By Gerelyn Terzo, Global AgInvesting Media
Nordic Foodtech VC, a Helsinki, Finland-domiciled venture capital fund dedicated to tangible solutions for the ag and food industry, has successfully launched its second fund. The firm secured €40 million (US$45.5 million) in its initial close and aims to double that amount for its final close, targeting companies that are building a sustainable food system, one that it says “fits within planetary guidelines.” The round attracted a roster of institutional investors, including Tesi, Elo, Valio Pension Fund, and Heino Group Oy, among others.
Nordic Foodtech VC’s fundraising milestone comes amidst a particularly difficult venture funding climate. The agtech sector has faced a significant “capital drought” in recent years, with venture capital funding plummeting 60 percent since late 2021, according to McKinsey & Company. This sharp decline was fueled by broader market uncertainties and a diminished appetite for risk among investors. While the investment climate is now showing signs of leveling out, the fallout for agtech startups has been severe.
McKinsey estimates a staggering $6 billion invested across 30 significant agtech companies was erased in 2023 due to business turnarounds or distress. Alarmingly, its analysis of roughly 350 well-funded startups reveals that at least 30 percent are currently missing their fundraising targets, collectively needing a substantial $10 billion-$15 billion in fresh capital to survive.
Nordic Foodtech VC Partner Louise Heiberg was cited by EU-Startups as stating, “Being able to raise funds in the current complex market is not an easy feat. However, it’s clear to us and our investors that the current global food system is largely inefficient and not adequate to meet the needs of the planet or its people.”
The VC fund’s strategy involves backing startups that translate breakthrough science and solutions into real-world food system impact and solid returns. This focus spans segments driven by the growing demand for food security, health and nutrition, and sustainable food systems.
In addition to this newly launched Fund II, Nordic Foodtech also manages a separate €42 million (US$47.8 million) fund that has already supported nearly two dozen startups across the Nordics and Baltics. They also oversee NFT.VC Fund II, which launched last year and aligns with the EU Sustainable Finance Disclosure Regulation. This latter investment vehicle, a closed-end fund with a 10-year term and a target size of €80 million, invests in companies that significantly reduce food system emissions across the atmosphere, soil, and water.
Of the latest fund launch, Nordic Foodtech VC Partner Mika Kukkurainen stated, “The fundamental need for solutions in the food system hasn’t changed. We invest in companies solving real industry problems, often straight out of the lab where early-stage capital is still hard to find.”
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