Astanor’s $325m debut fund close taps European SWFs and family offices

Co-founder Eric Archambeau says high-level discussions around the EU’s Farm to Fork strategy framed a fundraising effort that accelerated after covid-19’s initial spread.

Astanor Ventures’ $325 million debut fund close was supported by five European sovereign wealth funds, a mixture of large family offices and a university endowment, the firm’s co-founder Eric Archambeau told Agri Investor. 

The investors were all from western European states, Archambeau said. The family offices had connections to tech and agriculture and made investments of between $10 million and $35 million, he added.

SWF commitments into the food and ag focused impact investor’s vehicle were not formally related to any specific policy requirements, Archambeau said, but Brussels-based Astanor’s fundraising environment has been framed by years of discussion leading up to the EU’s Farm to Fork initiative.

“That didn’t come out of a vacuum. It was part of a broader discussion between the different states about how to achieve reductions in fertilizers, pesticides and even water consumption from the agriculture sector,” he explained.

The EU has traditionally relied on input from large established companies to inform ag sector policies but support for Astanor’s portfolio of start-ups pursuing tech-enabled food production, reflects policymakers’ growing recognition that innovation will play a key role in meeting future production challenges, Archambeau said.

“What we propose is definitely in line and in sync with what the EU is looking at achieving from a systemic point of view,” he said. “When I first talked to them a year and a half ago, it was: ‘Oh, wow, interesting, but we don’t necessarily have a budget for that.’ These budgets were really created at the end of 2019, early 2020.”

In its statement, Astanor highlighted its close as marking “Europe’s largest impact fund” and said the firm views accelerating progress towards the EU’s climate policy goals as “integral” to its mission.

Some among Astanor’s sovereign wealth investors were already interested in investing, but increased their investment size by up to 100 percent amid increased attention on food supply chains following covid-19’s initial spread.

Archambeau said Astanor’s fund is about a third invested in support of what the firm describes as a multi-stage tech strategy focused on companies with potential to help meet “systemic challenges“ in ocean health, agriculture and food production.

The vehicle has backed more than 20 companies in the US and Europe, including German indoor farming startup Infarm, UK-headquartered seaweed-based packing material supplier Notpla and MagGrow, a Dublin, Ireland headquartered company that produces patented spraying systems equipment that reduces pesticide use.

Last month, Astanor led a $373 million Series C for Ynsect, a Paris-headquartered company developing a defatted protein derived from mealworm larvae that is fed to livestock and pets. October also saw Astanor join the World Bank-linked International Finance Corporation and Singaporean sovereign wealth fund Temasek in a $30 million financing for Apeel, a California-headquartered company that produces an edible coating that extends shelf life of fruit and vegetables.

Archambeau said that although Astanor’s initial strategy was to raise a small fund that would be complemented by special purpose vehicles and co-investments, it found the companies it is looking to support are better served within a traditional fund structure allowing for spreading of risk.

“There’s a good Darwinian reason for which funds were invented,” said Archambeau, who previously helped launch UK-headquartered early stage venture capital firm Balderton Capital.

“That being said, we will have co-investment opportunities for each of them [LPs] alongside the fund as we go through later-stage evolution of the portfolio. There is definitely an appetite for many of them – I would say most of them – to co-invest in the later-stage life of our portfolio companies.”