The fund, which is focused on business opportunites that can create a more resource-efficient food system, is supported by a range of institutional backers from Finland.
Nordic Foodtech VC has raised €40m at first close for its second fund, which plans to invest in pre-seed and seed-stage companies developing new technologies that can make the food and agriculture industries more resilient and healthy. The Helsinki- and Copenhagen-based company is targeting a final close of €80m.
The fund is backed by a range of Finland-based institutional investors, including state-owned investment company Tesi, Elo Mutual Pension Insurance Company, Valio Pension Fund, the pension fund of dairy company Valio, and food and drinks group Heino Group.
Raising funds amid a downturn in venture capital investments wasn’t easy, according to Louise Heiberg, partner at Nordic Foodtech VC.
“However, it’s clear to us and our investors that the current global food system is largely inefficient and not adequate to meet the needs of the planet or its people. As a specialist investor, we’re here to back the startups turning breakthrough science and solutions into real-world food system impact and solid returns. Food security, health and nutrition, and sustainable food systems will be catalysts for this sector,” Heiberg said.
Growth prospects
Nordic Foodtech VC raised €42m with its first fund, which was launched five years ago. Its 18-company strong portfolio is focused on the production of affordable protein ingredients, functional fats and oils, natural food colours and aroma compounds, as well as capturing nutrients from wastewaters and recycling waste streams into fertilisers.
“New technologies contribute significantly to sustainable food production. Nordic Foodtech VC is a unique player in the food tech sector in the Nordics with excellent prospects for growth,” said Peter Platan, investment director at the fund investment team of Tesi.
Just like with its first fund, Nordic Foodtech VC plans to work closely with universities and research institutions, who often lack access to early-stage risk capital, to close the gap between scientific discovery and industrial applications.
Nordic Foodtech VC said it will continue to lead early seed and pre-seed rounds in the Nordics and Baltics, and co-invest elsewhere in Europe, with ticket sizes ranging between a few hundred thousand euros to €2m. The fund will also hold a reserve for any “significant follow-on investments”, Nordic Foodtech VC said.
“With our whole team’s experience and expertise in investing in this sector, we are able to spot early on the startups that are solving tangible enough problems to generate good returns within a fund cycle,” said Lauri Reuter, partner at Nordic Foodtech VC.
