Tenacious Ventures hits A$20m first close and makes inaugural investment

The VC firm, launched in 2019, has backed waste management start-up Goterra’s A$8m Series A round.

Venture capital firm Tenacious Ventures has made its first investment following a first close in Q1 2020.

Tenacious Ventures, which bills itself as Australia’s first agrifood technology-dedicated VC firm, held a first close at A$20 million ($13.7 million; €12.2 million) earlier this year, on the way towards A$30 million target for its inaugural fund.

The fund has now made its first investment, co-leading an A$8 million series A funding round for waste management start-up Goterra. The size of Tenacious’ commitment was not disclosed.

Also leading the round was Grok Ventures, the private investment fund of Mike and Annie Cannon-Brookes. Mike Cannon-Brookes is a billionaire and one of Australia’s wealthiest individuals, making his fortune as the co-founder of software company Atlassian. Grok Ventures is also an LP in Tenacious Venture’s fund, having committed A$8 million to the fund last year.

Goterra uses tech-enabled modular infrastructure, such as shipping containers, to deliver a biological process that can manage waste using the larvae of black soldier flies. Depending on the inputs used, the larvae themselves can then be used as an output of the process as a protein supplement in livestock feed.

The firm is already providing waste management for businesses in the hospitality, infrastructure and health sectors, including a trial across seven McDonald’s restaurants in the Australian Capital Territory.

Tenacious Ventures co-founder and general partner Matthew Pryor told Agri Investor: “The distributed nature of Goterra’s operating model suits different geographic constraints. Putting organic waste in landfill is generally problematic – there isn’t enough [landfill space] and it’s a highly methane-emitting process.

“Another challenge is the logistical relationship between where waste is sourced and where it’s processed. In larger, more spread-out places, the total transport cost is a big factor in the economics. In more densely populated geographies, just having the space to put any facility is a major constraint. It makes the Goterra approach highly adaptable to a wide range of waste management needs.”

Goterra first raised A$1.8 million in a seed funding round in 2018, which Grok Ventures also backed. Other investors in the Series A round included tech syndicate Eleanor Venture, CAGES Foundation, Giant Leap and Rampersand.

Pryor said covid-19 had not disrupted Tenacious Ventures’ launch in a significant way and the firm was able to move from fundraising to investment in Q1 2020 as restrictions took hold.

“We were very happy to get to first close, but we’ve been around the environment for a long time so we had a significant growth pipeline of opportunity. We were happy spending the balance of our time in late Q1 and all of Q2 on getting into investing mode.”

Pryor would not be drawn on specific timelines for a final close of the firm’s inaugural fund, but said he expects Tenacious to be “actively back into fundraising in the near term,” making “significant progress” towards its A$30 million target this calendar year.

The firm’s other co-founder and general partner Sarah Nolet told Agri Investor Tenacious hopes to announce its second investment soon, with more in the pipeline.

“We have a strong pipeline after that, including companies we’ve known for a while and ones we’ve met more recently. [They operate in sectors including] software, hardware, on-farm, off-farm, and the supply chain – we really want to dig into the breadth of the opportunity that agri-food represents,” she said.

“We want to provide high-conviction capital to support businesses as they grow.”