S2G Ventures Announced $180M Close on Fund II; Expands Team
September 20, 2017
Multi-stage food and agriculture-focused venture firm S2G Ventures announced a $180 million close on its second fund, and the addition of Aaron Rudberg to the team in the role of managing director and chief operating officer.
Co-founded in 2015 by managing directors Victor E. Friedberg, who was himself a co-founder of the Launch accelerator, Sanjeev Krishnan, formerly with CLSA Capital and the Global Environment Fund, and Chuck Templeton, the founder and former chief executive of Open Table, S2G debuted with Fund I at a corpus of $125 million – the largest such fund at the time.
Since then, the firm has targeted seed, venture, and growth-stage investment opportunities not only in its core targets of agriculture, ingredients, infrastructure and logistics, but in companies and entrepreneurs that are on the cutting-edge and positioned to capitalize on consumer demands including a high level of nutrition, transparency, and sustainability. The firm also pursues investments in IT and hardware, food safety and technology, and retail and restaurants.
To date, approximately 40 percent of Fund I’s capital has been invested and 70 percent has been committed, according to Crain’s Chicago Business. The firm has built a portfolio of 30 companies that in aggregate are expected to achieve more than $550 million in revenue in 2017, and average growth of 150 percent over 2016 revenues.
Much of this growth is driven by S2G’s ability to identify specific startups and technologies that are tapping into the sea-change in not only what foods are being bought, but how they are being bought.
“Consumers are buying around sustainability, health, and dietary limitations now,” Krishnan told CNBC. “At the same time, they don’t trust big companies as much as they once did. They are able to find new items to try on social media and online. This is allowing more fragmentation and creates opportunity for companies that can use data to find and connect with their customers.”
More Capital, More Capability
The addition of the second fund gives S2G greater freedom to seize even larger rounds moving forward.
“There was inbound interest, and we continued to see deal flow we liked,” Templeton told Crain’s. “A $125 million fund is not that big of a fund. These are businesses that need to raise $20, $30, $40 million. We needed a little more capability. With the previous fund, we talked about going up to about $10 million. Now we can go up to about $25 million.”
It also called for the expansion of the S2G team with the addition of Rudberg – a 10-year veteran with Baird Capital where he was partner and managing director responsible for global strategy, investor relations, marketing, and business development for the $3.3 billion global venture and private equity business.
“Over the last several years, we have been able to help entrepreneurs across the food and agriculture industry realize their growth potential while making a significant positive impact on the overall food system,” said Sanjeev Krishnan, chief investment officer and managing director, 2G Ventures. “We are excited about extending our reach in this dynamic industry, while at the same time continuing to invest in building out our own team. Aaron’s leadership experience, strategic thinking and proven ability to deliver results have made us confident he is the right person to help execute our strategic priorities and drive further growth.”
S2G’s portfolio of companies includes some of the most up-to-the-minute, disruptive, dynamic, and innovative startups in the food and ag spaces. Among the rank and file are Ripple, a producer of plant-based dairy-alternative products from pea protein, which raised a $30 million Series B including S2G in July of last year; Kuli Kuli, a manufacturer and distributor of moringa-based bars, powders, and energy shots, which S2G backed in a $4.25 million Series A this January; and MycoTechnology, a pioneer in developing new food processing systems using mushroom roots, which S2G led a $6.7 million Series A for in August 2015 before the company went on to raise a $35 million Series B this September. Other notable companies in the S2G portfolio include Terramera, Blue Prairie Brands, Beyond Meat, Shenandoah Growers, and Arable, among others.
“We are excited to be able to support some amazing entrepreneurs making a real and necessary change in the food and ag space,” said Templeton. “The additional capital along with the depth of Aaron’s experience will help us to accelerate the innovation happening at every point in the food system from soil to stomach. We recognized the need for increasing the capacity to provide value to our companies and Aaron’s experience is a perfect match to get there.”
S2G not only is looking to add value for its companies, but is also indicating that it is looking to continue to expand the firm, as Templeton states, “We will continue to add experienced teammates who are committed to improving the overall food system.”
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