Anterra Capital, the European agtech investment firm, has held a second close of its first fund on $125 million, getting further investment from Rabobank, the Dutch global food and agriculture bank, and Eight Roads, the proprietary capital arm of global investment house Fidelity International.
This makes the fund the world’s largest agtech fund alongside Chicago-based Seed 2 Growth Ventures, and the largest European agtech fund by far.
The firm has also announced plans to establish an office in Boston giving it a rare footprint in both Europe and the US.
The fund first closed on $50 million in September 2013, shortly after Anterra Capital spun out of Rabobank. The Dutch bank had already started researching agriculture technology innovation before this, but Anterra became a separate entity when the Volcker rule of the Dodd-Frank Act looked likely to prohibit banks from having in-house private equity investment teams.
“Fostering innovation in food and agriculture is a huge focus for Rabobank, from supporting technology entrepreneurs who are playing an increasing role in driving change in the sector to bringing innovative ideas to our client base — the top food and ag companies in North America and around the world,” said Rajiv Singh, CEO of Rabobank North America Wholesale division in a statement.
The creation of Anterra coincided with interest from Fidelity to start making investments in agriculture technology as part of an expansion of its growing life sciences and general technology investment activities.
“Eight Roads was Anterra’s lead investor in 2013, and our increased investment underscores the strong investment opportunity presented by the global food and agricultural technology space,” said Cyrus Jilla, president of Eight Roads. “This is a sector which has traditionally been viewed as a laggard in technical innovation and, as a result, has been largely overlooked by venture capital. We already see significant areas of overlap between Anterra’s investment focus and our existing global venture capital activities in the life sciences and technology sectors.”
Since its launch in 2013, Anterra has invested in seven companies: Farmobile, Lemna Tech, Vestaron Corp, Food Freshness Technology, Ceradis, Bluwrap, and Voltea. These businesses range from ag data collection and analysis tools to food preservation technologies and digital phenotyping.
It invests between $5 million and $20 million into each company for a maximum of 12 years with options to extend. This is a longer time frame than most VCs which have 10-year funds and usually aim to hold investments for seven years or less.
“While we realize that agtech can be adopted very quickly — as we’ve seen with the adoption of GM seeds — we’re also aware of the longer term cycles required for the adoption of some tech when you bear in mind the seasonality of agriculture, and commodity price cycles,” said Adam Anders, managing partner of Anterra. “So here we have the advantage of patient, intelligent capital, that will make our investment cycle slightly longer term than traditional VCs.”
While Anterra believes agribusiness companies such as the ‘Big 6’ are likely to provide some exit opportunity for the sector, it also believes that they will find value in partnering with agtech companies in other ways. “They can benefit from a transformational agtech service without needing to be an owner,” said Anders, who thinks initial public offerings are likely to create some exit opportunities for the sector.
With the expansion into Boston, Anterra will be looking for three or four new staff members to join co-founder Philip Austin, who is moving to the city to open the new office and lead the US business. Anterra is also looking for up to two new team members in Europe.
The US and Europe will remain the main stomping grounds for the fund, but Anterra is open to investing in other geographies and will take advantage of Fidelity’s presence in key global markets like Beijing, Hong Kong, Tokyo, Delhi, London, and Shanghai, according to Anders.
Anders is set to announce the fund close at the World Agri-Tech Investment Summit later today.
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