To raise a fund, this agtech outfit built a content company first (now it has $60 million to put to work)


Rob Leclerc has the kind of pedigree that investors tend to like: He has a master’s degree in computer science from the University of Calgary and a Ph.D. in computational biology from Yale. In fact, 10 years ago, what he really wanted to do with his degrees was to find and fund agriculture-related projects that tackle climate change.

But a decade ago, “agtech” wasn’t yet a category, and that was problematic when it came to pitching investors on the concept of an investment fund that Leclerc would run with partner Michael Dean, with whom Leclerc had previously operated an agribusiness in West Africa for several years.

At the time, “there were a handful of businesses” relating to agtech that investors were aware of, Leclerc said. Think Climate Corp and Impossible Foods and the smart machinery company Blue River. But Climate Corp hadn’t yet sold to Monsanto for $1 billion. Impossible Foods wasn’t valued in the billions of dollars, as it is today. And Blue River was still years away from its $305 million sale to John Deere.

“The overarching problem was narrative,” Leclerc said.  “People didn’t care about it.”

He and Dean might have just given up; instead, they started a San Francisco-based content company called AgFunder News.

“We thought if we could get people excited about food and [agriculture], maybe we’d be in a position to [raise a fund later],” Leclerc said. It was a smart bet. Fast forward and after posting more than 4,000 articles to the site and garnering 90,000 subscribers to the site’s weekly newsletter, Leclerc said AgFunder’s investment team – which now features four partners – just closed on $60 million in capital commitments for a new fund that they expect will reach $100 million over the next couple of months if things go their way.

It’s a huge step up from previous funds that Leclerc and company began raising several years ago – beginning with their newsletter readers. “We first raised a $2.5 million friends-and-family fund,” he said, “but then five months later, we needed more money, so we raised $2 million, then six months later, we raised $5 million.” And so on. It wasn’t the most conventional way to raise money, but AgFunder had this “massive subscriber base” to which it could talk directly about its fundraising efforts, Leclerc said, “and the belief that we know what we’re doing and can spot companies started a lot of conversations that we wouldn’t have had otherwise. It became a structural advantage.”

The strategy isn’t unprecedented. Leclerc said he was partly inspired by Michael Arrington, the founder of TechCrunch, who built a brand around entrepreneurship, then used the strength of that brand to launch an investing career. Meanwhile, Arrington was preceded in his path by investor Jason Calacanis, who earlier founded a media company, and more recent examples are beginning to emerge routinely. Among them: Londoner Harry Stebbings used his “Twenty Minute VC” podcast as a springboard into the venture world last year, and Nik Milanović, the author of a two-year-old newsletter called “This Week in Fintech,” in January launched an investing syndicate called the Fintech Fund.

Still, newsletter subscribers –  no matter how deep their pockets –  don’t invest tens of millions of dollars in a team without seeing some results first. And AgFunder (which has since broadened its LP base) already has some about which to brag. Among the 60 companies to so far receive a check from AgFunder was the autonomous tractor startup Bear Flag Robotics, which sold to John Deere last year for $250 million; Root AI, a startup that was developing a harvesting robot for indoor farms and was acquired by AppHarvest for $60 million last year; and Greenlight Biosciences, a biotech company focused on RNA research that went public last month by merging with a special purpose acquisition company.

If you’re curious about how much the firm owned in each of these companies, keep guessing. AgFunder – which tends to write checks of $500,000 as a starting point but also just wrote a check for $3 million – doesn’t think about ownership targets or look to own a specific percentage in a company, Leclerc said. While his team has used special purpose vehicles to maintain their pro rata in several companies, including a still-private molecular coffee company called Atomo Coffee, he said he doesn’t “get hung up on ownership. For me, the question is, ‘Does this investment return the fund or a multiple of the fund?’ If you get hung up on ownership, you can miss opportunities.”

As for criteria, AgFunder looks broadly across the food and “ag value chain,” Leclerc said. It also invests broadly geographically, with bets in India, Brazil, Mexico and Indonesia, among other places.

It’s lot of ground to cover, so the outfit relies heavily on its head of engineering and the in-house system he has devised to crawl sites and databases for signals that it then distills down to “50 to 100 companies each week” that could be of interest. (One apparent gem it uncovered was Retailo out of Pakistan, a B2B marketplace that connects bodegas with the goods and services they might need, and which recently closed on $36 million in Series A funding. AgFunder has now backed it across two rounds.)

Yet AgFunder has other sources of deal flow, too, and one of these is, yes, that newsletter readership. Indeed, asked about how it found that coffee company Atomo — which says its product produces 93% fewer carbon emissions than conventional cold brew coffee — Leclerc said the tip came from a limited partner who’d signed on as an investor after first becoming a regular reader.

“An LP who’d followed us for a long time on AgFunder News wrote us, saying, ‘You probably see a lot of things; this company you should check out.’ So we did,” Leclerc said.

More TechCrunch

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

2 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

2 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo