US-based venture capital firm DCVC Bio is understood to have already made a first close of its debut fund at nearly half its $250m target, with the remainder expected to be committed this year.
Kirsten Stead and John Hamer of Monsanto Growth Ventures (MGV), the strategic investment arm of agribusiness Monsanto, which is being acquired by Germany-based peer Bayer, will co-manage the expected $250m fund, which is run by a new management company for the biotech space and affiliated with venture capital firm Data Collective (DCVC).
Hamer and Stead will be joined on the fund by two other general partners, Zachary Bogue and Matthew Ocko, Data Collective’s co-founders and managing partners whose past and present portfolio companies include social media company Facebook, ride hailing platform Uber, digital payment technology provider Square, mobile game producer Zynga and domain name provider VeriSign.
US-based DCVC concentrates on investments in seed and series A-stage companies looking to apply technologies such as deep computing, big data and IT infrastructure to large traditional industries and MGV had been one of its limited partners (LP).
The new fund in question, DCVC Bio’s, focus will be on companies that fuse artificial intelligence with biotechnology. Its LPs in its first close include an undisclosed strategic from the pharmaceutical industry and due to the strong relationship between Hamer and Stead and the Monsanto/Bayer organisation it is understood the latter could also try and commit in the second close.
However, Monsanto is understood to want to maintain its interests in the remaining 11 companies in the MGV portfolio, which could limit its capital to allocate to a new fund.
Monsanto had already received about 95% of the capital it had invested in MGV’s portfolio through half a dozen exits, including the parent buying two of them, at about a 26% annual rate of return.
Although Hamer and Stead handed their notices in on 13 April, both are staying for three months to help manage these portfolio companies and find their replacements, a hiring process being led by Bob McCarroll, who will be leading venture activities at Monsanto and likely post the merger.
Although Hamer was unable to discuss fundraising, he said: “Our success was because at a company like Monsanto they want to be first, are willing to place bets and are efficient in how to get things done rather than block them. I am pretty excited by our great pipeline of deals we already have.”
As Global Corporate Venturing reported in March, the third member of MGV, Ryan Rakestraw, moved to take an associate director position at Singapore state-backed investment firm Temsasek.
At the time, Rakestraw said Temasek has had an existing agriculture business area for some time but the venture capital investment aspect was new.