Cultivian Sandbox fund misses $200m target

Food and agtech-focused venture capital firm Cultivian Sandbox Ventures closed its third fund on $135 million last month, falling short of its $200 million target.

Cultivian Sandbox Food & Agriculture Fund III was launched in late 2017 and had raised $105.4 million from 26 investors as of November, according to a regulatory filing. Cultivian Sandbox announced its close on 23 April.

“Candidly, we’re very happy,” managing director Ron Meeusen told Agri Investor. “Our attitude towards fundraising is pretty much, we’ll set a target, but the market tells us what the appetite is.”

In a statement, Chicago-headquartered Cultivian Sandbox wrote that investors within Fund III included “market-leading companies across the food and agriculture value chain”, such as Archer Daniels Midland, GROWMARK, Smithfield Foods and others.

Meeusen said Fund III was Cultivian Sandbox’s first to secure investment from outside the US, adding that Sumitomo Chemical America, a subsidiary of Sumitomo Chemical Company of Japan, is not the only international LP invested in the fund, though it was the only such investor willing to be named.

Plans call for the firm to work with investors to source insights about technology and markets and facilitate their collaboration with start-ups, according to the statement.

“Cultivian continues to be an ag and food industry thought leader, providing us with forward-leaning visibility into promising technologies for better meeting the needs of farmers and consumers,” said Corteva Agriscience chief technology officer Neal Gutterson.

Meeusen said that in the time since Cultivian raised its last fund in 2015, there had been a significant increase in demand from corporations viewing venture capital as a window on new technologies, but interest among financial investors had seen slower growth.

Though Cultivian Sandbox was not consciously trying to move away from traditional investors, “it just kind of worked out that way,” Meeuson said.

“This is still a new sector,” he added. “Many are watching our earlier funds and they are waiting for the exits to come through in enough of a number to let them put together models. I don’t think we’re there yet.”

Cultivian Sandbox invests in companies at growth stages ranging from seed to late stage, typically investing between $5 million and $15 million over the course of each investment. Founded in 2013, the firm has completed 20 investments and five exits.

The firm’s previous fund closed on $114 million and was used to support investments including satellite data analysis firm Descartes Labs, farm management software provider Conservis and Vestaron, a bioinsecticide producer.

Investments from Fund III thus far have included Full Harvest, an online marketplace that connects producers with customers interested in imperfect or excess produce, and Phylagen, which verifies the origin of goods using environmental microbiome signatures.

Meeusen said most of the strategic investors within Fund III have either their own venture capital unit or have already invested in other venture funds.

“What they tell us is that we see different dealflow than they do,” Meeusen said. “In some cases, their mandate is to find later-stage deals, so when they find early-stage deals, rather than just passing on them and hoping to get another bite at the apple years from now, they can pass them along to us and they feel that they are at least able to track them.”