First look
RRG-backed SPAC hits buffers
Sustainable Development Acquisition Corporation, a SPAC ultimately backed by RRG and Capricorn Investment Group that raised $316 million, is to be dissolved.
SDAC was formed in February 2021 and faced an August 12, 2023 deadline to complete a merger after its initial deadline of February 9, 2023 had been extended.
The redemption of public shares is expected to be completed by July 24 at a price of $10.39 per share.
SDAC was formed as a partnership between RRG Global Partners Fund – an RRG vehicle – and Sustainable Investors Fund, a private investment vehicle associated with Capricorn Investment Group.
A statement announcing the dissolution did not offer any specific reasons as to why the vehicle is being liquidated.
The SPAC raised $316 million in an IPO that brought it onto the Nasdaq Exchange at $10 per share. It was intended to merge with a company operating in the UN SDG-related sectors of water, food and agriculture, renewable energy, environmental resource management sectors and related technologies.
SDAC partner Nicole Neeman Brady, who also serves as an operating partner and managing director at RRG, told Agri Investor in February 2021 the search was likely to include a focus on companies in water irrigation, filtration, re-use, treatment and handling.
SDAC’s prospectus described RRG and Capricorn as having developed a “pioneering” ESG integration and implementation process over the course of eight collaborative deals starting in 2006.
Read the full story here.
They said it
“We were, for better or worse, spoiled by the last decade of very low interest rates and very low inflation”
BC Partners’ Nikos Stathopoulos unpicks (registration required) some of the reasons for the price expectation mismatch between buyers and sellers that has led to a fall in the number of deals across private markets.
Fund watch
Flora Ventures hits the ground running with $50m first close
Flora Ventures launched an $80 million agtech vehicle and simultaneously announced the fund has reached a $50 million first close.
The Israeli venture capital firm’s vehicle will invest in early-stage Israeli and European start-ups that are developing solutions that can contribute to building a healthier, more sustainable and resilient food system.
The fund was backed by Israeli insurance and financial company Harel Group, plant nutrition and fertilizer specialist Haifa Group, family offices and Sadot Kibbutzim, a co-op bringing together more than 185 Kibbutzim.
The Israeli VC firm said it secured its first close commitments “in just four months by identifying an opportunity to fill technology gaps such as food security, digitization, sustainable agriculture and food as medicine.”
Read the full story here.
Norway’s KLP and Investinor seed forestry fund with $30m
Norwegian pension fund KLP has partnered with asset manager Investinor to launch a NKr300 million ($30 million; €26 million) forestry vehicle.
The fund, called 3K6, will be managed by Investinor and has been equally seeded by the two partners. Norwegian forestry industry stakeholders will contribute assets to the vehicle through Investinor subsidiary and forestry venture capital investor Shelterwood AS.
According to the partners, Norway had the potential add a further $319 billion to its economy through its forestry industry over the past 20 years through added value processing – 3K6 will seek to make investments to facilitate this.
The vehicle will make growth equity and venture-stage investments in forest-related businesses focused on further processing of forests products.
Read the full story here.
Decarbonization
Australia plots agriculture decarbonization
The Australian federal government will start developing sector-specific plans to accelerate decarbonization, with agriculture and land one of the six sectors chosen.
Climate change and energy minister Chris Bowen announced the plans at the Clean Energy Council’s Australian Clean Energy Summit 2023 in Sydney, with the plans set to feed into both the government’s Net Zero 2050 initiative and its projection of reducing emissions by 48 percent by 2035 compared with 2005 levels.
Bowen confirmed the plans would not come with individual sector-specific emissions reduction targets, as has been controversially implemented for agriculture in other countries such as New Zealand and the Netherlands.
“There won’t be targets sector by sector – there’ll be plans which then feed into our 2035 and 2050 targets. We’ll say [for each] sector, here’s how we think it decarbonizes and fits into the 2035 and 2050 targets. It’s a small distinction but an important one,” Bowen said.
“Inevitably, different sectors have different timelines and decarbonization pathways, because they are dealing with different challenges and different technologies coming forward at different times.
“Agriculture is very different from the built environment. They both need to be working with us and we need to be working with them on decarbonization, but they are very different beasts and are going to have different pathways.”
Read the full story here.
Sustainability
Agriculture is second ‘fastest growing’ sustainable investment theme
Food and agriculture is the “next largest and fastest growing” sustainable investment strategy behind the energy transition, according to Campbell Lutyens’s associate Toby Barnes.
Barnes is the lead author of the placement agent and consultant’s latest report, which maps funds totaling $60 billion in AUM to build a picture of the current state of sustainable food and agriculture private markets investment.
Most of this growth is now concentrated towards the top of the value chain, as managers respond to an overcrowded consumer market prone to cyclicality, according to the report.
“Until about 2022, a lot of the focus and spotlight has been on things like alternative proteins and cultivated meats,” Barnes told affiliate title New Private Markets. “Now we’re seeing LP and GP’s attention shift further upstream and that’s where we’re seeing the concentration of capital.”
Despite the growing interest in the asset class, there are still “idiosyncratic risks and barriers to entry” that pose a challenge for both managers and investors. “A number of strategies don’t fit nicely into [LP’s] buckets,” Barnes explained.
“They fit somewhere between what LPs would consider real assets and what they would consider PE, buyout or venture. So they don’t fit nicely if LPs have hard return hurdles. That can make marketing strategies a little bit more difficult for GPs or the internal approval process a bit more challenging for LPs.”
Read the full story here [registration required].
VC fundraising
Sylvera, a British carbon credit ratings company, raised $57 million in Series B funding round led by Balderton Capital, with participation from Fidelity Strategic Ventures, 9Yards Capital, Index Ventures, Insight Partners, Bain & Company, Salesforce Ventures, Speedinvest, Seedcamp and LocalGlobe.
BLUU Seafood, a German biotechnology start-up, raised a €16 million Series A funding round led by Sparkfood and LBBW VC, with participation from SeaX Ventures, Manta Ray Ventures, Norrsken VC and Delivery Hero Ventures.
Isometric, a British carbon removal registry platform, raised $25 million in a seed funding round backed by Lowercarbon Capital and Plural. The round was also backed by angel investors Niklas Zennström (founder of Skype), David Helgason (founder of Unity Technologies), Ross Mason (founder of MuleSoft) and Ilkka Paananen (founder of Supercell).
Aviwell, a French agrifood start-up, raised €9 million in seed funding round led by Elaia Partners and MFS Impact Investment Development of Boston. The company was also awarded non-dilutive grants from the European Innovation Council and BPIFrance.
Also in the news…
Feed market and climate risk: a worrying landscape for investors
Climate change is causing financial issues for the agriculture sector, particularly when it comes to feed prices, says the FAIRR Initiative’s climate economist. (Agri Investor).
UK PE and VC fundraising nearly doubled year-on-year in 2022 – BVCA report
Fundraising by UK private equity and venture funds was at its highest over the past three years, at £70.2 billion ($90.2 billion; €81 billion), with almost one-third contributed by North American LPs (Private Equity International [registration required]).
Key considerations before dabbling in AI
The adviser Flexible Plan Investments has established a committee to survey how AI may be being used throughout the organization and to potentially develop guidelines. ‘We’re working across departments to ask, ‘what’s a reasonable use of this?’ (Regulatory Compliance Watch [registration required]).
Russia pulls out of Black Sea grain deal
Moscow’s move puts at risk tens of millions of tonnes of food exports from Ukraine (Financial Times [paywall]).
A new framework for regenerative ag wants to help fashion industry measure impacts
Title Exchange is working to define and measure regenerative agriculture, which has been embraced by fashion but does not yet have formalized guidelines (Vogue Business [registration required]).
Today’s letter was prepared by Binyamin Ali, Chris Janiec and Daniel Kemp
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