Fundraising Out Loud #8: frontiers beyond food, fiber, and fuel

November 8, 2022

“So, what areas in food and agriculture are you excited about?” 

The more investors and I talk to, the more I believe that the way we do the work to answer this question is key to what differentiates us from other VCs.  

Like others, we learn so much from the incredible entrepreneurs we meet and the diligence we do to make an investment decision on what comes into our funnel. 

But unlike many others, we are thesis-driven. We proactively identify areas we believe are ripe for innovation, and explore them by talking to experts across industry, academia, and the corporate world.

These “opportunity areas” sit under the pathways we’ve defined for systems-change in agriculture and food, and they come in three flavors:

We’ve not yet finalized the opportunity areas we’ll dig into next year, but in the spirit of raising out loud, and in hopes that others can help advance our thinking, we’re sharing some of the areas we’re excited about. Here are three on my mind:

Frontiers beyond food, fiber, and fuel (trend-led)

Today, we largely grow plants for food, fiber, and fuel. I believe that in the future, mounting pressures like climate volatility, value-chain decarbonization targets, and shifting consumer demands, will mean that plants will be used (and valued) for a much broader set of use cases. 

Examples range from cover cropping, environmental remediation, and native vegetation for the creation of ecosystem service credits, to plant “factories” as live synthetic biology labs and crops as CO2-sequestering miners of critical metals. 

As demand for theses new plants grows, we’ll need new enabling technologies such as:

  • automated, data-rich propagation systems
  • computational biology-enabled trait discovery and breeding platforms
  • processing, logistics, and finance models, especially those repurposing stranded assets and engaging with previously non-agriculture partners (e.g., mining and energy companies)

Farm-wide energy and electrification (technology- and trend-led)

Pressures to measure and reduce scope three emissions, rising input costs, and trends toward regional and national sovereignty are changing the demand and usage dynamics of energy on farms. Simultaneously, renewable energy technologies, from photovoltaics and green ammonia to electric vehicles, are decreasing in cost and increasing in viability, creating opportunities to reimagine energy systems in regional areas and on farms.  

These shifts are creating challenges, and possible venture-scale opportunities, including:

  • tools for whole-of-farm demand planning and grid integration, as equipment, irrigation systems, and infrastructure compete for the renewable energy that’s produced in new ways and new locations
  • systems that create 1 + 1 =3 opportunities by integrating agriculture and energy production, from agri-voltaics to on-site fertilizer and fuel production
  • novel ownership and finance models for distributed, renewable energy production at the farm and regional levels

A plastic-free world (problem-led)

From ketchup sachets to cotton bales, food and agriculture uses A LOT of plastic. Poor greenhouse gas emissions credentials and evidence of negative human (e.g., residues in foods) and environmental (e.g., ocean pollution) impacts are putting the use of plastics under pressure. 

To date, circular economy solutions (e.g., upcycling food waste) and synthetic biology approaches have attracted investment, but performance, end-of-life management, and scalability have proven challenging.  

Given the scale of the problem and breadth of the use cases, I want to spend more time thinking about:

  • what materials will replace plastics and what might the second order consequences be of scaling these new value chains (e.g., competition for waste streams, emissions credentials of production)? 
  • what business models will be able to solve for behavior change across individuals and industries?  
  • what solutions will we need to scale to manage the inevitable plastic waste that will still exist?

Bonus #4: a non-ag opportunity area (technology-led)

Beyond food and agriculture areas, I’m also fascinated by the opportunity that audio content presents. This medium is in its infancy. For example, it’s not yet searchable, and content creators have very crude tools, including for monetization. 

Other than “listening” for biodiversity and automated data capture, I’m yet to find compelling use cases that fit our mandate, but it’s an area where I believe we’ll see huge amounts of innovation, so I’ll be watching…or rather, listening! 

We’re proud to be a thesis-driven firm and I’m stoked to dig into these (and other!) opportunity areas in the future. How about you?

This is the latest post in our “fundraising out loud” series. To learn more about investing in Fund II and our vision for a digitally-native and climate resilient food system, get in touch here. Early-stage agri-food tech startups looking for funding, reach out here.

Disclaimer: The information in this post is not investment advice or a recommendation to invest. It is general information only and does not take into account your investment objectives, financial situation or needs. Before making an investment decision you should read the information memorandum and seek financial advice from a professional financial adviser. Whilst we believe Information is correct, no warranty of accuracy, reliability or completeness is given, except for liability under statute which cannot be excluded.

Key takeaways

  • As a thesis-driven firm we proactively research problem-led, technology-led, and trend-led opportunity areas
  • Future opportunity areas we're excited about include: frontiers beyond food, fiber, and fuel; farm-wide energy and electrification; and a plastic-free world
  • Tenacious Ventures is fundraising for Fund II and looking for investors who believe in the future we are creating