A red-hot year for VC investment in agtech

Despite a year of economic uncertainty and aggressive rate hikes that wreaked havoc on financial markets, venture capital (VC) investment in Canadian agribusiness thrived in 2022.

Only halfway through the year, VC investment in agribusiness was already 33% higher than all of 2020 and on pace to surpass the records set in 2021, both in terms of deal volume and deal value, according to data from the Canadian Venture Capital and Private Equity Association.

Emmertech announces investments

Regina-based Conexus Venture Capital Inc. was very active in 2022, contributing to 13 rounds of funding in the first half of the year. In 2021, Conexus launched the $60-million Emmertech fund, which focuses exclusively on opportunities in Canadian agtech and agribusiness innovation.

Over the past year, the Emmertech continued deploying capital, announcing investments in several Canadian companies at the leading edge of agtech innovation, including:

  • Leading a $34-million Series C funding round for Ontario-based Vive Crop Protection, which develops products aimed at enhancing the efficiency and sustainability of crops
  • Leading a $3.1-million seed financing round for Vancouver-based BarrelWise Technologies Ltd., which develops data systems to improve efficiencies in winemaking
  • Leading a $1.7-million seed financing round for Ontario-based IntelliCulture, which develops technology for monitoring and optimizing farming equipment and crop yields

Tall Grass Ventures launches

September saw the launch of Calgary-based Tall Grass Ventures, Canada’s newest agtech VC fund focusing on pre-Series A financing for startups focused on globally applicable agtech innovation.

Tall Grass is leaning in with its experience in agriculture, tech and finance to invest both experience and capital. Having built companies, brought innovation to market and been in ag for most of their careers, the Tall Grass team understand founders’ struggles with building market defining companies.

“As past founders, investors and builders ourselves, we know firsthand some of the challenges that exist building an early stage agtech company, especially in Western Canada,” Wilson Acton, managing partner of Tall Grass Ventures, said in a statement. “Bringing experience and capital to agtech startups is exactly where Tall Grass is focused.”

Tall Grass plans to help the next generation of Western Canadian agtech companies scale quickly as the industry transforms through its growing adoption of data, connectivity and sustainability.

Growing support for VC investment

The federal government gave a boost to VC investors in October when it invested $350 million in four VC fund-of-funds managers through the Venture Capital Catalyst Initiative.

“We are committed to helping innovative businesses and entrepreneurs get the investments they need to scale up, access new markets and succeed,” said Mary Ng, the minister of international trade, export promotion, small business and economic development.

Manitoba also has its sights set on encouraging investment in early-stage companies. In April, the province announced a plan to allocate $50 million to privately managed VC funds and enhanced its Small Business Venture Capital Tax Credit for VC investors.

As climate change, global supply chain disruptions and a growing population continue to put pressure on the agriculture industry, we expect innovative agtech companies throughout Western Canada to become increasingly attractive to VC investors everywhere.

Lawyers from MLT Aikins were pleased to act as counsel to Conexus on the formation of Emmertech and advise on the fund’s investments. MLT Aikins also advised Tall Grass Ventures on its formation. If you’re looking for investment opportunities in Western Canadian agtech, the lawyers in our Private Equity and Venture Capital group would be happy to assist you.

This article appears in our 2022 Agriculture & Food Year in Review. Download the free ebook.

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