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August 27, 2023 | Tom Ballard

Innova Memphis seeking to reach $75 million with Fund VI

The firm recently announced a $40 million first close that will use the new monies to continue investing in FarmTech start-ups.

We reported briefly in early July that Innova Memphis had announced a $40 million first close of its Innova Ag Innovation Fund VI and will use the new monies to continue investing in FarmTech start-ups. We had the opportunity recently to learn a little more about the fund and long-term plans from Innova President and Partner Ken Woody.

“We hit the $40 million threshold pretty quickly,” he told us, adding that the ultimate goal is to reach $75 million. “We polled our LPs (limited partners) in Fund IV, and most said yes. We have 12 months to get to the final goal.”

The vast majority of those investors are Farm Credit institutions that have a specific interest in the well-being of rural communities and the agriculture sector.

Innova’s latest fund follows the launch of Fund IV which was announced a little more than six years ago (see article here). That was a $31 million fund that brought a much wider geographic and industry sector focus to Innova. Its first three funds were concentrated on Tennessee companies in healthcare, medical devices, and technology broadly defined.

In the 2017 article announcing Fund IV, Woody explained that it was completed after a little more than three years of effort and two years after earning federal approval to establish a Rural Business Investment Company under the Rural Business Investment Program (RBIP). Those are approved by the U.S. Department of Agriculture (USDA) and must concentrate on AgTech or FarmTech.

Fund IV made about 30 investments and is capped except for follow-on funding, Woody explained. “Overall, these companies are doing well,” he added.

Innova’s Fund VI is part of the same USDA program that Fund IV was, and both are designed to bring capital and infrastructure support to rural communities in the U.S. Like its predecessor, Fund VI is focused on pre-seed, seed, and early-stage start-ups addressing the evolution of agriculture through automation and digitization technologies.

“The AgTech space is going through a resurgence,” Woody says, generally in the Midwest and specifically in states like Iowa and Nebraska.

Overall, Innova Memphis has invested in about 135 start-ups since its founding.

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