Agriculture VCs Seek $200M Fund II

Farm and Farmhouse

Cultivation Cultivian Sandbox Venture Partners isn’t your typical VC operation. For one, with partners in Chicago and Indiana, it’s quite a distance from the West and East Coast venture capital hubs.  For another, with a focus on agricultural technology, Cultivian’s partners are targeting a sector that has historically attracted only a tiny portion of VC dollars.

Yet the firm has made some progress cultivating limited partners’ interest, with an exit under its belt and another portfolio company in registration for an IPO. This week, partners disclosed in a securities filing that they also have raised $58 million toward a planned $200 million fund, Cultivian Sandbox Food & Agriculture Fund II.

The fund brings together expertise from two venture investors: Cultivian Ventures and Sandbox Industries. Cultivian, based in Carmel, Indiana is an agriculture-focused venture firm founded in 2008 by Ron Meeusen, a former biotech research executive, and Andrew Ziolkowski, a banker and life science investor. First operating under the name MidPoint Food & Ag Fund, the two raised about $28 million for their first fund to invest in such areas as animal health, food safety, pest control and biomass-based fuel.

Sandbox, based in Chicago, builds businesses internally through an incubator program and also makes external investments, mostly at the early stage. The firm makes these investments out of an $18.8 million fund, according to its website. In addition to agriculture, Sandbox is heavily involved in healthcare. The firm invests in emerging companies deemed of strategic relevance to the Blue Cross and Blue Shield Association through a pair of dedicated funds.

The filing for Cultivian Sandbox Food & Agriculture Fund II lists Cultivian’s Meeusen and Andrew Ziolkowski as executive officers, along with Sandbox managing directors Matt Downs, Bob Shapiro, and Steve Engelberg.

The Sandbox website lists five companies in which Cultivian Sandbox has invested. At least one has exited: Divergence, a developer of genomic methods for controlling crop-attacking parasitic nematodes, sold to Monsanto in 2011. Other portfolio companies include AquaSpy, a developer of underground soil moisture sensors, Allylix, a developer of renewable chemicals products, and Environmental Operating Solutions, a provider of wastewater treatment chemicals.  Another portfolio company, Aratana, a provider of veterinary drugs, is in registration for a planned $55 million IPO. Cultivation owns an 8.6% pre-IPO stake in the company.

Photo courtesy of Shutterstock.

Story has been corrected so that the firm name is spelled Cultivian, not Cultivation.