Friday, April 23, 2010

Venture Capital: "Selling Agriculture 2.0 to Silicon Valley"

With apologies to Grant Wood, the first thing I thought of when I saw this story a couple days ago was:

From the New York Times' Business of Green:

SILICON VALLEY’S apricot and cherry orchards disappeared decades ago, replaced by semiconductor plants and office parks populated by technologists. Now some of the Valley’s most prominent venture capitalists are looking to the region’s roots for what could be the next new thing in an old business: agriculture.

“Sustainable agriculture is a space that looks as big or bigger than clean tech,” said Paul Matteucci, a venture capitalist with U.S. Venture Partners in Menlo Park, Calif. “Historically, we have not seen a ton of entrepreneurial activity in agriculture, but we are beginning to see it now, and the opportunities are huge.”

A catch-all phrase for environmentally beneficial farming, sustainable agriculture has long been the province of organic enthusiasts. But venture capitalists say a growing awareness of conventional agriculture’s contribution to climate change and concerns over its consumption of water and energy are creating markets for technological innovation to minimize those effects.

The Johnny Appleseed of what is being called Agriculture 2.0 is a 33-year-old former Wall Street investment banker named Janine Yorio. Her New York firm, NewSeed Advisors, brings together sustainable agriculture entrepreneurs and investors.

At the Four Seasons hotel in East Palo Alto, Calif., last month, NewSeed Advisors attracted a crowd of well-dressed investors from some of Silicon Valley’s top venture capital firms. They packed a ballroom to hear entrepreneurs pitch start-ups developing everything from nontoxic pesticides and analytical tools for soil analysis to indoor urban farming systems.

“If you’re interested in investing in energy and water, you become interested in investing in agriculture,” said Amol Deshpande, a venture partner at Kleiner Perkins Caufield & Byers, who attended the conference. “A lot of ag opportunities are going to be driven by water, it’s availability and cleanliness.”>>>MORE