Tenacious Ventures launches second fund with A$70m target

Agtech-focused venture capital firm Tenacious Ventures has kicked off fundraising for its second fund, targeting A$70 million ($47 million; €47 million).

The target for Tenacious Ventures Fund II is double the A$35 million figure that Fund I closed on in mid-2021, surpassing its A$30 million target.

The firm is likely to hold a “modest first close” in the coming months, partner Matthew Pryor told Agri Investor. The firm’s first vehicle has exhausted its allowance for overseas investments outside Australia, he said, so a close for Fund II would allow the vehicle to begin deploying internationally in parallel with Fund I completing its deployment in Australia.

“[The fund launch] has been catalyzed by this period where there is a two-speed economy in the agtech sector. The tech side has seen some challenges [with valuations], but the ag side is a bit more buoyant,” Pryor said.

“On the investments we’ve made through Fund I, it’s still early days and we still have plenty of work to do. We’ll be doing more in Australia but adding a couple of additional geographies: Australia, New Zealand and North America are the primary areas that make sense for the fund.”

The fund will pursue a broadly similar strategy to is predecessor vehicle, Pryor said, focusing on seed and pre-seed funding rounds, acting as a high-conviction investor. “The fund, at A$70 million, would be twice as big as Fund I, but we wouldn’t invest in twice as many companies,” he added, suggesting that larger ticket sizes for investments will be a target.

Pryor said the fund would target largely similar investors to its first fund, but would hope to appeal more to institutional capital given the fact the second vehicle is bigger and able to accommodate larger commitments.

Tenacious Ventures launched in 2019 and closed its first fund on A$35 million in 2021, after securing cornerstone commitments of A$8 million each from the Clean Energy Finance Corporation and Grok Ventures, the private investment firm owned by Mike and Annie Cannon-Brookes.

The firm has made a string of investments from Fund I, including natural capital platform Cecil; 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.