Produce marketplace start-up secures $8m in Series A funding

Cultivian Sandbox Ventures joined Spark Capital in an $8.5 million Series A funding round for Full Harvest, a software platform that connects agricultural producers to customers for the sale of excess and imperfect produce.

Established in 2014, the Full Harvest marketplace has already facilitated the sale of more than 7 million pounds of produce. The company wrote that its platform has helped an unnamed large US farm increase its profit per acre by 12 percent and reduce the produce costs of participating consumer packaged goods companies by an average of 15 percent.

“We need to move beyond the archaic nature of buying and selling produce to get the most from each harvest and make sure no food goes to waste,” said Full Harvest chief executive Christine Moseley. “Using this investment to expand nationally and roll out new platform capabilities and produce offerings, Full Harvest will get more produce directly from farms to food and beverage producers – faster, fresher, more affordably and with enhanced traceability.”

Capital for Cultivian’s investment came from its Cultivian Sandbox Food and Agriculture Fund III, which has a target of $200 million, according to a late-2016 regulatory filing.

PE interest maturity

Cultivian Sandbox managing director Dan Phillips told Agri Investor that, while other companies have tried to bring together markets for excess produce before, Full Harvest is the first to entice large food companies and growers in a way that has demonstrated the potential of the market.

Although many of his firm’s investments are focused on commercializing cutting-edge scientific research into areas such as crop protection and animal health, Phillips said Cultivian’s investment in Full Harvest reflects its desire to diversify by both industry segment and stage of company development.

Companies such as Full Harvest that use technology to enhance the efficiency of the food supply chain are among those that have attracted increased attention from private investors of late, according to Phillips. He added that much of the interest in agtech shown over the past three or four years by private equity investors has been concentrated in seed-stage and Series A-stage companies.

“The capital of dedicated food and ag funds has not caught up to where some of the larger Series B and Series C and late-stage venture is starting to get to as these companies mature,” Phillips said. “We are seeing some – not just private equity but even other large sources of capital – see that there’s an opportunity to drive attractive deal terms and pick the best of the best that are emerging from Series A, or Series B-type stages.”

Elegant entry

For Spark – a product-oriented venture capital firm, with previous investments including Twitter, Warby Parker and Slack – the Full Harvest investment constitutes its most direct entry into the agtech market. While it has invested in indoor farming and alternative protein, Spark investor John Melas-Kyriazi told Agri Investor that the Full Harvest deal constitutes its entry into a very active agtech market that the firm has monitored closely.

“Food and agriculture has been an area we’ve been excited about for a long time,” Melas-Kyriazi said. “For us, investing in a company that’s broadly in the food-supply-chain space, we’re going to continue to learn so much and it’s inevitable that we are going to learn new things. So it’s possible that we’ll continue to make more investments in this specific part of the agtech space.”

Melas-Kyriazi said Full Harvest’s business reflects a trend seen in other industries, where entrepreneurs are increasingly focusing on aesthetic and technological improvements to business-to-business software platforms already in wide use within specific industries.

“The [food & agriculture] supply chain is just fascinating to us because as we’ve studied it, we’ve found there’s just so much inefficiency,” Melas-Kyriazi added. “Like every industry, it has its inefficiencies and its problems, and we think those problems can be solved by elegant software and elegant business models.”