Dememter's new Agrinnovation Fund raises $45 million
Jul. 31, 2018
The new fund attracted investment from major players in the agricultural sector including the Soufflet Group, Elephant Vert, Unigrains, Exel Industries and Groupe Rocher.
Headquartered in Paris, the firm has spent the past 12 years focusing on renewable energy and ecological investments, supporting 120 projects during that time. This includes working with 15 current projects, which have strong cross-over agtech relevance, a link which prompted the launch of the Agrinnovation fund one year ago.
"Selecting agtech for targeted attention was a natural step for us, based on our working with clean tech and environmental orientated developments, alongside realizing the strength and potential of the agtech projects we already have on our books," Riadh Shaïek, partner at Demeter, told AgFunderNews.
"Without initially focusing on the sector, we've actually been one of the most active investors in agtech in Europe in recent years. As a result, we decided it was time to establish a dedicated agtech fund to better utilize our experience of the sector while also being able to offer more specific funding and support to a sector which we see as having a hugely important future."
With €45m already secured from institutional investors, corporates and family offices, Demeter is planning to name its first Agrinnovation startups by the end of September.
"Our investment committee is due to meet in early September to consider a list of candidates with the aim of identifying businesses which have the potential to become the 'next big players' in the sector," said Shaïek.
"In due course, we plan to commit to around 20 agtech startups, providing each with up to €1m of early-stage funding with the potential for the very best to qualify subsequently for €6 million to €8 million of follow-on finance.
"All 20 will also benefit from our knowledge of the market and our track-record ability to help them develop long-term businesses."
Demeter's current portfolio of clean tech and environmental businesses features some 'definite rising stars' from an agtech perspective, according to Shaïek who named the following four companies with special agtech relevance:
• Ynsect, which is developing feed ingredients for aquaculture;
• Lactips which is producing new biopolymers from milk proteins;
• Naïo Technologies, which is providing robotic solutions for agriculture; and,
• Sencrop, which is are working on weather sensors for farmers.
"Looking at these companies, it's clear that we're all moving into a new era of agriculture which is increasingly being driven by rising environmental and technology demands. The sector is also heavily influenced by regulations which are pushing farmers towards new practices and expectations. That's what the new Agrinnovation Fund, and the 20 startups who will join us, is all about."
In addition to its Paris HQ, Demeter has two other French offices, located in Grenoble and Metz, and a Spanish center, based in Madrid. The firm has a total investment team of 33 people, working with companies at all stages of development from innovative startups through to mid-cap companies and large-scale infrastructure projects.
"While we've not set any geographic limits on our choice of investment candidates, we obviously see France and Spain as hugely interesting markets with great potential, in which we already have excellent experience and a strong network," said Shaïek, adding that during an early stage investment it is very important that companies are well connected with their potential marketplace.
"In addition to our two 'home' bases, we also have strong networks in the Benelux countries, Germany, Denmark and the Nordic countries and are open to investing in the UK and Ireland, as well."
Since setting up, Demeter has managed investments worth €1bn across its 120 developments.
"We are very proud of our first closing of the Agrinnovation Fund which strengthens our presence in the fast-growing sector," said Demeter's general partner, Eric Marty, adding that the new fund is aimed at addressing one of the major challenges of the coming decades.
"This is to produce more in a world constrained by climate change, alongside the need to reduce the use of chemical inputs and address changing consumer demands."