February 26, 2019

Global alternative investment manager Artesian has partnered with the Grains Research and Development Corporation (GRDC) to launch GrainInnovate, a $50 million venture capital fund focusing on innovative solutions for Australia’s grain producers.

“Artesian Venture Partners has raised $50 million to establish the fund, including a $25 million cornerstone investment from GRDC, the largest single investor in grains research in the country, and $25 million from Artesian,” said Jeremy Colless, managing partner, Artesian.

“This initiative is unique in that it’s focused entirely on the Australian grains industry,” said John Woods, chairman, GRDC. “It also represents one of the largest institutional capital pools in Australia. It will act as a beacon to attract world-class agri technologies to boost innovation and modernisation across the grains industry.”

Managed by Artesian, the fund will make investments from seed to growth stage in scalable startups found both domestically in Australia and overseas. However, each startup considered must be active in developing technologies or business models that benefit Australia’s grain growers. Under its mandate, categories of interest will include sensor technologies, crop storage logistics, renewable technologies, task automation, crop protection technologies, crop management logistics, water and nutrient use efficiency, and genetic tools and technologies.

“Whether you’re a grower, breeder, research scientist, agronomist or ag tech developer – if you’ve got an innovation that can improve production or address a grains industry constraint– we want to hear from you so we can capitalise [sic] on those opportunities and maximise[sic] the productiveness of our systems,” said Woods.

Seed stage investments will range from $25,000 to $100,000; angel stage investments will be between $100,000 to $500,000; Series A investments will range from $500,000 to $5 million; and at growth stage, Artesian will work with the GRDC and its partners to facilitate further capital commitments.

Through capital funding, the GRDC and Artesian aim to bring disruption to Australia’s grain production systems and its research and development initiatives.

“While GRDC has a strong and diverse investment portfolio, this initiative will give grain growers access to cutting edge ideas and technologies whether developed in a shed in the back paddock in Parkes, or discovery in a Germany based international life science company, or an agri-tech company in the Silicon valley,” said Woods.

Full Court Press

The launch of GrainInnovate comes nearly concurrently with the announced launch of Australia for Agriculture 4.0 – a new a new initiative backed by Austrade, Australia’s national promotional agency for trade and investment, with the goal of transforming overseas interest in agtech and food tech into capital investment in the country’s startups.

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 noted that an existing lack of capital 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.

As such, Australia’s government and its private players are responding in a full court press to fund and harness the potential of ag technologies being developed worldwide.

“Australia has the potential to be a powerhouse in agrifood tech and we want to help the sector reach its full potential,” said Simon Birmingham, Minister for Trade, Tourism and Investment.“Our farmers are some of the most innovative in the world but we’re behind the pack when it comes to commercialising [sic] our food and farming technologies.”

For Artesian, this is not the only investment vehicle it’s managing with the goal of transforming Australian ag. The firm is also the manager of the SproutX Venture Capital Fund, launched in 2017. A portion of the capital committed to the fund came from Artesian, which itself secured an investment of $85 million from superannuation fund, Hostplus earlier that year.

-Lynda Kiernan