Venture Capital firm Nordic Foodtech concludes €40 million initial funding round for its second investment fund.
In a significant move, Nordic Foodtech VC has announced the first close of its second fund, aiming to raise a total of €80 million. The fund, with a base in Helsinki and Copenhagen, is poised to invest in pre-seed and seed-stage companies developing new technologies that address challenges within the food system, with a particular focus on resource efficiency.
Louise Heiberg, partner at Nordic Foodtech VC, acknowledged the challenges of fundraising amidst a downturn in venture capital investments, but expressed optimism about the fund's prospects for growth, bolstered by statements of support from investors like Peter Platan, Investment Director at Tesi, who highlighted Nordic Foodtech VC's excellent growth potential.
The fund's focus areas include circularity and upcycling, enabling technologies, sustainable ingredients, and B2B models. In the realm of circularity and upcycling, the fund is interested in technologies that transform side streams and waste into high-value ingredients, contributing to a resilient, resource-efficient food system.
Nordic Foodtech VC also seeks deep tech solutions that can improve production efficiency and reduce costs, such as bioprocess optimization, innovative bioreactor designs, and retrofitting existing infrastructure to increase capacity without substantial capital outlay.
The fund's interest extends to sustainable ingredients, encompassing biotechnology-based solutions and alternative protein sources. As many foodtech companies are transitioning towards B2B models, the fund also recognises the potential for these models to provide more stable revenues compared to consumer-facing businesses.
Although specific companies that will receive investments from the second fund have not been disclosed, the fund's focus on resource efficiency and innovation in the food system suggests it will target startups with novel solutions in these areas.
Nordic Foodtech VC has a reserve for any "significant follow-on investments" and plans to lead early seed and pre-seed rounds in the Nordics and Baltics, while co-investing elsewhere in Europe. The fund is supported by a range of Finland-based institutional backers, including Tesi, Elo Mutual Pension Insurance Company, Valio Pension Fund, and Valio's food and drinks group Heino Group.
Lauri Reuter, partner at Nordic Foodtech VC, emphasised the team's ability to spot startups solving tangible problems, thanks to their experience and expertise. The fund's first close of €40 million is a promising step towards its goal of creating a more resource-efficient food system through innovative technologies and sustainable practices.
- The new fund, focused on resource efficiency in the food system, plans to leverage blended finance, venturing into partnering with traditional financial institutions to support innovative startups in areas such as financial inclusion, promoting access to capital for businesses working towards biodiversity conservation and sustainable food production.
- With a focus on deep tech solutions that improve production efficiency and reduce costs, the second fund is also keen on investing in technological innovations that can address challenges in the food system, like bioprocess optimization, biotechnology-based sustainable ingredients, and technologies that transform waste into high-value resources – all for the ultimate goal of a resilient, resource-efficient food system.
