Impact investor Astanor Ventures has closed its second flagship vehicle on €360 million, exceeding its €350 million target.
Astanor Ventures II was launched in December 2021 and a large part of the vehicle’s fundraising took place last year, partner Christina Ulardic told Agri Investor.
The strategy for the venture capital fund is largely unchanged from its predecessor and will mainly target Series A and B-stage food value chain companies that are trying to solve social and environmental issues.
“The world came to a standstill in 2022 for a while but then the adjustment to a ‘new normal’ arrived, which hopefully will not actually remain the new normal, and then there was momentum again later in that year,” said Ulardic.
“A lot of our Fund I LPs, many of them actually returned and reinvested into Fund II. They saw that this is not a small sector fund but is like a big platform play where things actually have to change. The reception has been very positive.”
Astanor Ventures has amassed a portfolio of more than 45 companies, which includes start-ups such as mealworm specialist Ynsect, vertical farmer Infarm and natural biopesticides and biostimulants developer Alphea.Bio, among others.
Ulardic added that while there has been some correction in the market with regards to valuations at the growth stage following the 2022 downturn, early-stage companies with good fundamentals have experienced minimal adjustment.
One of the knock-on effects of macroeconomic that is impacting early stage companies is a desire to have fewer funding rounds, which in turn slowed down the pace at which capital can be deployed.
“If you compare it to 2021, for example, you might have had a seed raise and then six or eight months later a Series A raise – we are not we’re not seeing that fluency anymore,” said Ulardic.
“We’re seeing smaller rounds, slower burns, making sure that companies are well funded and that they are funded for maybe two years of runway. That obviously impacts the deployment also for us so you would expect to see the seed stage companies a little bit later and for them to go a bit slower in the current market environment.”
With regards to the parts of the value chain that are most in demand, Ulardic said trends such as food as health, labor shortage solutions such as robotics and automation, sugar alternatives and on-farm soil health continue to experience the strongest tailwainds.
“If you’re talking about someone who has a chronic condition, for example, that can be mitigated by certain types of foods or probiotics, versus something that is perhaps perceived more as a ‘nice to have’ luxury item, there is a really big distinction here.
“So if you latch on to something that is either driven by regulatory demand or driven by pure medical necessity, you are in a very different space and this is what the LPs have come to realize and this is where we hope to excel.”
Astanor Ventures has more than €800 million in assets under management, according to a statement from the firm.