May 16, 2017

Rabobank has announced the launch of the Rabo Food & Agri Innovation Fund – a new venture capital fund that will be included under the umbrella of Rabo Private Equity. The targeted size of the fund has not yet been disclosed.

Aligning with Rabo’s Banking for Food Strategy which is focused on global food security, the new fund will target investments in high-potential, early stage food and agriculture companies in the developed markets of the U.S. and Western Europe with the goal of fostering innovation in the food and ag sectors.

“This strategy focuses on contributing to food security in the context of a rapidly growing world population, changing demographics and consumption patterns, and an increasingly complex food system,” said Lizette Sint, global head of Rabo Private Equity.

The relationship with portfolio companies in its Rabo Food & Agri Innovation Fund will be enhanced beyond simple capital deployment, with Rabobank offering selected companies full access to its range of experts and global networks with a view toward building long-term value through collaboration.

“We consider investments all along the food and agriculture value chain, with a particular focus on ambitious companies that operate in sectors in which we can optimally leverage Rabobank’s knowledge, expertise, network, and position to help create shareholder value,” said Richard O’Gorman, who leads the investment initiative as part of Rabo Private Equity.

This announcement by Rabobank adds to a growing list of leading food companies and leading investors that have launched venture capital units as a means of gaining early involvement with innovative startups that could give them a foothold in a shifting consumer market or advance systems that could positively address global food challenges.

In the first three quarters of 2016, venture capital investments in the food and ag space reached $420 million as more and more players launched their own VC funds.

One of the most prominent of such funds is 301 Inc. launched by General Mills in October 2015. Others include the $125 million Acre Venture Partners launched by Campbell’s Soup; Eighteen94 (1894) Capital launched by Kellogg’s; Startup Next Food & Tech, which was launched by Land O’Lakes in partnership with Techstars; and Techstar Connection, launched by AB InBev’s venture arm, ZX Ventures, also in partnership with Techstars.

Indeed, the strategic move of launching a venture capital unit has the potential to be mutually beneficial to both the investor, the startups involved, and society as a whole – giving the investor the ability to foster research and developments that can boost their existing business while also fostering the commercialization of innovative technologies and products that can improve the human condition without assuming the entire risk. Meanwhile, if certain startups are successful, the initial investment gives the investor a proprietary stance in regard to a full acquisition at a later date.

“We believe that sustainable partnerships in the food and agri value chain are key to guaranteeing food security in the future,” said Rabobank in regard to its Banking for Food initiative. “We’ve serviced and supported our clients in these chains for many decades. And we will continue to service them, providing them with access to finance to develop and improve their businesses, enabling them to sustainably play their part in ensuring long-term food security.”

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.