May 4, 2021

By Lynda Kiernan, Global AgInvesting Media

Multi-faceted venture capital firm AVAC has launched Carrot Ventures Fund I – a fund taking a novel approach in how it plans to drive agtech commercialization. 

Created with financial backing from AVAC and Farm Credit Canada (FCC), the mission of Carrot Ventures is to address the systemic challenges being faced by agtech startups such as a limited ability to raise capital, CEOs and management teams that present as univestable, lack of compelling value propositions, awkward capital and corporate structures, or a lack of governance. 

Carrot acknowledges that there are set options for commercializing ag technologies. A tech entrepreneur could lead their own startup, or could launch a product under the umbrella of a parent company. Carrot calls itself “the third option“.

“The Carrot company formation model provides a way to accelerate from start-up to market leadership very quickly and we are excited to provide inventors with a third option as they consider commercializing their technologies,” said Warren Bergen, president, AVAC Ltd. “We are also very pleased that Canada’s leading agriculture lender, FCC, is partnering with us on this new approach to create Canadian AgTech companies.”

Under its structure, rather than invest in existing companies, Carrot will source and vet new technologies, offering holders of this IP a new roadmap to commercialization, while offering syndicating agtech investors a stream of compelling startups in which to invest.

Once IP rights are in-hand, Carrot will then recruit an experienced CEO and create a new company based around that technology. Carrot is the first institutional investor in each venture. The CEO assumes the role of company founder, creates a business plan, raises capital (which is made easier by having Carrot as an existing investor), and builds a team.

Once established, Carrot then ensures board-level oversight for each company, enabling its portfolio companies to capitalize upon extensive industry and financial networks.

As a result, shareholder value is maximized and technologies that can solve real-world problems reach the market in a properly structured and financed way.

“Carrot Ventures is an innovative approach to AgTech commercialization in Canada,” said Rebbecca Clarke, vice president and treasurer, FCC. “AVAC has developed a great team of experienced investment professionals and is a long-recognized venture investor in the technology space. We recognize the value of the Carrot Ventures model and the positive impact this fund can have on AgTech innovation.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan@globalaginvesting.com.