Rob Leclerc has the kind of pedigree that investors tend to like. He holds a master’s degree in computer science from the University of Calgary and a doctorate in computer biology from Yale. In fact, ten years ago, what he really wanted to do with his degree was find and fund agriculture-related projects that address climate change.
But ten years ago, “agricultural technology” was still not a category, and that was the problem when it came to convincing investors of the concept of a hedge fund that Leclerc would run with partner Michael Dean. , with whom Leclerc previously ran an agribusiness. West Africa for several years.
At the time, there were “a handful of businesses” related to agritech that investors were aware of, Leclerc said. Think Climate Corp and Impossible Foods and smart machinery company Blue River. But Climate Corp has not yet sold it to Monsanto to 1 million dollar. Impossible foods are not valued in billions of dollars, like nowadays. And Blue River is still a long way from being able to sell $ 305 million to John Deere. “The overarching issue is the narrative,” says Leclerc. “People don’t care about it.”
He and Dean may have just given up; instead, they founded a San Francisco-based content company called News AgFunder. “We thought we could get people excited with food and [agriculture]maybe we’ll be in a position to [raise a fund later],” Leclerc said. It’s a smart bet. Leclerc said: Fast forward and after posting more than 4,000 articles to the site and attracting 90,000 subscribers to the site’s weekly newsletter. AgFunderIts investment team – which currently has four partners – has just closed a $60 million capital commitment for a new fund that it expects to hit $100 million in the next few months if things go right.
That’s a big step up from previous funds that Leclerc and company started raising a few years ago – starting with people reading their newsletter. “First we raised $2.5 million worth of friends and family,” he says, “but then five months later we needed more money, so we raised $2 million.” dollars, then 6 months later we raised $5 million.” And such. It’s not the most conventional way to raise funds, says Leclerc, but AgFunder has a “huge subscriber base” that it can speak to directly about its fundraising efforts and trusts we know. what we were doing and was able to spot companies that started a lot of conversations that we didn’t have. It has become a structural advantage.”
This strategy is not unprecedented. Leclerc says he was inspired in part by TechCrunch founder Michael Arrington, who built his brand on entrepreneurship, then used the power of that brand to launch an investment career. Meanwhile, Arrington has been forged in his way by investor Jason Calacanis, who previously founded a media company, and more recent examples are starting to appear regularly. Among them: Londoner Harry Stebbings used his podcast “Twenty Minute VC” as a springboard into the world of adventure last year, and Nik Milanović, author of a two-year-old newsletter called “This Week in the Week” Fintech”, in January launched a investment syndication called Fintech Fund.
However, newsletter subscribers – no matter how deep their pockets – should not invest tens of millions of dollars in a group without seeing some results first. And AgFunder (which has since expanded its LP base) had some things to brag about. Among the 60 companies that have so far received checks from AgFunder is automated tractor startup Bear Flag Robotics, which was sold to John Deere last year for a price. 250 million dollars; Root AI, a startup developing a harvesting robot for indoor farms and acquired by AppHarvest for 60 million dollars last year; and Greenlight Biosciences, a biotechnology company focused on RNA research went public last month by merging with a special purpose acquisition company.
If you’re curious about how many companies own in each of these, keep guessing. AgFunder — which tends to write checks for $500,000 as a starting point but also only writes checks for $3 million — isn’t thinking about ownership goals or looking for a specific percentage of ownership in a company, Leclerc asserts. While his team has used special purpose vehicles to maintain their share in a number of companies, including a still-private molecular coffee company called Atomo Coffee, he said he was not “suspended in possession. For me, the question is, ‘Will this investment return the fund or a multiple of the fund?’ If you get hung up on ownership, you may miss out on opportunities.”
As for the criteria, AgFunder looks broadly across food and “agricultural value chains,” says Leclerc, and it also looks geographically wide, with bets in India, Brazil, Mexico and Indonesia , and other places.
Because that’s a lot of base to cover, the outfit depends a lot on technical head, who helped the group pass its weight thanks to an internal system he invented to crawl websites and databases for certain signals and distill the findings. its current down to “50 to 100 companies per week” may be of interest. (One obvious gem it discovered was Retailo out of Pakistan, a B2B marketplace that connects bodegas with goods and services they might need and that recently closed. 36 million dollars in Series A funding. AgFunder has now supported it over two rounds).
But AgFunder also relies on that newsletter readership. Indeed, when asked how they founded Atomo – the company said its product uses 94% less water and produces Reduce carbon emissions by 93% than regular cold brew – Leclerc said it didn’t come from AgFunder’s internal software but from one of its limited partners, who became an investor after becoming a regular reader.
Leclerc recalls, “One LP who followed us for a long time on AgFunder News wrote to us, ‘You can see a lot of things; This company you should check out. ‘ So we did. ”