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New VC is watering Israel’s ‘smart gardens’

Posted By Karin Kloosterman On November 17, 2011 @ 12:00 am In | No Comments

Seeking startups offering solutions in agro-tech niche, AquAgro II encourages water- and energy-saving ideas to feed the world.

 

Investment companies in Israel have diversified to include green technology investments in their portfolios, but few firms focus solely on accelerating the growth of green technologies in the Holy Land. Israel Cleantech Ventures has funded startups such as the electric car network Better Place and solar energy installation innovator Tigo Energy.

Taking a decidedly targeted focus in this direction, the fund AquAgro recently launched a new investment fund called AquAgro II.

It builds on the success and interest of its first fund, which has invested some $50 million on Israeli clean-tech such as reverse osmosis pioneer Kinrot Technology Ventures, seed gene technology company Evogene and Transbiodiesel in the past three years.

AquAgro’s fund seeks to fill a green-tech niche called “agro-tech” or “smart agro-bio.”

Water, energy and food

“We see the fundamental needs in the world, which are really water, energy and food,” says Hillel Milo, the managing partner of AquAgro I and II.

“If there is a strategic niche between one of our investors, it is a mutual benefit, but not a factor in why we decided to invest in food and smart agriculture. We decided to do so because there is a fundamental need,” he stresses to ISRAEL21c.

AquAgro II is actively seeking early-stage investors who share the same vision.

Milo says he choose green technology because he wants to be ahead of the curve: “I have as much concern for the environment as I would say the advocacy people do, but my approach to life is to come up with practical solutions,” the venture capitalist says. “I chose to be one of the first to put together a clean tech fund. I certainly want to be in that position ahead of the curve in making investments.”

He expects that AquAgro II will nurture a small portfolio of about 10 to 12 companies based on the same model as the first fund, which was formed by Gaon Agro Industries of Israel and AquAgro GbRof Germany and Ainsbury Properties of the UK, with the fund managers Milo and Nir Belzer leading the way.

Issues for the earth

Milo says that the aim of the fund is to tackle pressing environmental issues through sophisticated farming practices that consume less water and energy.

Based in Tel Aviv, the lean team at AquAgro will also be scouting for non-Israeli companies, and have earmarked one-third of future funds for outsiders. They reason that the fund can certainly be attractive to foreigners who recognize the investment appeal in Israel’s burgeoning clean-tech industry.

In fact, a new report from a Washington-based think tank determined that in terms of potential, along with Germany, Sweden and Denmark, Israel is a top-four deliverer on investment in clean-tech circles.

Investors are attracted to the high-quality deal flow, says Milo, who believes in a hands-on approach to companies the fund fuels with financing.

“Israel is becoming a center for clean-tech in water, energy and smart agriculture,” says Milo. “Their interests,” he says, referring to investors who want to enter the funding platform, “are very similar to ours: a return on investment.”

Rather than activism, Milo chose green investment. He thinks that many sectors combined can help humanity build the right path to sustainability. In the end, after all, it is business that builds standards and tools for greener technologies.


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