A Silicon Valley investment and innovation platform has launched a global fund based in Calgary that will help agrifood start-up companies scale up.
“Obviously, a significant part of the fund will be focused for Canada specifically,” said John Hartnett, chief executive officer of SVG Ventures, which is known for its Thrive business accelerator programs.
“But at the same time, we’ll be investing in very successful global technologies that will improve the food supply chain, and if we can bring some of those great companies to Canada, that’ll be kind of a win-win.”
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The Pioneer Fund will help agrifood start-ups develop and scale up innovative and sustainable technologies.
“Sustainability I think is going to be a critical part of our future,” said Hartnett.
“It’s hard to avoid climate change in today’s world and the challenges we’re all experiencing, but the five key investment categories for us would be around biotech and life sciences, food nutrition, the supply chain, digital farming and sustainability… and we’re going to be looking for solutions that can help farmers deliver on sustainability, but at the same time, do it profitably.”
The lead investor in the fund will be Farm Credit Canada, which is a federal crown corporation with a loan portfolio of more than $44 billion. Another investor is the Argosy Foundation, which is a private family foundation based in the United States whose mission is to support people and programs that make society a better place to live.
Thrive collaborated last year with the United Farmers of Alberta Co-operative Ltd. and Olds College on a report called Realizing the Potential for Agtech in Alberta. It said although the province has what it takes to be a global leader in agricultural innovation, farming lags other industries when it comes to digitization and adopting new technological solutions.
Such work with UFA during the last few years has helped SVG Ventures and Thrive learn about the specific challenges farmers are encountering, said Hartnett. “And being close to the farmer is an important part of coming up with solutions that can solve the problems for the farmer, and that’s where we see a great opportunity.”
The Pioneer Fund, which plans to make $75 million in capital commitments, will be aimed at a particular point in the evolution of young agrifood businesses.
“I don’t think there’s a significant challenge for start-ups getting off the ground in Canada because I think there’s quite a number of government support and individual organizations that are helping getting companies going,” said Hartnett.
“I think the bigger challenge is helping them scale, and I think where we come in is obviously, we’re not just investing. We also have an ecosystem and a series of major corporations that we work with that can help grow and scale those companies.”
SVG Venture’s partners have ranged from media companies such as Forbes to major North American and global corporations such as BASF, Bayer, Corteva, Intel, Kubota, Land O’Lakes, Nutrien and Shell. They have helped Thrive build a community of more than 8,000 start-ups in 100 countries.
“And given the fact that we’re a global fund — we’re based here in the U.S., but also in Canada — we can really help (start-up) companies break into the U.S. market and go global,” said Hartnett. He pointed to Milk Moovement, a firm based in Halifax, N.S., that offers software-based monitoring systems for dairy products as they move through the supply chain.
“They’re a young company that we met very early on in their journey and probably 100 percent of their revenue, what they were doing was in Canada with a very small team of four or five people. And today, they have a team of 50 people and 97 percent of their revenues come from the United States.”
The agri-food talent available in Alberta is a big part of what brought SVG Ventures to the province as the focus of its efforts in Canada, said Hartnett. Although it is better known for its oil and gas industry, Alberta is also a powerhouse in terms of agriculture across the country, he said.
SVG Ventures announced last year it was establishing the Thrive Academy program in Alberta to help pre-seed and commercialize research in Western Canada. It also launched the Thrive Venture Studio program to form new companies “in response to some of the most pressing issues across the agri-food value chain,” said a statement by Alberta Innovates.
The provincial corporation provided $3 million to establish the two programs. Thrive also became a resident partner early last year in Platform Calgary’s new Platform Innovation Centre, where it launched the Thrive Agrifood Innovation Digital Hub for Canada.
As a country on the doorstep of the U.S., Canada is a “very easy market to do business with agriculture,” said Hartnett. “Canada is seen as one of the top five countries in the world and we focused on the top countries that we can create an impact, and I think the journey has started with basically the entrepreneurs that we’ve seen here.”
