AgFunder has reviewed more than 2,500 food and agriculture company applications to join their investment marketplace. The platform has helped companies raise money for technologies with the potential to transform the food and agriculture industries. This summer, AgFunder will be launching a new investment vehicle for food and agriculture technology startups worldwide, letting investors invest alongside. The company will focus on agrifoodtech investments ranging from Seed to Series B.
Named an up-and-comer by Forbes Magazine, Co-Founder Rob Leclerc, PhD, has been a scientist and engineer for more than 15 years with more than 4 years of global agriculture experience. In 2014, he co-founded AgFunder, which allows accredited and institutional investors to communicate with emerging companies needing capital investment.
In April 2017, AgFunder‘s member network reached 30,000. Food Tank spoke with Leclerc about AgFunder’s beginnings, its goals for the future, and some recommendations for policymakers he believes will improve the food system.
Food Tank (FT): Why did you want to start an agricultural marketplace for startups looking for investment capital from investors?
Rob Leclerc, PhD (RL): Our overall mission at AgFunder is to increase investment in the food and agriculture industry. Not only has agriculture been left behind technologically, but it has failed to attract needed capital from the investment community. Agriculture represents 10 percent of global GDP and yet only receives around 3 percent of venture capital funding. I saw this first hand when in 2010 I started working at a company called SeedRock working under my now co-founder Michael Dean. Over several years, we saw how the lack of a robust ecosystem was inhibiting capital formation in the food and ag market. We felt that this was a solvable problem if we leveraged the community-building powers of an online marketplace.
FT: Who has been helpful in making this idea a reality?
RL: Michael and I couldn’t have done this without our amazing and dedicated team. Louisa, our Chief Editor, has been an all-star and Robin, our Lead Engineer, has been working tirelessly to transform AgFunder into a fintech company. Also, we have to give credit to our early investors who shared in what seemed to be at the time a crazy idea. Other early supporters were Danielle Gould who wrote the first Forbes piece on us in 2013, and Rohit Shukla at Ag Innovation Showcase who graciously welcomed us into the community in our coming out party.
FT: How does AgFunder plan on expanding its role in agriculture innovation in 2017 and beyond?
RL: This year we are launching a new investment vehicle that will be investing in the companies we list on the AgFunder platform. This addition will allow us to be more active co-investors in deals and to leverage our 30k-strong global community into shareholders, customers or partners for our portfolio companies.
In the future, we want to transform food and agriculture into a mainstream investment asset class, and in doing so, both directly and indirectly, we want to close the US$2 trillion investment deficit we see facing the sector over the next decade. To do this, we will be looking to build an AgFunder franchise for other expert investors to utilize our global network and launch funds with; that could be AgFunder Canada, AgFunder Emerging Markets, AgFunder CPG, AgFunder Growth Fund. Ultimately, we want to own the mental real estate for investing in food and agriculture so that when someone says, “I’d like to diversify three to five percent of my portfolio in food and agriculture,” we have a destination for them.
FT: Agriculture is a massive subject that impacts health, the environment, the economy. What are some important areas investors and companies should be focusing on today?
RL: Agriculture is one of the biggest consumers of water, and its environmental impact is enormous. Moreover, the food we eat greatly affects our health. We need technologies that help solve these problems. From better stewardship of our water resources to technologies that reduce agrochemical usage and the industry’s carbon footprint, to a more holistic understanding of how food affects health. We believe much of this can be achieved through innovation, so companies and investors should be looking at ways to support and engage with that change.
FT: Do you have any advice for an agricultural startup that is looking for funding?
RL: If you read the headlines, it makes it look like everything comes easy. The truth of the matter is that many of these ‘overnight successes’ have been working hard at this for several years. My advice is to be resilient, find your first champion, and then find more of the same. As a stepping stone, I think accelerators can be a great source of early stage, bridge, and angel capital but ultimately you’re going to be judged by venture capitalists who may have seen 10 companies just like yours. You need to be differentiated and a good story teller. Finally, make sure you have a team packed with A-players.
FT: What can policymakers do to have the greatest impact on increasing agriculture investment, both locally and globally?
RL: Regulations tend to create barriers to entry for small companies, giving large corporations a monopoly. Policymakers may need to relax some of the constraints around small enterprises so that it does not suffocate innovation. Policymakers can also get involved by creating more open source data projects that can serve as a foundation for agtech companies to build their products on. Finally, we could see a tax-credit for spending on agtech solutions or other incentives to help increases rates of technology adoption on the farm and in the supply chain. Ultimately, I am skeptical about direct government intervention in investing because it has the potential to crowd out the private sector.