November 18, 2019

By Lynda Kiernan

Australia’s federal Clean Energy Finance Corporation (CEFC) is partnering with Grok Ventures, the investment fund of Atlassian software company founder Mike Cannon-Brookes and his wife Annie, to back Tenacious Ventures, a newly launched $30 million venture capital agri-food tech fund.

The cornerstone investment will consist of an $8 million investment from each of the partners, (via Cannon-Brookes’ Grok Ventures, and the CEFC’s Clean Energy Innovation Fund) bringing Tenacious to little more than half-way to its funding goal of $30 million. 

“The agricultural sector poses a demanding climate change challenge: how to produce more food, more efficiently, for a growing population amid a more extreme climate, while also reducing greenhouse gas intensity and emissions,” said Ian Learmonth, CEO, CEFC.

Co-founded by Sarah Nolet, CEO of agrifood tech advisor AgThentic, and Matthew Pryor, one of the pioneers of precision ag water startup Observant, Tenacious’ mandate is to support emerging Australian agrifood tech innovations designed to help agricultural producers lower emissions, and the sector to become more climate resilient. 

And even though over the past three years, investments in the agrifood tech sector have totaled US$16 billion, Tenacious Ventures notes that it is Australia’s first venture capital fund dedicated to the space. (In February of this year Artesian partnered with the Grains Research and Development Corporation to launch the $50 million VC fund GrainInnovate, however, its investment mandate is siloed to Australia’s grain sector). 

As such, Tenacious is aiming to invest in 20 early-stage startups along the agricultural supply chain developing technologies to raise efficiency and reduce waste within food production systems, which today accounts for up to 30 percent of the world’s greenhouse gas emissions. 

Although Australian innovators have been developing solutions for a variety of challenges facing the country’s growers – including drought, animal management, and disease and pest control – the Australian government has noted that there exists a lack of capital, which is hobbling the advancement of these developments. As recently as 2017, 80 percent of all agtech investments made in Australia were less than $1 million, according to Australian Financial Review, and of these investments, most were in the form of government grants or through accelerators.

The CEFC has been an active investor and co-investor providing on-farm investments to integrate renewable energy, reduce emissions, and to improve efficiency. Its Clean Energy Innovation Fund has access to an investable $200 million for early-stage businesses beyond the R&D stage needing growth capital to advance their technologies.

“Innovation in agriculture is desperately needed across the world to make our planet more sustainable,” said Cannon-Brookes. “It’s fantastic to see the CEFC investing in agrifood tech through this commitment to Tenacious Ventures. Kick-starting this industry in Australia will take guts and expertise, and the CEFC brings both.”

Knowing the potential that Australia has to effect change and raise sustainability in agriculture, but for a lack of capital, in February of this year, (the same month that GrainInnovate launched), Austrade, Australia’s national promotion agency for trade and investment, launched Australia for Agriculture 4.0 – an initiative with the goal of transforming overseas interest in agtech and food tech into capital investment in the country’s startups.

This initiative aims to establish Australia as a global hub for both agricultural and food tech innovation, acting as a platform to place focus on the country’s ag and food tech capabilities, its excellence in research, its strong record of innovation, its strong government support, its robust export channels, and its technological advances.

“Australian agriculture is a major exporter of food and fibre, feeding more than 60 million people per year,” said Pryor. “We are experts at efficient, climate adaptive food production – Australian farmers reduced greenhouse gas emissions intensity of agriculture by 63 per cent between 1996 and 2016. But more needs to be done to develop and export agricultural technology that improves the efficiency of production on a global scale.”

“There’s no doubt that new ideas in agriculture will play a massive role in reducing carbon emissions, while also delivering return on investment,” said Cannon-Brookes. “The economic upside for Australia’s economy is also huge.”

“Sarah and Matt have a solid track record of finding those new ideas, and then making them work. I can’t wait to see the innovation in food tech and agriculture that they deliver.”

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.