Green Queen founder Sonalie Figueiras recently chatted with Louisa Burwood-Taylor, AgFunder’s Head of Media & Research, about what makes an interesting story, covering portfolio company competitors, the rise of angel investing, and whether or not hype is a good thing.
What started out as a newsletter a decade ago is now a US$150+ million agri-food-tech investment business with tickets in some of the world’s most exciting startups, from Juicy Marbles to Nobell to Supplant. And while many VCs focus on building out robust due diligence teams, at AgFunder, the prevailing mantra is ‘content is king’. So how exactly do they do it? Louisa Burwood-Taylor shared some insights.
*This article is edited for length and clarity.
GQ: As Head of Media at AgFunder, how do you decide what content to cover?
LBT: Well, it’s been quite a journey on this front because in the early days I would have said anything and everything related to agtech and foodtech.
But the industry has grown exponentially since I started covering agriculture in 2013; now we have to be a bit more careful with what we choose to cover and how we cover it with our limited resources, but also because there are so many other great news outlets around now covering, for instance, the funding announcements that there’s no point us publishing duplicate content.
We introduced some new story formats to allow us to cover big, breaking news, even if not that in-depth, but ideally we want to be adding as much value to our readers as possible with more research and analysis-based pieces that can draw on our deep knowledge and experience of this industry today.
GQ: What makes for an interesting story to you?
LBT: I love in-depth tech pieces about how companies decided to build out their tech platforms, maybe they pivot in some way, and how they build relevant business models for their customers; the latter has been—and still is—a big question mark for many farmtech plays, especially in the software space. Who should be paying? Who is the actual customer? Because it turns out that for many digital ag tools it’s not actually the farmer.
Obviously, massive funding rounds are exciting to cover but since there are so many outlets covering them these days, we try to take a fresh angle or dig into the use of proceeds. And anything related to the hype around categories.
[Y]ou and I have talked about the lack of nuance in many categories of foodtech and agtech before—the intersection of a seriously complex industry with venture capital can cause entrepreneurs to oversimplify the problems they’re trying to solve and the solutions they’re presenting, as they try to raise as much money as possible with a clear message on how investors will get returns. I get it; but it could ultimately lead to some catastrophic failures where real traction never catch up to valuations—some believe we might start to see this in indoor agriculture for example.
So, making sure we add some realism to the conversation is key, as well as holding companies to account; our colleague Jenn Marston is doing a fantastic job tracking the various corporate commitments made around carbon and regenerative ag, for example.
GQ: Are there ethical walls between you and the investment team?
LBT: Yes, we have pretty strict ethical walls. The editorial team will only find out about an investment after it’s closed and then we will cover it as we do other funding announcements, with full and clear disclaimers that these are portfolio companies of AFN’s parent company AgFunder.
GQ: Would you cover portfolio companies’ competitors?
LBT: Absolutely! We’re a team of professional, experienced journalists and if something is newsworthy we go after it. That doesn’t mean the investment team will be happy about it, but they understand we need to maintain our integrity and fairly cover the industry as much as we can.
To be honest, we also totally lose track of AgFunder’s portfolio since they’re making so many investments over there. In our annual report, we recorded 22 unique company investments last year and that was apparently a slow year as they raised their fund! So often it’s news to us when we find out a company is in the portfolio.
GQ: What is the role of a dedicated/niche media in an ecosystem?
LBT: Education, awareness, intelligence—and nuance.
GQ: How much does hype play into the VC game? Is hype a good thing?
LBT: I jumped the gun and already spoke a bit to this above, probably because it’s the elephant in the room for some agrifoodtech sectors. It’s really hard to say good vs bad, however; you’re always going to get some hype and some hype can be warranted.
The problem comes, especially in our relatively nascent industry, when you have new investors jumping on a bandwagon without truly understanding the sector yet (and again, agrifood is highly complex and unlike any other industry) and pushing valuations to unrealistic levels.
We’re seeing a lot of this in alternative protein right now and it makes increasing numbers of startups un-investable for the more disciplined, and dedicated agrifoodtech investors. Without their knowledge and expertise, arguably startups could go down the wrong path and that’s where you might start to see some big failures. When the failures come, the newer money into the space then leaves, and that’s no go for anyone.
While agrifoodtech startups raised over $50 billion in funding last year, it’s still underweight compared to its contribution to GDP, not to mention the massive climate and supply chain-related issues the industry is facing today.
GQ: What do you make of the rise of angel investing and the democratization of investing?
LBT: I’m always in favor of democratization of anything! I’m not sure it’s that new; AngelList has been around for a while—and crowdfunding platforms. It’s actually been an interesting journey for the latter because at one point crowdfunding was almost a dirty word; the implication was if you had to go the crowdfunding route it was because you were desperate and couldn’t get funding from real investors, however, it’s proven to make a lot of sense for food products trying to create a brand but also for agtech startups wanting to get farmers invested in their idea.
With so many complaints from farmers that entrepreneurs are not building tools for them that they actually want or need, bringing them into the journey from the early days is an awesome idea.
I’ve actually never dug into how that ends up influencing the direction a startup takes (great story idea there!) but I can’t imagine it’s a negative, even if the crazy big CAP table is a bit of a mess!
But in short, I think everyone should have an opportunity to benefit—and I mean make money—from the growth of any industry. For too long this has been the preserve—or the pleasure, you could say—of the ultra-wealthy or large corporations and firms. There are of course concerns about the risks for smaller investors, which is why there are limits put in place about who can make venture investments.
GQ: Are a lot of your readers investors?
LBT: Our audience is predominantly made up of entrepreneurs, investors, and agrifood execs, but we do also have a significant number of farmers reading us, government bodies, NGOs, and anyone interested in the future of food!
GQ: Do you get a lot of investment tips from readers?
LBT: I’m not sure I ever have actually! But we love getting feedback from our readers and find they are pretty engaged. We’re always open to chat!
GQ: What are some of your predictions for the sector?
LBT: Food-as-medicine and personalized nutrition. Without wanting to promote the AgFunder portfolio too much, we do have two fantastic companies in this space that I’m very excited about: Faeth Therapeutics is discovering how different foods can aid in the treatment of cancer—mind-blowing!—and BrightSeed is discovering phytonutrients in crops that can combat chronic disease like diabetes.
Correction: This interview was updated to reflect AgFunder’s current total AUM of $150+ million, instead of the previously mentioned $90 million.
Lead photo courtesy of Louisa Burwood-Taylor.