Willow Hill Ventures will invest in growth stage agtech companies beyond Series B stage taking advantage of IFC’s portfolio of farmland across the US to test agriculture technologies on.
“IFC has a large number of directly-owned farms, and a tenant-partner network for us to trial agtech companies with as part of the evaluation process, but also to drive adoption onto a large number of acres,” said Arama Kukutai, co-founder at Finistere.
IFC will have a stake in the fund, and one of its team members will have a place on the investment committee. Kukutai also hopes to leverage IFC’s investor base for commitments into the fund, which is yet to hold a first close. He would not disclose the target size of the fund, but expects to hold a first close by the end of the year.
Finistere Ventures is currently still fundraising for its second fund (FVII), which is targeting $150 million, but the two funds have very different propositions, argues Kukutai.
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“I think it’s clear for us that the proposition for FVII is different to Willow Hill; the stage of investment is very different. We’ve noticed a gap in the market for growth capital, and while there’s a strong possibility of investors committing to both funds, we’re not counting on it,” he told AgFunderNews. “IFC has many large landowner investors that are interested in the tech piece, but are more interesting at the point where tech companies are scaling and growing.”
FVII invests in seed to Series B stage companies by comparison; earlier this year it led the $5.3 million Series B round of ZeaKal, a GM seed business.
“If you look at the current AgTech pipeline, there’s a huge funding gap. Everyone is racing to invest in startups, but no firm has truly dedicated itself to helping those startups mature upon proof of concept,” said Dr. Spencer Maughan, Bay Area partner at Finistere Ventures in a statement. “Willow Hill fills that gap by providing much-needed growth capital and a proven platform for scaling technologies. We test a mix of solutions and then fund and scale what works.”
IFC already tests agriculture technologies on its land through its program called Top Trials, and it’s been sharing intel with Finistere for over a year, according to Kukutai. Today’s announcement formalizes this relationship with the launch of Willow Hill.
“Today’s farmers are bombarded with a dizzying array of technology solutions while trying to navigate evolving consumer food trends and the pressures of a consolidating farm sector,” said Charlie McNairy, CEO of IFC in a statement. “Willow Hill relates the multi-generational farming heritage that farmers can trust. Our farm labs discover and test the latest disruptive technologies so we can rapidly vet and validate the technologies ready for scale while reducing investment risk—both for the investor and the farmer.”
IFC has raised at least three farmland funds, the latter of which — U.S. Farming Realty Trust III — is targeting $1 billion and includes institutional investors like Washington State Investment Board. The company has a 150,000-acre cropland portfolio valued at $750 million, according to the Farmland Investor Center.
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