Data Collective eyes existing portfolio companies for later-stage fund

The venture capital firm expects that agriculture technology firms will make up a portion of the $125m Opportunity Fund.

Data Collective (DCVC), a venture capital firm that focuses on big data and IT infrastructure, is currently investing Fund IV.

The opportunity fund invests in the later-stage funding rounds of existing portfolio companies from its previous three funds, Zachary Bogue, co-managing partner of DCVC, told Agri Investor.

The firm’s first-ever opportunity fund closed on $125 million last December and is expected to invest in between eight and twelve companies in its existing portfolios, according to Bogue. “Could there be a couple agtech companies in the opportunity fund? Absolutely,” he said. “Companies that are driving eight digits or millions in book revenue are really being considered.”

The venture capital firm closed its third fund on $125 million last year in June; its biggest one. “There is still a lot of dry powder in Fund III; about less than half,” Bogue said. Fund III will invest in fewer than 10 agtech companies, he added.

Talking about investment strategy, DCVC values growth potential and whether companies have computational and algorithmic advantages. Companies that have technology to analyse data are more appealing to DCVC, Bogue said. “There is so much data associated with agriculture and now it’s possible to crunch it to increase yields or value,” he said. “We look for agtech companies that do a lot of agtech work computationally rather than in the lab,” he added.

Blue River Technology, a DCVC portfolio company, uses robots in the fields that look at every single plant that grows in a field and selectively optimises the spacing or weeds plants. “It’s definitely a good candidate for the opportunity fund,” Bogue said.

DCVC has not invested in any water technology companies but “with an increasing need of water and land efficiency, and capital efficiency of creating an agtech start-up, the growth trend in agtech sector will continue”, Bogue added.

Bogue told Agri Investor that DCVC is seeing a number of water technology companies and is still looking with a computational advantage; “the ones that are really good on big databases”, said Bogue.