S2G Ventures has officially launched its $125 million, multi-stage, food and agriculture venture capital fund, in what is understood to be agtech’s biggest VC fund.
The firm, also known as Seed to Growth Ventures, has been quietly investing out of the fund since June 2014. It already has eight portfolio companies under its belt, including two that are in the news this week; Beyond Meat, the plant-based meat alternative company, and MycoTechnology, the taste improvement biotech business.
Speaking at the New York Times Food for Tomorrow Conference earlier today (Wednesday), S2G’s co-founder Victor Friedberg announced that Chuck Templeton, OpenTable founder and former CEO of GrubHub, had joined the firm as a managing director.
Friedberg also explained the fund’s strategy and thesis.
“We believe that a new food system is evolving to meet the demands of a changing consumer,” he told delegates. “That consumer wants better tasting, more nutritious, healthy and sustainable food.”
AgFunder Co-Investment Fund III is now open for investment. Closing June 15, Spots are limited.
He described his realisation that much of the food he was eating did not taste as good as it could do. “Our food system is not designed for flavour, nutrition or health. It was designed to produce cheap calories, and to produce meat. And it does those things really well until you factor in the impact on water and the environment.”
These flaws of the current food system have now been revealed and consumers are starting to weigh up their options and vote with their wallets, he argued. The health benefits, and potential to reduce chronic disease and therefore health costs with more nutritious food, will also drive consumer demand, he added.
“To meet that demand we feel a collaborative approach will be needed from innovation and policy advances. S2G is determined to be a positive force for that change,” he said. “Our north star, guiding the food system, is the consumer. There is a sea change underway and there is an opportunity for both positive impact and capital gains.”
The fund, which is already 18 percent deployed, will continue to invest across seed, venture and growth-stage companies, and along the value chain from ‘soil to shelf’.
Some key areas of interest are:
- Soil health and sustainable land management
- Organic, non-GMO and other “identity” produce and commodities
- Controlled-environment growing platforms and brands
- Real, nutritious and functional ingredients
- Healthy consumer packaged goods
- Food logistics, including storage, distribution and transportation
- Healthy food retail and restaurant formats
- IT platforms that increase access to healthy, sustainable and local food
The businesses in the portfolio are hoping to “leverage each other and influence the entire food system’s behavior together,” said Anthony Michaels, CEO of Midwestern BioAg, a growth-stage biological agriculture consulting company, and one of S2G’s portfolio companies, who also spoke at the event.
Sanjeev Krishnan, managing director at S2G, chaired a panel of four S2G companies, including MidwesternBioAg. The others were ShopWell, the nutritional food discovery app, Shenandoah Growers, the indoor agriculture herbs producer, and Beyond Meat.
The remaining four companies in the portfolio, some of which also attended the event, are Maple Hill Creamery, a grass-fed organic milk producer, Sweetgreen, a healthy fast food restaurant, and Mercaris, an online marketplace and data subscription service for organic, non-GMO commodities, and MycoTechnology.
Watch out for AgFunderNews’ in-depth interview with the S2G team later this week.
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