Open Prairie Ventures is raising its third early stage agriculture technology fund. And the firm expects to hold a first close on $75 million at the beginning of 2016, Patrick Morand, president at the firm told AgFunderNews on the sidelines of the Agri Investor Forum in Chicago today.
The fund, which is targeting over $100 million overall, is also en route to becoming a licensed Rural Business Investment Corporation (RBIC) under the USDA’s Rural Business Investment Program (RBIP). The licence, which has now been given to four investment firms in total, enables investment managers to raise equity capital from the Farm Credit System.
Fund III succeeds the Illinois firm’s previous $40 million 1999-vintage Open Prairie Ventures I and $30 million 2008-vintage Open Prairie Ventures II, which both invested into medical devices as well as agriculture technologies. It also succeeds the firm’s Southwest Michigan Life Science Fund.
It will invest into agribusinesses and technologies at the growth stage of their development, or those that are reporting positive EBITDA. And investment sizes will range between $2 million and $10 million, said Morand.
Speaking to delegates at the forum, Morand gave the example of a drones company in the Midwest, which is selling analytics to growers, as a potential target company that is asset light, but goes beyond just a pure drones hardware play.
Comparing medical devices and agriculture technology, he argued that the two segments should command similar investment returns, despite the lower upfront costs and regulatory hurdles that medical devices often have to climb.
The fund will also invest into biological agriculture technologies and investments in its previous funds include NewLeaf Symbiotics, a bacteria-focused input manufacturer, and Vestaron, a bio-insecticide company.
Morano’s colleagues include Open Prairie founder Jim Schultz who was recently appointed director of the Illinois Department of Commerce and Economic Opportunity.
Other RBICs include Advantage Capital Agribusiness Partners, which is currently investing out of a $154 million fund, and Meritus Kirchner Capital and Innova Memphis, which are still fundraising.
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