Five Seasons Ventures, a new European VC focusing on agrifood tech investments has launched its first fund, announcing a first close on €60 million ($74.3m). Backers include Nestlé, the European Investment Fund, Fondo Italiano d’Investimento, Bpifrance, and selected family offices and entrepreneurs.
“Food and agtech is a new story and an exciting one. There are not many LPs who have heard of a fund focused on food and agtech,” said cofounder Niccolo Manzoni, who told AgFunderNews that the firm is targeting €70 million ($86.6m) for a final close after receiving more enthusiasm than expected from investors, causing the firm to raise their target from €50 million.
The cofounders of the firm, which is based in Paris, are Ivan Farneti and Manzoni. Farneti was founding partner of Doughty Hanson Technology Ventures and a board member of Seedcamp. Manzoni previously managed a European family office where he invested in Impossible Foods, Perfect Day Foods, Beyond Meat, Clear Labs, and Memphis Meats. The two were introduced by a common acquaintance who would become one of their first investors.
The firm is taking a wide view of agrifood tech, focusing on every inch of the supply chain from startups aiming to satisfy shifting consumer preferences like plant-based proteins and personalized nutrition, to supply chain traceability and packaging technologies, to increasing yield on farms and reducing waste.
Manzoni and Farneti said that their investments will likely be in the €3-4 million range with the possibility of up to €12 million in follow-on funding, making three to four investments per year. The cofounders see themselves as plugging a hole in the European agrifood tech investment ecosystem.
AgFunder Co-Investment Fund III is now open for investment. Closing June 15, Spots are limited.
“Right now we are amongst the first movers in Europe. There is an abundance of exciting companies and a shortage of specialized capital and we want to capitalize on that,” said Manzoni.
Europe Heating Up?
“We’ve counted more the 30 incubators and accelerators in Europe. Now that these programs have been running for two to three years, as the companies graduate from these cohorts they move onto angels and family offices. There is an abundance of capital to facilitate that transition but Series A capital was missing. We hope to fill that gap,” said Manzoni.
Major agrifood tech VCs already active in Europe include Capagro, which closed its Innovation Fund on €124 million in 2017, and Anterra Capital, which closed its first fund on $125 million in 2016. Both firms focus on upstream technologies within the agrifood value chain and so Five Seasons’ openness to downstream technologies may indeed be a differentiator. The firm lists fat, sugar, and salt alternatives, new proteins, and human microbiome applications as areas of focus.
On the state of the European ecosystem for agrifood tech startups, Farneti added, “The ambitious European entrepreneur will now have three phone calls to make. The chances that we see every deal in Europe over the next five years is pretty high.” At least two-thirds of the firm’s investments, if not more, will be in European companies.
The Nestlé Factor
Though Nestlé is a sometimes collaborator with agrifood tech startups, it is one of the few major multinational food companies without a formal VC arm focused on food and agriculture. The company is a more active acquirer of startups than an investor, but most of its acquisitions are in consumer packaged goods without a strong technology component. In 2017, the world’s largest food company acquired both Blue Bottle Coffee and Chameleon Cold Brew. Also last year, Nestlé made a rare equity investment in Freshly, an online restaurant based in New York City. The company has also partnered with several agrifood tech startups in the past including Ireland’s AI-enabled ingredient discovery platform Nuritas.
Nestlé does have a VC arm in Inventages, which is based in London, but the firm is focused on life sciences and healthcare with just a few food companies in its portfolio including stevia-sweetened beverage company Steaz and oat-based dairy alternative company Velle.
Former Nestlé chairman Peter Brabeck-Letmathe is also an investor in remote sensing startup Gamaya.