By Lynda Kiernan-Stone, Global AgInvesting Media
Nearly 70 percent of all farm machinery being used on Canada’s farms has been imported from other countries. And although the country is home to a range of innovators, the bulk of its agricultural products are shipped as raw materials.
A major factor inhibiting advancement within the Canadian agtech sector is the lack of capital funding, with Canada’s share of global agtech investment totaling only 3.4 percent of the total. To fill the void, last month Conexus Venture Capital (CVC) launched the Emmertech Venture Capital Fund (Emmertech), announcing a first close at $45 million. A second close at $60 million is expected to occur by the end of this year.
“With lack of capital funding, the entrepreneurs often leave their province to launch high-growth companies elsewhere, taking jobs, wealth and IP along with them,” stated Emmertech in a statement.
Of this initial funding, $15 million was committed by Innovation Saskatchewan – a government agency established in 2009 with the mission to provide advice and guidance to the provincial government in regard to R&D, science, and technology, and the commercialization of new technologies and the coordination of innovative activities.
Twenty-seven other investors joined Innovation Saskatchewan in backing the fund including Lex Capital Corp., Good Fellas Capital, Innovation Credit Union, Municipal Hail Insurance, UNI Financial Cooperation, and Libro Credit Union, among other individual and institutional backers.
“In building Emmertech, we felt there needed to be a different approach to agtech investing in Canada,” said Sean O’Connor, managing director, Conexus Venture Capital. “As a starting point, we’ve built the fund from the ground up, engaging critical stakeholders across the entire agriculture supply chain as investors in the fund to actively work with our team and portfolio founders. This gives us the advantage of understanding the challenges and needs of the industry [in order to] provide the support they need to help take their startup to the next level as quickly as possible.”
Steve Bolton, CEO and president of Libro Credit Union, added, “We’re breaking the old-fashioned stereotypes about anyone who works in the agricultural sector.”
“Ag has always innovated to improve profitability, animal welfare and introduce more sustainable practices as a few examples,” continued Bolton. “This generation is expected to be better prepared and willing to harness new technology on their farms. We’re supporting a shift in Canadian agtech to a younger, more tech-savvy farmer. This is going to fundamentally change how farming operations are conducted.”
Along with its new venture fund, CVC has also announced the addition of Kyle Scott in the role of managing director. Scott led the ag investment strategy as vice president with Clairvest Group, and had been an engagement manager with McKinsey & Company, working in private equity due diligence, strategy, and operations for North America and overseas.
Along with O’Connor, Scott will co-lead both of CVC’s fund: CDC Fund #1, an existing generalist fund, and the agtech-focused Emmertech.
Scott told GAI News that Emmertech will invest along the entire value chain, from “farm to fork”, but will have a focus on the intersection of technology and the farm, or ‘on farm’ technologies, adding that the fund will typically make bigger investments than typically seen in the Canadian agtech ecosystem, investing between $1-$5 million, with an optimum initial investment being about $3 million.
Scott noted that since farmers are essentially “betting the farm” every year, and their working life spans only approximately 30-40 growing seasons, products and/or services must produce immediate ROI. He added, “For Agtech companies to accomplish this they must have more than MVP betas to test with farmers (unlike consumer marketplace companies that have thousands of transactions and can release updates on a regular/occurring basis) – the product needs to work and show ROI immediately, and they require adequate and knowledgeable capital to help achieve that.”
Over the next ten-year period Emmertech will be building out a portfolio representing a diversified collection of Canada’s agtech startups, with $15 million of its capital earmarked for startups based in Saskatchewan.
The fund’s investments also will be allocated to companies participating in CVC’s recently launched Agtech Accelerator. Beginning with one cohort every fall, the AgTech Accelerator gives participating startups spanning a range of verticals in the agtech and food tech spaces – including robotics, animal health, precision ag, predictive analytics, and supply chains – the mentorship, resources, and programming support they need to succeed.
Along with its new venture fund, CVC also has announced the addition of Kyle Scott in the role of managing director. Scott led the ag investment strategy as vice president with Clairvest Group, and had been an engagement manager with McKinsey & Company, working in private equity due diligence, strategy, and operations for North America and overseas.
Along with O-Connor, Scott will co-lead both of CVC’s fund – CDC Fund #1, and Emmertech.
“It’s exciting to continue building on the great work Sean and the team have put into date – it’s been an obvious catalyst in the Saskatchewan and Canadian tech ecosystems that’s only just beginning,” said Scott. “We have a generational opportunity for Canada to be a leader in global ag innovation but lack structured and knowledgeable capital that allows our entrepreneurs to thrive – we know Emmertech will play a big role in solving that problem and capturing value here in Canada.”
O’Connor added, “The next leap in agriculture will require advanced digital tools to enhance productivity and efficiency while being mindful of ever-growing environmental and social considerations.”
“Emmertech will empower entrepreneurs to lead this evolution, harness data and connectivity, and emerge technologies to positively transform agriculture, and the environment, for decades to come.”
– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@