THE COMPANY WE KEEP: OUR INVESTMENT ECOSYSTEM
By: Yvon Brousseau, MBA Fellow, Supply Change Capital | 9/7/2021
September 7, 2021
At Supply Change Capital, we’re building a platform to advance multiculturalism in the food and supply chain ecosystem. We invest, we mentor, we curate, we advocate -- we do all of this in community with stakeholders and friends. In this reflection, Supply Change Capital’s MBA Fellow Yvon Brousseau explores the food and food tech investor landscape.
Funding and innovation in the Agrifoodtech sector is exploding
Investments in the food & agricultural technology space, or ‘Agrifoodtech,’ has grown immensely over the last decade. From 2011 to 2020, global Venture Capital (VC) activity in the Agrifoodtech space increased from fewer than 75 deals worth less than $500M in deal value to more than 1,000 deals worth more than $22B in deal value. With this large increase funding there has been a subsequent growth in the number of VC firms focused on Agrifoodtech (link). As of August 2020, there are over 3,700 VC firms who invest in the foodtech or agtech space according to Pitchbook, with nearly 2,000 of those in the United States alone (compare that to less than 2,000 globally at the start of 2015).
Launched in 2020 with dual HQs in Chicago, IL and Los Angeles, CA, Supply Change Capital (SCC) is one of these firms.
Supply Change Capital approaches investments with a unique lens
As SCC celebrates its first birthday this fall, we have spent time reflecting on the countless hours spent fundraising, meeting with entrepreneurs, and networking throughout the VC, food/foodtech, and supply chain communities. While there was a wide range of feedback we received and lessons we learned, two big questions continuously emerge:
What does the current VC investor ecosystem around food/food tech/diversity look like?
How is Supply Change Capital unique?
Being in good company means everything in VC, for both founders and funders. When SCC entered the ecosystem, we were excited to build community so that we could be better investors and better stewards of capital. Beyond Pitchbook and Crunchbase, which haven’t quite caught up with the emerging manager space, we triangulated data from additional sources like Airtable, AgFunder, and more. Nevertheless, there was no one resource that aligned with SCC’s thesis and investment areas nor directly answered those pesky diligence questions. So we got to work and spent some time this summer compiling a more complete investor ecosystem as it relates to our work.
The investor ecosystem analysis includes VC investors, and a handful of angel groups, CVCs, and private equity investors, whose investment theses directly overlap with at least one of the 3 main pillars of SCC’s thesis:
Food/Beverage Brands
Agrifoodtech
A Culture, or Diversity, Lens
Some general notes and caveats:
This list is in no way exhaustive. We are almost certain we missed investment firms that align well with our thesis. And we could not fit all the firms that do into one graphic. This is meant to be an initial snapshot, not a full analysis
Generalist VC firms that invest in these areas -- but do not explicitly note one of the three pillars in their thesis -- are not included
Accelerators and incubators are not included
Supply Change Capital’s Differentiating Factors
SCC was founded on the thesis that there was a gap for early-stage investments in food, food tech, and along the agrifood supply chain, with a lens for multicultural America. With a busy ecosystem of investors, as shown above, SCC adds unique value to the space because we:
Focus exclusively on early-stage companies (i.e., pre-seed, seed, and Series A)
Ensure that our portfolio companies have an impact orientation along the dimensions of diversity, sustainability and health
Commit to promoting diversity in both our deal flow and investments; 75%+ of the founders of deals we have evaluated to date are from an under-represented background
Are region agnostic within the US/North America, open to entrepreneurs from east to west and north to south. We believe that regionality in Chicago and LA supercharges our portfolio by providing proximity to food/ag hubs
Prioritize founder support by committing 1% of our fund for portfolio leadership coaching, D&I, and mental health support
Invest in the future of food and agriculture, from food and ag tech to supply chain innovations, and multicultural brands
Are led by female GPs in an industry where as of October 2020 only 2.4% of founding partners were women (link); those same GPs have 3+ decades of operating experience in manufacturing, tech, and supply chain, and founding venture firm experience
Are able to lead funding rounds
Investor Ecosystem Insights
Not surprisingly, the research uncovered some cool findings about the broader investor ecosystem in which SCC operates:
Within our Agrifoodtech investor ecosystem, 8 of the VCs cited are focused solely on backing alternative proteins or the removal of animals from the world's food and agriculture supply chain (e.g., Blue Horizon, CPT Capital, Alwyn Capital, Lever VC, Veg Capital, etc.)
There is no shortage of investors with theses that align with one of SCC’s main pillars
There is significant activity and overlap between the Food/Beverage Brand space and the Agrifoodtech space. Based on our initial research and comparison graphic, there are more than 20 more firms that we could simply not fit into that section of the Venn Diagram (firms such as Oyster Bay, VegIvest, Outbound Ventures, 301 Inc, Five Season Ventures and more)
The line between investing in Agrifoodtech and Food/Beverage Brands is starting to blur as companies within the Agrifoodtech space become brands in and of themselves rather than just technology (e.g., Beyond Meat, Gotham Greens, Imperfect Foods, Nature’s Fynd, etc.)
Focus on Culture/Diversity combined with a focus on brands or Agrifoodtech was low as the large majority of the investors focused on investing in diverse or female founders were more than often generalist investors
The large majority of investors that exist in SCC’s investor ecosystem are focused on investing in early or growth stage companies. Very few of the investors are focused on the late-stage (e.g., Sherbrooke Capital, Sonoma, Brands, Cultivian Sandbox Ventures, Big Idea Ventures, etc.)
Growth-stage focused investors are heavily concentrated in the Food/Beverage Brand area (e.g., Loft Growth Partners, PowerPlant Ventures, Nextworld Evergreen, etc.)
Resources
We have published an Airtable so that the founders, GPs, and LPs in our community can access what we learned. Here is a link to an Airtable database with the investors cited in the above graphic filled with important information such as focus areas, location, preferred investment amount, target funding rounds, and more. We trust this resource will be helpful to both founders and funders interested in building a more resilient food system. Feel free to give it a spin!
Note that the information above is largely gathered from Pitchbook, Crunchbase, and investor websites. It is not intended to be treated as the ultimate source of truth, but rather a general snapshot and jumping off point for information about these investors.
Footnote(s)
We’ll continue to update this list (add new players and ones that we missed, and remove those who deprioritize food technology or diversity) as the ecosystem continues to evolve. If you would like to submit any venture funds for consideration or you would like to correct any information about a firm you see, we encourage you to do so through this form.