Cultivian Sandbox Ventures, which recently established a presence in Ann Arbor, is leading the emerging national trend in agriculture funding. With offices in Chicago and Indiana, the firm is looking to tap in to Michigan’s unique assets to build on its current success and support its long-term growth.
Cultivian Sandbox Ventures recently closed on $68 million for its second fund, following its successful $34 million Fund I. From Fund I, Cultivian made nine investments, including one that recently issued an IPO and another that executed a successful exit.
With an eye on building on its success to date, choosing Michigan was a natural choice for Cultivian.
“Michigan has one of the most aggressive economic development focus in the nation,” explained Matt Bell, who is heading up Cultivian’s Michigan operations. “Start-ups have a strong incentive to choose Michigan because they know they’ll get the support they need to grow. Plus, there’s a broad agricultural base in Michigan, which is of particular interest to Cultivian. Having Michigan State University and University of Michigan here – two quality universities in a small geographic footprint – is also a compelling reason for our firm, and the companies we fund, to choose to grow here.”
According to a United Nations report, the global demand for food is expected to double in the next 50 years. Demand for food and agriculture technology will continue to grow in tandem with the need for food around the world, ultimately bringing prominence to agriculture innovation.
This future potential in agriculture technology pulls forward Cultivian’s past: Cultivian’s founders are agriculture industry veterans. They bring more than 50 years experience and enviably deep networks to their investments. It’s no surprise that its Fund I companies have achieved remarkable success. Aratana, based in Kansas City, went public in June, and Divergence, another of the Fund’s investments, exited to Monsanto in 2011.
“There’s more interest and investment in agriculture than ever before,” said Bell. “More people are looking at deals, more companies are starting up in the sector, and there are more options for syndicates. It’s a perfect storm of money and people, and Cultivian is at the epicenter of this agricultural investment activity.”
From Ann Arbor, Cultivian will continue to push agricultural investing forward. “The intent of the fund over the next couple of years is to establish a strong portfolio and strong returns for investors,” explained Bell.
“We think that there’s more opportunity for investment in agriculture,” Bell added. “What we want to do is to encourage others to invest in and raise money in this space. We want to put investing in agricultural start-ups on the map.”