The firm, which bills itself as Australia’s first agrifood technology-dedicated VC firm, launched in 2019 and held a first close on A$20 million in March 2020, after securing cornerstone commitments of A$8 million each from the Clean Energy Finance Corporation and Grok Ventures.
Co-founder Sarah Nolet told Agri Investor that the fundraise was oversubscribed, with the firm surpassing its initial target of A$30 million.
“That was not something we expected to happen and we’ve been really thrilled with the support,” she said.
“There are a few tailwinds behind agriculture investment for sure. One is more interest in climate, as well as people being at home and paying more attention to food and what they are eating. In terms of Australia specifically, we’re seeing more interest globally in how Australia is at the [leading] edge of some of these challenges.
“When it came to Australia five and a half years ago, there wasn’t much of an early-stage ecosystem, therefore, there weren’t sources of this kind of dealflow. And there wasn’t a conviction investor in this space – having that conviction has given people the confidence to invest in this space.”
Nolet said that the fund’s investors include family offices, high-net-worth individuals, and primary producers, as well as two unnamed global agrifood corporates.
The fund has made six investments to date: waste management start-up Goterra; autonomous agricultural vehicle platform SwarmFarm Robotics; US-based carbon marketplace Nori; cellular agriculture company Vow; digital crop protection platform RapidAIM; and sustainable protein company Nowadays.
Tenacious Ventures is aiming to make around 15 investments from the fund in total.
Nolet said that the firm was “fully focused” on deployment of the first fund and said that a successor vehicle “could be on the cards” at some point in future.
On the potential size of the Australian agtech opportunity, Tenacious Ventures co-founder Matthew Pryor said: “We talk a lot in Australian agriculture about the A$100 billion farm production output figure, but we increasingly want to see a focus on a number of a similar order coming from the export of innovation in the form of products and services that come from the same ecosystem.”
When it committed to Tenacious Ventures’ fund in 2020, CEFC chief executive Ian Learmonth said its commitment could help attract more institutional capital to Australian agtech: “The agricultural sector poses a demanding climate change challenge: how to produce more food, more efficiently, for a growing population amid a more extreme climate, while also reducing greenhouse gas intensity and emissions.
“As a major food exporter, Australia has an opportunity to be at the forefront of innovative technology solutions than can address these challenges. With this investment, the CEFC is supporting an exciting Australian industry of the future with the potential to make a meaningful contribution to lowering global emissions, while supporting our agriculture sector.”