A new option for agri-tech commercialization

Meet Bioenterprise Canada’s sustainable innovation sponsor Carrot Ventures

The road to commercialization can be difficult for start-ups. Recognizing this challenge in the Canadian agri-tech space, venture capital investor AVAC Group decided to act and create a new option for innovators to bring their technologies to market.

The result is Carrot Ventures Fund I, L.P. (Carrot Ventures), a $15 million venture capital fund backed by AVAC and Farm Credit Canada (FCC). Rather than investing in existing businesses, Carrot takes a different approach to supporting agri-tech innovators by forming new companies around vetted, venture-scale technologies, carefully selecting the founder-CEO to head each company and leading the seed financing to ensure the companies are properly launched.

“We recognized there was a gap in the funding ecosystem, and FCC agreed.  FCC participated alongside us to create fund, Carrot Ventures, based on an innovative company formation business model,” says Martin Vetter, Senior Investment Manager at AVAC and Venture Partner at Carrot Ventures. “Carrot is the Third Option for Commercializing AgTech. If you don’t want to be an entrepreneur and build a company yourself, or if your company has stranded assets which it is unable to commercialize, we’re an alternative that can help you get value from your intellectual property.”

Carrot Ventures’ sector of interest is agri-tech, which it defines as “farm to fork”, on land or sea, and includes everything from soil health and crop inputs to digital and precision technologies and food processing innovations.

Its first success story is Susterre Technologies, a company pioneering the use of ultra-high pressure fluid jet technology for planting. Susterre makes it easier for farmers to adopt environmentally friendly no-till and conservation tillage practices, which have the benefit of minimizing erosion and chemical run-off, while boosting soil health. However, these regenerative farming practices can make it difficult for conventional planting equipment to cut through plant residue and compacted soil to actually plant the corn, soybean and other seeds.

“Susterre has taken a well-proven technology used in another industry – ultra-high pressure fluid jets are used in industrial applications to cut steel – and is applying it to agriculture,” explains Investment Associate Alexander Lazier. “We expect this will boost adoption of no-till, which has carbon sequestration and agronomic benefits, placing Susterre squarely in the sustainability domain.”

In fact, sustainability is a consequence of all the investments Carrot Ventures looks at. It’s part of what attracted Carrot to the new sustainable innovation sponsorship opportunities available from Bioenterprise, Canada’s Food & Agri-Tech Engine. Lazier notes, though, that the Engine’s deeply rooted national network and other supports for start-ups and innovators are also key benefits for Carrot and its companies.

“Bioenterprise has a significant network. Since Carrot starts right at the beginning by forming and funding companies dedicated to commercializing a given technology, we understand the value of being networked into the greater accelerator ecosystem,” Lazier says. “Bioenterprise has an almost 20-year history, and we see the value of having a partner who can come to the table with relationships, deal sourcing and collaborative solutions for shared goals.”

At the same time, the new relationship means Bioenterprise Canada can help Carrot identify new technologies and refer innovators looking to commercialize intellectual property without becoming entrepreneurs themselves.

Bioenterprise Canada is Canada’s Food & Agri-Tech Engine, bringing more than 15 years of industry experience and a national and international network of research institutions, academia, mentors and experts, government, and industry to help small and medium-sized businesses in the sector nationwide Connect, Innovate, and Grow.