The51’s Food and AgTech Fund has closed $30 million of a targeted $50 million. The fund intends to invest in diverse founders who are transforming food and agriculture with advanced technology, and will target pre-seed to Series A investments.
Farm Credit Canada is the lead investor, with limited partners (LPs) also including Alberta Enterprise Corporation, National Bank of Canada, family foundations and offices, and several undislosed individual accredited investors from agribusiness, farming, and industry backgrounds. Both Alberta Enterprise Corporation and National Bank of Canada are new LPs with the fund.
Previously, The51 announced soft circle commitments of $50 million in 2022, and later that year announced Farm Credit Canada as the lead investor.
The fund is focused on investing in women and diverse founders from across Canada and the United States.
When the fund was first announced in 2021, The51 said it hoped to raise $25-to-$30 million. That was expanded to $50 million after the soft commitments. The51 told BetaKit in an interview that it hopes to fully close the fund in June 2023. Like many in the tech community, The51 encountered less-than-favourable market conditions when it tried for an earlier close in 2022.
Referencing the time it’s taken to close the fund, Alison Sunstrum, managing general partner in The51’s Food and AgTech Fund, said the group was initially optimistic, but saw a shifting climate and a withdrawal of LP investors, generally.
“I think that was something that just about every fund encountered,” she said.
The Food and AgTech Fund is The51’s first sector-specific fund. The fund is focused on investing in women and diverse founders from across Canada and the United States, and is particularly interested in companies that are early-stage, have diverse leadership teams, and have the potential to scale globally.
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In fact, as the fund opened to investors, the thesis for the fund began to change. Initially, The51 was only going to make the fund available to female founders. But as different investors approached them, The51 has changed to investing in companies that focus on diversity, equity, and inclusion regardless of identity.
Currently, the fund has five full-time employees. Three of those are general partners, including Sunstrum. The other two are The51 co-CEOs, Judy Fairburn and Shelley Kuipers. Yuan Shi joined as the principal for the fund in 2022; Jodi Roworth is the CFO. Lisa Oldridge, environmental, social and governance (ESG) specialist, works part-time with the fund as well. Sunstrum said the company anticipates hiring an associate partner in British Columbia, and potentially another associate beyond that.
The investment criteria for the fund has not changed. “We’re looking at deep science and tech companies that can scale globally and that can transform food and agriculture,” Sunstrum said, noting that The51 is searching the entire value chain of agriculture for startups. The51 anticipates the average investment will be about $750,000 per startup, Sunstrum added.
The fund has made one investment to date, $350,000 into Synergia Biotech, an energy company that pivoted into agriculture and is creating a natural replacement for artificial blue pigment in food colouring.