Lewis & Clark taps strategic and RBIC capital to add $70m

Managing partner David Taiclet says the firm’s early agtech investments helped attract institutional capital to its $169m Fund II, while interest in its $88m RBIC was not limited to Farm Credit System institutions.

Lewis & Clark Ventures has raised at least $70 million across two vehicles since late 2019 to support investments at the intersection of agtech and rural development.

The St Louis-headquartered firm describes the vehicles as a single $257 million growth equity strategy focused on “tech-centric sustainability companies” within agriculture.

Lewis & Clark said it has closed its AgriFood Fund II on $169 million and a separate Lewis & Clark RBIC Fund II on $88 million. A January regulatory filing showed AgriFood Fund II had at that point raised $109.5 million and a late 2019 RBIC Fund II filing showed the vehicle had secured $76.4 million from 10 LPs.

Managing director David Taiclet told Agri Investor that while family offices and high-net-worth individuals played important roles early in the fundraise for AgriFood Fund II, pension funds, endowments, foundations and strategics from the consumer product and agriculture industries also became investors in the vehicle.

“As people started to see exactly what we were investing into, it became much more concrete and we saw more institutional activity and interest,” he said. “And the fact that we partnered with a few key strategic industry players as well; they are LPs like anybody else, but we had that kind of insight into the industry as well.”

Rural Business Investment Company managers must go through a lengthy certification process managed by USDA that was established in 2014. It requires funds raise a minimum of $10 million and invest at least 75 percent of capital in rural areas with populations of 50,000 or less. At least half of RBIC capital must be invested into smaller enterprises and a maximum of 10 percent can be deployed in urban areas.

Lewis & Clark’s investments have included Cargill-linked farm inventory software provider BinSentry; San Francisco-headquartered plant science company Bright Seed and BlueNalu, a San Diego-headquartered cultured meat provider that secured $20 million in an early 2020 Series A and $60 million in convertible note financing earlier this year.

Taiclet explained that while some Lewis & Clark investments draw from only one of the two vehicles, others draw from both the RBIC and AgriFood Fund II.

“It’s the same dealflow funnel that we are looking at. When we look at a company, if the rural rules apply, we can use funds from the RBIC. If they don’t apply, we just invest out of our growth fund,” he added. “We have two pools of money and we can be creative about the structure of the investment because of the rural fund.”

Farm Credit System institutions have been the predominant investors into RBIC funds and Taiclet said that as the market has developed, they have been joined by banks and other rural development-focused institutions. He estimated about eight such RBIC funds have been established and said LP interest in the offering has included at least one pension fund.

“There is more interest from financial institutions and not necessarily all Farm Credit,” Taiclet said.

Lewis & Clark was established in 2016, when it launched an agtech vehicle seeking $45 million that closed on $25 million and formed one of three funds constituting the firm’s $128 million LAC Ventures Fund I, a representative told Agri investor last year.

Among the investments from that fund was Benson Hill, the crop data and analytic provider that recently entered into a SPAC merger, and New Leaf Symbiotics, a plant microbiome technology company that secured a Series D financing late last year that included S2G Ventures, Leaps by Bayer and SABIC Ventures.