Climate Insider Brief:
- Women-led firm The51 closed its $51M CAD Food and AgTech Fund after four years, overcoming VC market challenges like valuation corrections and limited capital access.
- The51’s first sector-specific fund will invest $350K–$2M in early-stage startups using AI, robotics, and biotech, with six companies funded, including Erthos and ArkeaBio.
- General Partner Alison Sunstrum said the tough VC climate led The51 to refine its thesis, expand in Canada, and focus on scalable companies, with increased deal flow in late 2024.
Women-led venture capital firm The51 has reached the final close of its $51-million CAD Food and AgTech Fund after nearly four years of active fundraising. This milestone marks a significant achievement in a challenging venture capital environment, according to a joint statement from The51 and Alberta Crown corporation ATB Financial, which contributed the final dollar to the fund in late 2024.
Supporting Innovation in Food and Agriculture
The Food and AgTech Fund, The51’s first sector-specific fund, is dedicated to investing in diverse founders who are transforming the food and agriculture sectors with advanced technologies. The fund focuses on early-stage startups, providing investments between $350,000 and $2 million per company, targeting pre-seed to Series A rounds.
“This final close empowers The51 Food and AgTech Fund to accelerate the growth of early-stage companies revolutionizing agriculture,” said Alison Sunstrum, The51 general partner, in a statement. “By leveraging technologies like AI, robotics, and biotechnology, these companies are poised to transform the industry.”
The fund has already invested in six companies, including Erthos, ArkeaBio, and Synergia Biotech.
Raising Against the Odds
Initially announced in September 2021 with a $25 to $30 million target, The51 expanded its goal to $50 million after heightened investor interest in 2022. By April 2023, the firm had secured $30 million, led by Farm Credit Canada, with additional backing from Alberta Enterprise Corporation, National Bank of Canada, family foundations, and individual accredited investors from agribusiness and farming sectors.
However, fundraising became increasingly difficult as agtech venture capital faced significant challenges through 2023 and into 2024. “We did not know how tough things would get as we sought to close the fund,” Sunstrum explained in an email statement.
Sector-wide valuation corrections, tightened access to capital, and cautious LP investors forced The51 to refine its approach. “The current VC environment forces discipline,” Sunstrum noted. “We honed our thesis, built a new AgTech-focused management entity, and expanded our reach with offices in Calgary, Vancouver, and Toronto.”
Adjusting to Market Realities
Despite the hurdles, Sunstrum observed a significant increase in deal flow in late 2024, with founders aligning valuation expectations to more realistic levels. “This trend reflects a broader market correction,” she said. “We are prioritizing companies that demonstrate clear paths to scalability and profitability.”
Backed by major players like Realize Capital Partners, Boann Social Impact, and the Canadian government’s Venture Capital Catalyst Initiative, the fund’s success stands as a testament to its resilience and focus.
Looking Ahead
As The51 deploys capital from its Food and AgTech Fund, its mission to support transformative innovation in agriculture continues. By investing in technologies that address global food security and sustainability challenges, The51 aims to pave the way for a more resilient and efficient agricultural ecosystem.
Source: Betakit
Featured Image: Credit: The51
