Acre Venture Partners (Acre VP), the agri-foodtech investment firm, has reached a first close on its second fund, a multi-LP fund targeting around $125 million, the same size it reached for Fund I. The firm was founded in 2016 when it launched Fund I, a single LP fund backed by Campbell’s Soup.
Fund II investors include The Grantham Foundation for the Protection of the Environment and Bill Helman, a partner at established VC firm Greylock, who has also joined Acre VP as a partner.
The firm has already made two investments from the new fund: Agrofy, the Argentinian agribusiness marketplace that made waves a couple of weeks ago with its record-breaking Series B round and signifies Acre’s first investment outside of the US. The second is Inari, the gene-editing for ag startup, in its Series B round. Helman is already a board member at Inari since last year.
“Bill is an absolute legend in the venture field,” says Sam Kass, a partner at Acre VP and previous nutrition adviser to the Obama Administration and Michelle Obama. “I’ve never met anyone half as smart as he is when it comes to how to look at companies; every time he gets us to the right questions and we’re learning so much from him already.”
Helman is joining as an equal partner and has a history with Lucas Mann, the co-founding partner of Acre; Greylock invested in Mann’s previous business and Helman was on the board. “He’s been mentor to me for the last 15 years,” Mann tells AFN. Helman’s son William also works at Acre.
The core mission for Fund II, and where the firm is aligned with its investors, is to invest “with purpose and a focus on human and environmental health,” Mann told AFN. That was a major draw for Helman, who has typically invested in other sectors including the motor industry where he led Greylock’s investment in ZipCar. He is also a board member of Ford Motor Company.
“Food and agriculture has had my attention for a long time, in part driven by my children’s interest in the field, but it’s also just hard to ignore the implication of the industry on our world and society today,” Helman tells AFN. “Certainly being at Ford, we’ve worked hard at our sustainability profile and that alerts one to the impact of the food and ag industry; in today’s day and age, it can’t be ignored.”
Helman also has a background investing in bio-therapeutics making Inari a good fit; Mann told Helman about Inari last year and he invested in the company personally before joining Acre VP.
As widely reported, Campbell’s Soup has been divesting non-core assets for over a year now including selling off its international businesses, most recently selling Arnott’s, the manufacturer of crackers and cookies, including well-known Tim Tams, to private equity firm KKR. It is understood Campbell’s will also be selling its stake in Acre VP Fund I but has as yet not made any moves to do so. Campbell’s has not yet responded to requests for comment.
Investments in Fund I include Farmers Business Network, the disruptive online marketplace or farmers to buy inputs and sell grain, Spoiler Alert, a trading platform to reduce food waste, Evolve Biosystems, a gut microbiome company, and ImpactVision, a hyperspectral imaging tech for the supply chain (disclosure: AgFunder is also invested in ImpactVision). The first fund also invested in two companies that did not make it, including a small stake in Juicero, the at-home smoothie machine and delivery company that Bloomberg famously outed for its unnecessary pouch squeezing device. It is understood Campbell’s had a much larger direct investment in Juicero. Acre also invested in Pilotworks, the kitchen space provider for food startups, alongside high-profile investors like the founders of Sweetgreen and Blue Hill co-owner David Barber. Pilotworks closed in 2018 after failing to raise additional funding.
Mann and Kass wouldn’t comment about these two companies specifically but alongside Helman alluded more generally to the lessons learned from the first fund and the strong position in which that places the firm for Fund II, particularly under the guidance of Helman.
“His list of accolades is extraordinary and certainly great for us at Acre but equally someone with his experience coming into our ecosystem to focus specifically on food and ag feels really good for the whole industry,” says Mann. “The combination of our domain expertise and his investment acumen and experience is very powerful.”
While the caliber and experience of investors coming into the space continues to grow, with the likes of Helman and Telsa cofounder Marc Tarpenning as two great examples — I might also mention AgFunder’s own venture partner Tom Shields, a successful ad-tech entrepreneur turned investor — the firm is also noticing that deal flow is improving in quality.
“While the entire space is still in its infancy, month-to-month the deal flow we’re seeing gets better and better in quality. And this is just the beginning; the pace of change and innovation is going to dramatically increase over the next 10 years, which makes us some excited to have this team in place right now with the right LPs,” says Kass. “We’re seeing proof points in the marketplace about how much money can be made here while at the same time transforming how we’re producing our food when it comes to the climate. People are starting to really awaken to how serious the situation is, while at the same time we firmly believe that the companies that know how to solve some of these challenges and meet consumer and farmer needs, will drastically outperform those that don’t, and this feels truer today than it ever has.”
Acre will invest across the supply chain taking a “systemic approach” but likely stop at CPG companies.
Mann signals a particular interest in biotech and ensuring it plays a positive role in the future food system, building on the experience of its role in human therapies. Helman’s experience and acumen in this space will be particularly useful for the firm, he adds.
What does he look for in a company?
“At Greylock, we used to say we were always looking at markets but I think market and people. You’re backing and partnering with a team so that’s very important. I prefer companies that have a technology or something unique that gives them an unfair advantage over the big companies that have a lot of cash. And the value proposition has to be very clear; customers won’t pay unless there’s proven value to them,” said Helman.
Which agri-foodtech categories excite him the most?
They all do. Diversification in the fund is key although it’s unlikely the fund will invest in the alternative protein space; “of course we need alternative proteins but it’s also where everyone else is focused right now and part of me doesn’t want to go where everyone else is. There’s that tension between going where’s exciting and attractive and everyone else is, and trying to find those pockets and spaces that are less busy. We can do both of course, but isn’t that like everything in life? The pendulum swings and before you know it, everyone wants to do whatever it may be. So we need to be opportunistic and open-minded because even categories you think are dead can come back again; just look at bottled water. Five years ago you wouldn’t have thought that could be a big space again and along comes Smart Water and Spindrift.”
Why Acre VP?
“After 30 years at Greylock, I really enjoy startups. I think in some ways Acre is a startup; it’s early for the industry and the team is just getting started with one fund behind them, so the startup aspect is attractive. I also think they have the model right; intense domain knowledge that we can use to add value to the portfolio that I don’t think many VCs can do. I remember when clean energy was important and we all made investments but had no idea what we were doing. This is different; they have positive and negative experiences from the first fund and they’ve learned a lot about what to do and what not to do. And lastly, this sector is so important; the ability to influence human and environmental health. You can’t read anything on the space without knowing that these are both really important topics.”