Manitoba First Fund invests $5M, targeting ag tech startups

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This article was published 04/07/2024 (697 days ago), so information in it may no longer be current.

Manitoba First Fund has made its fourth fund investment, this time tapping Calgary-based Tall Grass Ventures, which specializes in agriculture technology startups.

MFF invested $5 million in Tall Grass, closing that fund’s inaugural raise at $32 million.

In addition to the $5 million from Manitoba, Tall Grass has set aside another $5 million and will commit to investing $10 million into early-stage ag tech companies based in Manitoba.

Tall Grass Ventures already has about a dozen investments in its portfolio from across the country, but previously none in Manitoba.

Wilson Acton, who co-founded Tall Grass along with Chris Edwards, said the MFF investment will focus its attention that much more.

“Manitoba is a tremendous opportunity for us,” said Acton. “We’ve looked at Manitoba before, and now with the support from Manitoba First Fund, it becomes a no-brainer.”

Tall Grass is currently in the process of doing due diligence on a couple of firms based in the province, he added.

Ken Ross, CEO of MFF, said many of the companies Tall Grass is investing in have a focus on finding innovative ways to produce agricultural products and might be more geared to the future, addressing the challenges of feeding a growing population and climate change.

MFF’s three previous investments have been in funds that target mid-market enterprises (companies that already have established businesses and revenues).

Ross said MFF — which has been capitalized with a $100-million investment from the provincial government — has always insisted its intentions were to invest in the whole spectrum of business development needs, including early-stage startups.

“That’s a very important part of the fund portfolio that we are trying to put together,” Ross said.

The Manitoba entity continues to look to invest in other funds that target early seed investments, to go along with the Tall Grass move, he added.

“It is hard space to be successful in,” Ross said. “But we want to make sure we cover that end of the investment spectrum so that we properly address it in our portfolio of funds.”

Tall Grass will set up an office in Manitoba and hire a full-time staffer, bringing its total workforce to six.

Acton said the fund, which was formed in 2022 with original investment from high-net worth individuals whose wealth came from prior involvement in the agricultural industry, has already invested about one-third of its capital and needs to save that much and more for add-on investments.

In addition to making its investments go a long way by investing in the early stages, it will also provide management support, which can be its own form of investments in some cases, Acton said.

The firm has already invested in companies from New Brunswick to B.C., typically ones that have strong applicability to Canadian agriculture.

Those companies are engaged in everything from gene editing and biological solutions to software and hardware solutions in speciality crops, plant-tissue sampling, grain grading and beyond, Tall Grass said.

martin.cash@freepress.mb.ca