriculture, care about the land and the environment.
If you’ve been farming for five generations, you don’t have a choice in the matter, she notes. Between the changing demands of consumers, government regulations and changes to the climate, farmers are under increasing pressure.
Technology can “absolutely help them be more sustainable and more climate resilient”, Nolet says.
There’s a misconception that sustainability comes at a cost to profitability, she adds. That’s not the case.
Tenacious Ventures is focused on “impact that can deliver returns”.
Sustainability is also very much front-of-mind for the Australian agriculture community.
Farmers here don’t get the same level of subsidies here as in some other parts of the world, and between droughts, floods and bushfires, they’re also on the front lines of the climate crisis.
The rest of the world is watching, Nolet says.
This is a global sector worth some $500 billion, she adds. And that’s only increasing. Failing to capitalise on Australia’s natural advantage here would be a missed opportunity.
“We’re globally competitive in agriculture,” she adds.
“There’s no reason we can’t be globally competitive in agritech.”