EXCLUSIVE: Anterra closes $260m Fund II, says quality of agrifoodtech opportunity ‘has increased exponentially’

Agtech investment firm Anterra Capital has closed its second Global Food and Agriculture Technology Fund on $260 million. The fund will invest in entrepreneurs developing biotech and digital solutions across the agrifoodtech value chain, from ag fintech and crop science to animal health and consumer tech.

Rabo Investments, Eight Roads Ventures, and Tattarang led the fundraising, each of which participated in the firm’s first fund. Fund II also saw a crop of new investors including pension funds, sovereign wealth funds, family offices, and tech entrepreneurs.

On background:

Anterra invests in startups and entrepreneurs working to improve the food system up and down the value chain through technology.

• Its current portfolio includes, among others, genome engineering startup Caribou Biosciences, data analytics company Farmobile, and ProducePay which provides loans and software services to fresh produce growers.
• The Amsterdam-based firm also incubates companies in addition to its focus on investing in Series A, B, or C startups. Crop protection startup Enko Chem is an example of a business incubated by Anterra from inception.
• Collectively, Anterra portfolio companies have raised more than $1 billion in additional private finance since Anterra first invested in them, according to the firm.
• The first Anterra fund was all about helping to build a more expansive view of agtech and adding focus to areas like fintech and biotech; Fund II zeroes in on biotech and digital tools specifically. “Our incubated companies focus on deploying biotech and digital solutions that are established elsewhere, but are new to food and ag,” Anterra managing partner Adam Anders said in a statement.

Why it matters:

Anterra believes much of the momentum driving adoption of biotech and digital solutions in agrifood is due to the Covid-19 pandemic. The ongoing global health crisis has both spotlighted inefficiencies in the food supply chain and changed consumer attitudes about using biotech in food and agriculture, creating more opportunity for both startups and investors.

• For example, studies in both the UK and EU have found that anti-biotechnology sentiment has waned amongst consumers and that people have a “generally positive” view of genome-edited foods, though awareness around the technology is still low.
• In another example, the Center for Food Integrity found that younger generations such as Gen Z and millennials are willing to embrace technology that can address environmental and food security issues.
• Anterra says the rollout of mRNA vaccines has allowed people to witness the benefits of biotech firsthand and changed consumer views about the industry.
• Ag biotech was the fastest-growing category in farmtech in 2020, the most recent year for data, according to AFN parent company AgFunder.

What they’re saying:

“We’re operating in an environment where deal flow volume has increased slightly but where quality has increased exponentially. We don’t need a new strategy for this next fund as we’re very comfortable in the sweet spot we’ve been sitting in for years now; there remains so much opportunity still,” Anders told AFN.

“We’re less interested in capital-intensive businesses, so you’ll see an absence of companies building big facilities like factories or greenhouses in our portfolio. We’re not saying they’re not good businesses, but statistically, they are places where it’s more difficult to earn strong venture capital returns,” he added.

“I witnessed the boom and bust of cleantech, so at Anterra we made the strategic decision not to expose ourselves to that incremental risk; we’re already in a comparatively slow-moving sector, still adapting to the arrival of venture capital.”

What’s next:

Anterra said in a statement that the ag biotech and digital startups it invests in or incubates are deploying solutions that are established elsewhere but have only just made it into the food and agricultural sectors.

“It’s an advantage of operating in a slow-moving sector: you can innovate in a slightly de-risked way. I can confidently say we are unique in that approach,” Anders said.

He expects increased growth in key agtech sectors like technologies facilitating climate-friendly farming and natural asset management.

“Innovative new income streams for farmers will hopefully help bridge the income gap as we move into a challenging macro-economic environment. Our sector is known as a safe haven during times of inflation and the need for change in our food system will play through any financial cycle.”