Singapore-based agrifood investor VisVires New Protein (VVNP) has rebranded as Clay Capital and announced the close of its second fund.
The $145 million Fund II will back startups in Europe, Israel, and Asia “applying technology to remedy fundamental problems in the food system.”
Initial investments include French biostimulant producer Toopi, Israeli bioherbicide startup WeedOUT, and French kitchen robot manufacturer Cook-e, says Clay Capital, which is backed by institutional investors including government-linked funds, supra-national entities, banks, insurance companies, and prominent families in the agrifood industry.
Cofounder and partner Matthieu Vermersch explained: “As part of the larger climate tech market, food remains a major source of emissions and natural capital destruction. What’s changed in the sector over the last nine years [since Clay launched in 2014] is that tailwinds have increased, the maturity of the technology ripened and, of late, a focus on business fundamentals returned.”
Serving as a bridge between the Asian and European markets
While the regulatory environment in the EU can be challenging, European startups are adaptable and well-placed to expand into new markets because of the limited size of their domestic markets, Clay Capital partner Gerard Chia told AgFunderNews.
“I think the psyche of [European] founders is also very different. When they think about products, when they think about regulatory pathways, they tend to be more flexible and dynamic to meet all the different requirements of going even from a market such as France to Germany,” claimed Chia.
“We think that with this mindset, these companies are more suited to expanding to Asia compared to say, some US startups.”
Regulatory pressures are also driving European firms to innovate in areas such as sex determination for chicks [to identify males before they hatch], an area in which Clay Capital has invested via portfolio co In Ovo, said Chia.
“You do see pressure from governments* that say, look, we’ve got to stop the culling of male chickens. In Europe there is more concern about animal welfare and also a firm commitment to sustainability.”
Initial checks will range from $3-8m
Clay Capital plans to invest in up to 15 companies in the new fund, from early stage and series A through to growth stage. It may also invest in startups at the seed stage “where it makes sense to contribute to ecosystem development.”
Areas of interest include sustainable packaging, fermentation, agriculture biologicals, crop disease resistance, soil health and regenerative agriculture.
Checks will typically range from $3-8m with additional capital kept back for follow-on investments, said Chia.
“Clay Capital’s positioning between Singapore and London is intentional, with the firm serving as a bridge between the growing Asian and European markets and offering startups support finding and accessing growth opportunities in both regions.” Gerard Chia, partner, Clay Capital
As for the rebrand, “The idea behind our former name [VisVires New Protein] was a novel insight at that time and held broader meaning than the category specific connotations it holds today,” says the firm.
Clay Capital was chosen as “Clay soil is known to be fertile; a rich canvas upon which to grow healthy food. Healthy, fertile soil is the foundation of a healthy food system; we invest from the soil up.”
*In-ovo sexing is gaining traction in Europe, spurred by animal welfare legislation. Germany and France (with some exceptions) have already banned the practice of culling male chicks; Italy plans to phase it out by 2026; and Switzerland now requires more humane culling methods. Animal welfare groups are also pushing the European Commission to include an EU-wide phase-out of male chick culling in its revision of EU animal welfare legislation.