Venture Capital in Western Canadian Agriculture

Venture capital deals in Canadian agribusiness totalled $182 million in 2021, while $1.3 billion in private equity funding flowed into the agriculture and forestry sector. A substantial number of these transactions were in Western Canada. Of the total $14.7 billion in venture capital deals (in all sectors) in 2021, $3.7 billion was completed in Western Canada, representing 25% of the total.

Last year saw a continued growth trend in agricultural venture capital with a number of significant initiatives. In August, Saskatchewan-based Conexus Venture Capital Inc. announced the launch of Emmertech, a $60-million venture capital fund focused on Canadian agtech and agribusiness innovation. Along with an anchor investment from Innovation Saskatchewan, Emmertech received investments from a number of credit unions, as well as international ag companies Mosaic and Viterra. In 2021, Emmertech closed two investments in Lucent BioSciences in British Columbia and Ukko Agro in Ontario. MLT Aikins acted as counsel to Conexus Venture Capital Inc. in establishing Emmertech and on a number of Emmertech’s investment transactions. Other funds and institutions have continued their growth in the sector, including Ag Capital Canada, Telus Ventures, SVG Ventures, Business Development Bank of Canada and Rio Investment Partners, among others.

Federal and Provincial Financial Supports for Agriculture and Food

Federally funded supercluster initiatives such as Protein Industries Canada, headquartered in Saskatchewan, also continue to represent a bright spot in potential deal flow for agricultural companies. Protein Industries Canada recently announced that with one year left in its initial tranche of $153 million in funding from the federal government, it has leveraged almost $300 million in additional industry investment. Provincial governments are also providing support, including significant investments such as Alberta’s Accelerate Fund, Saskatchewan’s Advantage Innovation Fund and Agtech Growth Fund, and Manitoba’s Innovation Growth Program. Further, the provinces offer innovation tax credits and incentives for start-up and growth companies, including
Manitoba and British Columbia’s Small Business Venture Capital Tax Credits, among others.

Investment in Ag & Food Will Bring Opportunities for Growing Companies

According to the most recent data from Statistics Canada, Canada’s agriculture and agri-food industry was responsible for $139.3 billion in economic activity in 2020. This represented 7.4% of Canada’s gross domestic product and accounted for one in nine jobs. In 2020, farm cash receipts were approximately $70 billion, with Western Canada contributing 59% of the total.

With a global population that some estimate will grow to 10 billion people by 2050, the opportunities for agriculture and agri-food in Canada are significant, including for companies looking for
venture capital to expand their footprint. A number of positive initiatives brought online in 2021 suggest that the outlook for 2022 will be similarly robust.

This article is part of the Agriculture and Food 2021 Year in Review which provides an overview of the key issues and trends that shaped the agriculture and food industry in 2021. Download the FREE e-book.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.