The Clean Energy Finance Corporation and Grok Ventures have together committed A$16 million ($10.9 million; €9.9 million) to a new agtech-focused venture capital fund run by Tenacious Ventures.
Tenacious Ventures was launched this year by co-founders and general partners Sarah Nolet and Matthew Pryor, with a remit to focus on agtech venture opportunities in Australia. It began raising capital for the Tenacious Ventures Fund I this year, targeting A$30 million.
The CEFC and Grok Ventures will each commit A$8 million to the fund, helping it approach a first close which is expected “imminently,” Pryor told Agri Investor.
Grok Ventures is the private investment fund of Mike and Annie Cannon-Brookes. Mike Cannon-Brookes is a billionaire and one of Australia’s wealthiest individuals, making his fortune as the co-founder of software company Atlassian.
Pryor said the time was right to launch an ag-focused VC fund in Australia as opportunities were on the rise.
“We’re confident about the formula because Sarah and I have both been working in the start-up agrifood world for a couple of years,” he said. “We have a significant pipeline of opportunities that we’re preparing to invest in.”
On the commitments from CEFC and Grok Ventures, Pryor said he was “excited” to have the two funds on board.
“It gets us a very long way to our first close and there are a significant number of other investors [in the fund], from large family offices to private individuals who’ve spent a career in agrifood. There’s obviously always going to be a variation in the size of checks, but surrounding those early-stage companies with networks and expertise is also a major contributing factor [to its success]. We’re really excited about the collection of investors that we’ve put together,” he said.
CEFC chief executive Ian Learmonth said in a statement that Tenacious Ventures’ fund would help to attract institutional capital to Australia’s agtech sector, where per capita investment lags far behind that seen in other countries like New Zealand, the United States and Israel.
“The agricultural sector poses a demanding climate change challenge: how to produce more food, more efficiently, for a growing population amid a more extreme climate, while also reducing greenhouse gas intensity and emissions,” Learmonth said.
“As a major food exporter, Australia has an opportunity to be at the forefront of innovative technology solutions than can address these challenges. With this investment, the CEFC is supporting an exciting Australian industry of the future with the potential to make a meaningful contribution to lowering global emissions, while supporting our agriculture sector.”
The CEFC has made other investments in agriculture, including a A$100 commitment to Macquarie Infrastructure and Real Assets’ A$1 billion cropping platform in 2018 – its first equity investment in the sector.
In a statement, Mike Cannon-Brookes added: “Innovation in agriculture is desperately needed across the world to make our planet more sustainable.
“There’s no doubt that new ideas in agriculture will play a massive role in reducing carbon emissions, while also delivering return on investment. The economic upside for Australia’s economy is also huge.”