Venture capital

Vetting startups in ag tech? Here’s how Astanor Ventures does it.

Valerie Christy breaks down Astanor Ventures’ investing strategy in ag tech startups.
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· 5 min read

Tech is a critical part of agriculture—no matter if it’s autonomous tractors, space imagery, or flying drones. But even the world of the most ambitious ag tech companies need funding. Enter Astanor Ventures, an EU-based firm specializing in ag-tech venture funding.

Astanor Ventures was founded in 2017 and manages a portfolio of over 30 startups specialized across the ag industry, including vertical farming, autonomous equipment, AI, and insect breeding. The firm’s assets under management represent about €500 million.

We spoke with Valerie Christy, impact investor at Astanor Ventures, to discuss the firm and its outlook when it comes to investing in and leading ag tech startups.

This conversation has been edited for length and clarity.

What sort of tech companies does Astanor invest in? What is the portfolio made of?

I specifically am in the US, and I work with a lot of our US companies. You have a company like Monarch Tractor, which is an electric-tractor company and so not only the notion of the same as any electric car but the reduction of emissions switching to an electric vehicle, for example, [has] huge impact on the farms…Monarch is super interesting because you think about how much a farmer needs to pay to be able to have those boots on the ground, driving the tractors around, recording all the data, applying all of the practices on the field, and Monarch can be autonomous. A farmer, in theory, can pull up his phone in the morning from bed and see how the tractors have set out and begun working. It’s an example of not just a carbon emissions solution, but many impactful solutions on the farm level.

What are some of the considerations that a fund like Astanor is making in terms of selecting which company to choose to invest and spend time and resources on?

When we think about the impact versus the business kind of case, we think they’re one in the same, that the two shouldn’t be mutually exclusive. In theory, any company that’s successful, as a company grows, it touches more people, it has more of an impact. As long as the company is rooted in a sustainable ethos of doing better, in theory, as the company does well, it should be more impactful. We don’t think that they need to be mutually exclusive by any means. It’s not impact at the sacrifice of returns.

For us, what we look at is, “Is there a big enough market opportunity here? Is the total addressable market (TAM) big enough?” Sometimes we look at solutions and they’re too niche, or they seem more suitable for philanthropic financing as opposed to venture financing because they’re not projecting a growth that we would be looking for, really putting dollars to work over time. We’re looking for big ideas that offer big solutions that can have a big impact. So making sure that it’s something that’s in line with that as opposed to alternative forms of financing is important to us.

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How does Astanor deal with challenges that might arise working with these startups?

It’s an ongoing process, I’d say, and now times are very different than how they were before. It’s a different set of obstacles. There was a lot of cash and companies were raising a lot of money at very high valuations the past couple of years. That set certain expectations, and companies got on a certain track that was also, this idea of prioritizing growth over profitability…I think food is an interesting sector, because food needs to grow, consumers need to buy it…Many companies partner with the big food brands. Historically, it takes a while to make progress and to get inroads. I think patience is key while having to strive to move as quickly as possible. One of the reasons that we haven’t invested in cellular meat, for example, is just looking at regulatory hurdles and time. It’s going to take a while to bring those products to market. And then you look at once they’re able to be in the market, how you get consumers eating it. We’ve seen it with the plant-based sector. There’s initial excitement, but the products need to keep improving, and they keep needing to get better to become more mainstream and accepted and enjoyed by consumers.

What is Astanor keeping an eye on in the next year? What sort of companies in the future is Astanor looking to invest in?

There are several areas that are still relatively untapped for us. When you look at our key KPIs, for example, the biodiversity space is very interesting. While we’re deeper in our understanding of the carbon markets and the carbon space, I think there’s an opportunity and potential for biodiversity tracking and measuring to become more relevant, which is exciting. We haven’t made an investment in a traditional soil-health company. …Ultimately, [we’re] trying to find these companies that are offering something that the farmer really needs, and is willing and able to pay for. Given the small margins that they have, it needs to be something we believe is really essential to them.

On the far side of things, we’re looking at everything from soil to gut. When we say gut, I think this sector of, whether you call it “food is medicine,” or “food as medicine,” but the emergence of the food industry and healthcare is super interesting as well… We’re not going into pharma by any means. But there’s going to be some spots in between that I think are really exciting.

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Tech Brew keeps business leaders up-to-date on the latest innovations, automation advances, policy shifts, and more, so they can make informed decisions about tech.