Cultivian Sandbox Ventures, the most established agrifood tech venture capital firm, has raised $135 million in its third fund. Founded in 2008, the firm was the first to focus entirely on technology startups operating across the food and agriculture value chain.
Investors in the fund include commodities giant Archer Daniels Midland, Corteva Agriscience, water and energy business Ecolab, animal health group Elanco, food science and product development company Griffith Foods, ag cooperative Growmark, ag products company Koch Ag & Energy Solutions, farming group R.D. Offutt Company, meat processor Smithfield Foods, and Sumitomo Chemical America. Other investors included family offices.
Corteva, Koch, and Elanco are existing investors in previous Cultivian funds.
The scope of fund III will be similar to fund II, investing predominantly in Series A and B deals, and covering technologies that advance crop production, animal health and protein production, food safety and traceability, novel ingredients, and water use efficiency, according to Dan Phillips, partner at the firm. The firm will also invest opportunistically in later stage deals, he added.
“We’ll continue to target technology-first companies with B2B business models, generally avoiding B2C companies. Additionally, we are seeing increasing AgriFood tech innovation outside North America, in places like Europe, Israel, Brazil, and APAC, to name a few. While only two of our investments from Funds I and II were outside North America, we expect to pursue more international investments in Fund III,” he told AgFunderNews.
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Nick Rosa, another partner at the firm added that they’re particularly enthusiastic about “platform technologies with multiple market applications, such as innovations in synthetic biology, AI and automation, advanced materials, and novel processes and production methods.” More specific areas of interest include soil health, biological inputs, sustainable packaging, waste-to-value, and functional foods, he said.
“Since we closed on Fund I in 2008, there has been more investor interest in the sector. In particular, the greatest interest has been in the food-tech sector, with family offices and high-net-worth investors playing a bigger part as early-stage investors,” added Andy Ziolkowski, partner at the firm.
Fund III has already invested in three companies so far: Full Harvest, a B2B marketplace selling imperfect and surplus produce to reduce food waste and create an additional revenue stream for farmers; Geltor, the animal-free collagen manufacturer, and Phylagen, a startup leveraging the environmental microbiome to verify the origin of goods in global supply chains.
Cultivian has now raised a total of $284 million across three funds, closing its second on $114 million in 2013, and the first fund, under the Cultivian Ventures brand, on $34 million. And the fundraising process has become a bit easier with time, as investors become more comfortable with the sector.
“We experienced what most funds report – the longer one’s track record the more straightforward raising the next fund becomes,” Ron Meeusen, partner at the firm told AgFunderNews. “With our Fund III raise, we already had a track record of a decade in the business, 22 investments, and successful exits. And as one of the first funds to specialize in food and agtech, we also benefitted from name recognition. While we’d love to think our success is due to our charm, wit and good looks, it’s probably got more to do with our track record.”