Finistere Ventures II holds first close on $37.5m – update

The life sciences venture capital firm is raising $200 million for its second fund that will have a strong focus on agricultural innovation. VC firm AVAC and BayerCrop Science have invested into the fund as partners.

*adds information about an investing partnership with AVAC and Bayer CropScience.

Finistere Ventures, the agtech venture capital firm based in San Diego, held a first close of its second fund on $37.5 million earlier this month, according to a Securities and Exchange Commission (SEC) filing. Finistere Ventures II is targeting $200 million, according to the filing.

Fund II’s first close coincides with the closing of a related feeder fund, Finistere Ventures II Feeder Fund, on its $20 million target, according to SEC filings.

Finistere Ventures initially planned for a first close in the first half of 2013, according to its website; local reports indicate that the fund was first launched in 2011. But the firm has now partnered with AVAC, the Canadian VC firm, and Bayer CropScience, an arm of the chemical and pharmaceuticals giant, to reach a first close.

“We have all put in money into the first closing,” Michael Raymont, chief executive of AVAC, told Agri Investor. “[The hard cap] is $200 million so we are working on raising $150 million for now. The first closing is finished and we are now starting the second round that is expected to close within a year.” Raymont declined to disclose the size of each party’s commitment.

Finistere Ventures II, also known as FVII, will focus on new technology solutions in food productivity, climate change and changing population demographics. Finistere and AVAC’s newly established subsidiary, Verdex Capital, will source deals as joint general partners to the fund. Verdex will focus on Canadian opportunities and Finistere will focus on the US. Bayer CropScience will also play a role in identifying opportunities, according to Raymont.

AVAC launched Verdex as its “latest brand” this week describing it in a press release as a private investment firm to focus on agtech investment and opportunities. The joint venture with Finistere was established during the summer of 2014.

Raymont said that Verdex and Finistere have looked at 30 to 40 possible investment opportunities and the two partners “are now down to a hot list of five”; most of them are based in the US. “We are looking into agtech that will improve the productivity and efficiency in management practice and the supply chain,” he added.

According to AVAC, 80 percent of the agtech fund will be invested in North America and up to 20 percent will be invested outside the region.

SEC filings show the venture capital firm is not using a placement agent to help with fundraising. The firm’s first successful agri-related investment was Athenix, a biotech company, which it invested into in 2006 and exited in 2009 when it was acquired by Bayer CropScience.

Finistere raised $35 million across two funds in 2005: Finistere Oceania Partners I and Finistere Chicago Partners I.

AVAC has 16 years of early stage investment experience and $118 million invested. It has a strong focus on food and agri although it has invested into other sectors such as life sciences, communications and industrial technology.

Finistere is also in partnership with Larta Institute, an organization focused on incubating and commercialising technology start-ups, and the pair launched an agtech accelerator platform last August.