Quick recap

Farm Credit Canada (FCC) has established a new venture capital arm, FCC Capital, to expand its role in the agricultural innovation ecosystem. The venture capital market, particularly in AgTech, remains robust despite recent fluctuations, with increasing diversification of investment sources and a focus on IP-differentiated businesses. FCC is implementing various initiatives to support agricultural innovation, including the Innovation Farm Network and a $2 billion fund for equity investments in agricultural technology startups.

Next steps

• Eric to send out invitations to companies for the November 18th event in Chatham-Kent to attract high school students to AgTech.

• ARWG to include information about the November 18th Chatham-Kent AgTech event in next week's agenda.

• ARWG to publish the recording of this meeting on their website in about 6 weeks.

• ARWG to invite Matt Randall from Clearpath Robotics and representatives from Avidbots to share their experiences building businesses at scale in future meetings.

• Graham to send additional names of potential guest speakers from non-agricultural robotics companies to Joe or ARWG.

• ARWG to follow up with Graham about having a conversation about the FCC Innovation Farm Network in a future meeting.

Summary

FCC's Venture Capital Expansion

Graeme provides an overview of Farm Credit Canada (FCC) and its new venture capital arm, FCC Capital. He explains that FCC is a Crown corporation focused on providing capital to the Canadian food and agriculture industry, with a $57 billion loan portfolio. FCC Capital was established in April 2024 to expand FCC's role in the innovation ecosystem, offering direct investments, fund investments, and strategic financing options. In its first year, FCC Capital deployed over $170 million in direct investments and has committed $650 million across 22 funds. Graeme emphasizes that FCC Capital aims to catalyze investments alongside lead investors, with a minimum check size of $5 million for direct investments.

Robust Venture Capital Market Insights

Graeme discusses the venture capital market, emphasizing that while it's not suitable for everyone, it serves as a good indicator of capital flow in the innovation ecosystem. He focuses on US data, which represents about 50% of the global venture capital market and is a leading indicator for other markets. Graeme highlights that despite recent headlines suggesting a downturn, venture capital deployment in 2024 was historically high, with more capital invested than in 16 of the last 20 years. He also notes that Q1 2025 saw capital flows in line with 2021 levels, with $91 billion invested in the US alone, indicating a robust venture capital market, particularly in areas like generative AI.

Frontier Tech and Agribusiness Trends

Graeme discusses trends in venture capital investment, focusing on frontier tech and the Canadian market. He notes that frontier tech investment has increased by 50% from 2022 to 2024, while the Canadian VC market, despite recent declines, is still above historical levels. Graeme highlights issues with how agribusiness investments are categorized, often being misclassified under other sectors. He also presents data on global agtech investments, emphasizing that 2024 was a record year after 2019, and points out the increasing diversification of investment sources beyond the US, with growing contributions from Asia and Europe.

AgTech Valuations and Investment Trends

Graeme discusses trends in AgTech deal values and valuations, noting that the sector has remained relatively stable compared to other tech areas. He highlights that capital is flowing to stronger companies, particularly those with differentiated IP in AgTech and precision agriculture. The discussion reveals that upstream AgTech, especially crop inputs, has been more resilient than downstream segments. Graeme emphasizes the importance of understanding global benchmarks for attracting capital, as companies compete on a global scale regardless of their specific subsector.

Venture Capital Market Trends Overview

Graeme presents data on venture capital trends, highlighting that median revenue growth rates for Series A to C companies have declined but remain between 60-80% year-over-year. He notes that the median revenue required to raise a Series A has increased by 75% since 2021 to $2.5 million USD. Graeme also discusses burn rates, indicating that venture-backed companies typically burn 300% of their revenue at early stages. He emphasizes that while VC markets are tough, they remain historically strong, especially for IP-differentiated businesses, and stresses the importance of global benchmarking for attracting strong capital.

Ag Tech Innovation and Commercialization

The summary discusses Graeme's insights on agricultural innovation and investment. He emphasizes the importance of commercialization for ag tech startups, stating that the biggest challenge is commercial rather than technical. Graeme explains the Innovation Farm Network, which aims to facilitate adoption of new technologies by providing a space for entrepreneurs to test and demonstrate their innovations while allowing farmers to gain exposure in a relevant environment. He also mentions FCC's new AI tool called Root, which allows farmers to interact with and query farm data to support decision-making.

FCC's $2B Ag Innovation Fund

Graham presents information about FCC's $2 billion fund for agricultural innovation, with about half focused on IP and differentiated businesses. The fund is new money to be deployed over the next 5 years through equity investments, not grants. Graham provides examples of FCC's venture capital investments, including Cataler Bio Solutions and Precision AI. Eric announces an event on November 18th in Chatham-Kent to engage high school and university students in agricultural technology. The group discusses the importance of collaboration and suggests inviting successful entrepreneurs from non-agricultural sectors to share their experiences in future meetings.