Although not as flush as the first quarter last year, the Canadian venture capital industry is still looking strong. Based on final Q1 2017 CVCA data (Q2 2017 final data scheduled to be released on August 23rd), $905M was disbursed over 98 deals in the first quarter. This compares to $956M over 128 deals from the same quarter in 2016 and $419M over 133 in Q1 2015.
The agribusiness sector is a relatively small piece of the Canadian VC pie with only $42M invested over 7 deals this quarter. BUT, the spike in investment is worth noting as compared to pre-2016. As the world continues to look for more efficient ways to feed its growing population in ways that reduce environmental impact, it’s an area that naturally aligned with VCs looking to solve big problems. In other words, there is anticipation the agribusiness share size within the VC pie will grow.
The largest agribusiness deal in Q1 was to Inocucor, a Montreal-based ag biotech company that develops sustainable soil, seed and plant accelerators for agriculture. It raised $38.8M in a series B round from a syndicate which included Capital régional et coopératif Desjardins and Cycle Capital Management.
Andrée-Lise Méthot, Founder and Managing Partner, Cycle Capital Management agrees there is momentum in the agribusiness sector.
“With products on the market, being used by an increasing number of growers who are experiencing positive results, the initial promise we saw in the early days of Inocucor is now coming to fruition. It’s the same with agtech deals,” explained Méthot. “With the emergence of new ag-focused investors and the need to increase crop yields with new technologies while the demand for food continues to grow, agtech is emerging as a key sector. And the numbers prove it: according to Cleantech Group, investment in agtech companies grew sharply this year – agtech startups raised almost $300M in Q1 2017, a more than 1.5X increase over the same period last year. So overall, we’re still in the growing season, but the future is promising.”
Luc Ménard, Chief Operating Officer, Desjardins Business, Capital régional et coopératif, spells out what made Inocucor attractive.
“With this investment, Desjardins once again demonstrates its ability to accompany promising companies to bring them to a new level in their growth,” Ménard maintained. “The quality of the product as well as the the deep expertise and rigor of the management team and that of the other partners have motivated us to join this company.”