Rabo’s Food & Agri Innovation Fund
In an interview with CleanTech News, Senior Investment Associate Daniëlla Vellinga outlined the driving forces behind Rabo’s Food & Agri Innovation Fund, their most exciting cleantech projects, and imparted invaluable advice for entrepreneurs in the current climate.
In light of COVID-19, Food and Agri innovation has never been more important. With farmers struggling to recruit labour, and global shipment networks strained, pioneering creative solutions are essential to ensure worker safety, and food security moving forward.
Recognised as an international leader in Food and Agri financing, these issues are at the heart of Rabobank’s operations. Founded by a group of Dutch farmers in the nineteenth century, Rabobank’s unique co-operative structure sets its operations apart from other large financial bodies, with innovation, collective growth, and sustainability firmly at the heart of its agendas.
Founded in 2017, the Rabo Food & Agri Innovation Fund is a crucial part of this. Investing venture capital in high-potential, early-stage Food & Agri companies, the fund complements Rabobank’s wider ‘Banking for Food’ strategy, marking a significant step towards accelerated agricultural improvements. The Food & Agri Innovation Fund invests between EUR 1mand 7 million in equity from Seed to Series B, with a geographic focus on Western Europe, North America and Israel.
“We consider investments anywhere along the Food and Agri value chain, with particular focus on ambitious companies that operate in sectors where we can optimally leverage the bank’s knowledge and expertise, network, and position to help create shareholder value.”
In an interview with CleanTech News, Senior Investment Associate Daniëlla Vellinga told us more.
Motivations
“The mission of the bank is growing a better world together,” Vellinga begins. “Because we’re founded by farmers we really have strong roots within the food and agriculture sectors,” explaining the bank’s longstanding focus in these spaces.
Following the success of their pioneering pitch and pilot platform ‘FoodBytes!’, the fund was created after the bank began to recognise the need for active investment in Agri innovation to accelerate solutions, and support start-up efforts directly.
Backed solely by Rabobank, “the Fund really focuses on food security and making sure we tackle the challenges that the Food and Agri industry is now facing,” Vellinga explains.
This is accomplished through “supporting the start-ups with capital, but also with the wide network and the knowledge that Rabobank has, so to open that up for them and make sure we can help them grow.”
Current Portfolio
When asked about the portfolio developments she is particularly excited about, Vellinga notes two companies in particular; BeeHero and Vence.
“I think all of the companies in our portfolio are exciting, but they’re all very different,” she begins.
“The last investment I worked on was BeeHero… so that’s a really exciting one because you see different things come together. You have the impact side where you see the bee populations are in danger, which is a thing that people seem to care about from a nature and environmental perspective.
But, then again, it’s so important for our food security because what people don’t know is that almost 70% of the crops we eat are dependent on bee pollination… so it’s super important for the bees to be supported to help them get to successful pollination.”
However, at present enormous barriers exist to effective pollination in agriculture.
“There are major issues in that industry because the demand for bees is higher than the supply, which puts a lot of pressure on how the bees are treated but also on pricing for pollination,” Vellinga explains. “For the farmers it’s quite a challenge to get pollination, so for them it can be devastating because if they can’t get pollination, this immediately effects their crop yield. This is particularly true for instance for almonds.”
Harnessing pioneering hive sensors, algorithms and monitoring systems, BeeHero aims to alleviate these issues, building healthier hives, maximising pollination and improving crop yield.
“With our investment, and hopefully by connecting them to several of our big growers, for instance in almonds, we can really help the company in their mission to re-stabilise the bee population and help in successful pollination.”
The second example she gives is Vence – a virtual fencing and autonomous animal control system. Explaining the product’s role in sustainability, Vellinga explains it “helps in what we call rotational grazing.
So, normally you’d see physical fences around a plot of land, where the cows stay and keep on grazing which can be damaging for the soil when done in excess. By using rotational grazing, they can be moved around a plot of land which is then better for the soil composition and health.
There is also some research that supports the idea that it also helps in carbon sequestration, so again that’s an example where you see an overlap between impact, sustainability and food security.”
COVID-19 – deal flow and investment focus
Addressing the impact of COVID-19 on the daily operations of the Food & Agri Innovation Fund, Vellinga says: “It obviously has an impact on everyone, so it has had an impact on us.” However, it also represents an opportunity for start-ups to grow and improve, “specifically those a bit earlier on, who don’t have so much commercial success yet – they can really focus on their products and trying to build that.”
“For start-ups that are a bit further advanced, it’s more difficult because sometimes they are restricted in seeing clients, [and] shipping products.”
“So, really for us, the focus over the last few months has been supporting our current portfolio companies,” focusing particularly on liquidity cycles, and valuations in light of potential negative adjustments.
“In terms of new projects, we see a lot of deal flow still and I think that’s also because start-ups realise they don’t know how long this is going to take, or how the economic climate will develop so maybe we’ll just start early – which is a wise idea. We still have the capacity to support them.”
Although their focus remains firmly on food security and Agri innovation, looking to the future Vellinga says remote management technologies will likely experience accelerated growth as a result of COVID-19.
“We had invested already in some IoT companies and remote monitoring, but we’re now looking into robotics for instance, and I think that’s definitely going to take flight because of COVID.
Citing recent labour shortages in UK agriculture, and the potential for remote harvesting, Vellinga continues: “I think the technologies are quite far advanced and these market circumstances will definitely push those solutions.”
Advice for Entrepreneurs
Despite opportunities for improvement, the current climate remains tumultuous, creating uncertainty amongst the start-up community. Helping entrepreneurs navigate these challenging waters, Vellinga offers some advice for seeking investment.
The first point she emphasises is to seek investment in the early stages of development, taking advantage of the time afforded to many at present to do so.
Secondly, Vellinga stresses the importance of selective applications. “It’s always important to seek the right investors, and the right investor group – and I think now it’s even more important. Don’t send an automated email to 100 people, that’s not going to work. Especially now because for investors the deal flow may have even increased.
So, try and get a warm introduction from someone you know and do your homework – make sure they’re the right fit. For instance, we try and open up our networks to start-ups, so think ‘what’s the type of corporates we want to work with, and are they clients?”
Finally, advising women in ventures specifically, Vellinga explains that: “What we see is that a lot of female entrepreneurs struggle to get funding, and there are several reasons you can think of as to why that happens – of which one is that there are a lot of investors that have male employees or male partners, and I think there is wide evidence that we are biased towards people who resemble ourselves.”
“I think female entrepreneurs aren’t as good at saying to the world what they accomplished – we’re always sort of modest in a way. I think it’s really important to show the world what you can do and what you can offer.”