Women-focused investment firm The51 has brought on two venture capitalists for its new Food & AgTech fund.
Alison Sunstrum, formerly of Builders VC and GrowSafe Systems, joins as a general partner. While Kookai Chaimahawong joins as a venture partner, bringing with her four years of experience from Pangaea Ventures and her work as a partnership consultant for the United Nations Development Programme.
“We’re investing in those that are not being invested in … we’re going where no one else is going.”
Sunstrum and Chaimahawong recently took on the roles to support The51 in raising capital for its second investment fund. The51 announced the fund, focused on food and AgTech, in September. The firm is looking to raise between $25 million to $30 million and has already secured its lead limited partner (LP).
“I see agriculture as an incredible opportunity for Canada,” said Sunstrum in an interview, noting the country’s strength as a leading producer of primary commodities but room to grow as an exporter. She sees AgTech as a key unlock to make that happen; an insight she draws from having been in the AgTech space for more than 20 years.
Sunstrum helped create GrowSafe Systems in 1999, which created radio frequency identification (RFID) solutions for the agricultural research, fed cattle and dairy industries. After departing the company in 2019, Sunstrum returned to university to study blockchain, and created CNSRV-X (Conserve X), which researches, develops and invests in emerging blockchain, Internet of things (IoT), and machine learning AgTech. She also helped create the Ag Stream of the Creative Destruction Lab.
Sunstrum has been part of The51 from its early days, having invested in its first fund. When asked why she decided to join as a GP for fund two she noted, “There’s a great big white elephant in the room when you look at Silicon venture investing. Silicon Valley invests in people that look just like them … and I really wonder, how hard is it for diverse founders to get ahead? I know my experience, but what are we missing as an economy and as a society if we’re not funding everyone and not looking at every idea available.”
This is a sentiment that is core to The51’s investment thesis. The investment organization connects female angel investors with female-led ventures. The organization was co-founded by Shelley Kuipers, Judy Fairburn, and Alice Reimer in 2019. Through its first fund, which focused on individual LPs, The51 invested in a number of women-run businesses from a range of verticals. The majority of LPs for The51’s first fund were women.
Now, with its second fund, The51 is expanding its scope by looking to bring in institutional investors and investing in not only women but a diverse set of founders that tend to be “under-funded.”
“We’re investing in those that are not being invested in … we’re going where no one else is going,” stated Sunstrum.
The51 is looking to make an impact not only for diverse founders but the AgTech industry itself.
“We need to change the face of venture capital funds in order to change the face of the founders getting invested [in].”
Global AgTech investing has been booming in recent years. A June 2021 report found that global AgTech investment amounted to $4.3 billion halfway through the year, with the investment set to outpace the $5.15 billion invested in 2020. Comparatively, Canadian venture capital investment overall as of September sat at $11.8 billion.
“Because we are focused in agriculture, and we understand agriculture at a depth that perhaps most funds don’t, we’re also looking at how we can embed impact into the agricultural environment,” said Sunstrum.
“That takes the form of trying to make agriculture more profitable at the same time as being sustainable,” she added. “And we really are looking at the environmental impact of agriculture and how technologies that we invest in can assist farms and ranches with this.”
The51 fund aims to do this by working with its portfolio companies to ensure they meet both environmental, social, and governance (ESG) and equity, diversity and inclusion (EDI) targets. “The51 hopes this approach will set a new standard for businesses operating in the Food and Agriculture Technology sectors in North America,” the firm stated.
But it’s not all about making an impact. The51 pairs impact and investing from a diverse lens with returns that any venture fund is looking for, maybe even better.
Statistics show that having women and diverse teams and leaders creates stronger returns than companies without. A Kauffman Fellows study states that privately-held tech companies led by women are more capital-efficient, achieve 35 percent higher return on investment, and, when venture-backed, bring in 12 percent higher revenue than male-owned tech companies.
To ensure it can help diverse founder-led startups win big, The51’s Food & AgTech fund will invest in companies at the early stage. The fund will invest in pre-seed companies with a focus on Canada but is also open to global opportunities.
“We need to change the face of venture capital funds in order to change the face of the founders getting invested [in] and I think … The51 is really making a statement that we’re going into pre-stage,” said Chaimahawong.
“We’re not only going after diverse founders, we’re going early as well, where a lot of venture funds may say, ‘well, that’s so risky,’” she added. “We’re really investing in the individual … [and] we’ll be enabling the next generation of diverse entrepreneurs to be entering the food and AgTech businesses, not just the ones that are already working on it today.”