A few years ago, when Eric O’Brien was still a managing director at Lightspeed Venture Partners, he started noticing more deal flow coming from startups in the agriculture industry.
Although many looked promising, most of his established Silicon Valley due diligence networks had little expertise in the space.
O’Brien looked farther afield, turning to his old college buddy Clay Mitchell, an Iowa corn farmer and Harvard University bioengineering grad.
Mitchell had made a name for himself as one of the more tech-savvy guys in agriculture. The two looked at a lot of companies, saw plenty of potential in the sector and eventually decided to launch their own fund to capitalize on all the innovation in the ag industry.
Last year, O’Brien and Mitchell closed on $127 million for a new fund, Fall Line Farms Fund I, to invest in a combination of farmland and ag-tech startups. The pair are focused on the farmland side, principally in acquiring and managing commodity cropland with an eye to improving production. They’re also actively searching for ag-tech investments, but have yet to start writing checks.
“It’s fun. I’m having a blast and enjoying the challenge of learning a new domain,” O’Brien said of his new gig.
It’s been a low-profile endeavor so far, without even a dedicated Fall Line Farms website.
But they have been poring over plenty of business plans. To date, O’Brien said, “we’ve looked at just about every venture-backed ag company you’ve probably heard of.”
When they do start investing, the plan is not to lead rounds but to serve as a strategic investor. They’re particularly interested in technologies that could have a material impact on production from their own farmland.
This story first appeared in Reuters Venture Capital Journal.