April 26, 2016

By Lynda Kiernan

In what is thought to be a first of its kind partnership, agtech and life sciences venture capital firm Finistere Ventures and institutional farmland owner and manager International Farming Corporation (IFC) have launched agtech equity growth fund Willow Hill Ventures. Finistere partner, Arama Kukutai sat down with GAI News at Global AgInvesting 2016 to discuss Willow Hill Ventures and what sets it apart.

Willow Hill Ventures is a growth equity-focused vehicle that will capitalize on the diverse tools brought by Finistere and IFC. By nature of IFC’s involvement, the fund is connected with a widespread base of several million acres of farmland owned or influenced by IFC across 20 U.S. states.  These will help serve as an on-farm innovation ecosystem to be used by the fund’s portfolio companies. Through the fund’s integrated on-farm testing and development capabilities, combined with access to the expertise offered by IFC’s agronomy, technical, and operational teams, companies that Willow Hill invests in will build market traction, with their technologies reaching scale with already-established validation, certification, and recommendation which in turn will increase farmer adoption.

“Today’s farmers are bombarded with a dizzying array of technology solutions while trying to navigate evolving consumer food trends and the pressures of a consolidating farm sector,” noted Charlie McNairy, CEO of IFC. “Our farm labs discover and test the latest disruptive technologies so we can rapidly vet and validate the technologies ready for scale while reducing investment risk — both for the investor and the farmer.”

Finistere brings a long history of venture capital in the agtech space and experience identifying scalable technology. This will come in handy as Willow Hill Ventures will focus on companies at Series C rounds or later, where in recent history funding has fallen short.

“We think based on the pipeline that we’re seeing from early stage, and what the typical company needs, we think there’s a several billion dollar funding gap,” Arama Kukutai told GAI News.

The scale of the fund, which will be managed by Finistere, remains undetermined at this time, but both Finistere and IFC will be actively fundraising, and both will work together to select the companies in which to invest.

When asked if there were specific technologies being targeted for investment, Mr. Kukutai told GAI News that a broad range of technologies are being examined across the agtech class, but key factors that each portfolio company must present including:

• The ability to solve large problems facing the agricultural industry in a compelling way.
• The ability to provide real value per acre and high margins.
• The ability to rapidly scale, whether biologically or within IT.
• Delivery of a high utility and functionality factor; being easy for farmers to integrate into both their current and future operations.

Listen to Mr. Kukutai expand upon the importance of functionality here.

The fund will be aiming for returns that are on par with private equity returns, and is targeting exit timelines within the three to five year range.

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