Venture capital investor Arlene Dickinson is raising a new growth-equity fund that will back Canadian agriculture and food companies expanding in Southeast Asia. Farm Credit Canada is the fund’s lead investor, with a $150-million commitment. 

Dickinson, who will serve as general partner, is in discussions with other domestic and international investors to raise the remaining $350 million. 

The fund, called Velocity Agri-Capital, will back middle-market companies, investing in about 12 firms, with initial cheques of at least $25 million. It will target companies spanning the agriculture and food sector. That could include firms growing food through vertical farming, or aquaculture, for example, or those processing and packaging food.

The fund will operate separately from District Ventures Capital, a VC fund Dickinson launched in 2016. District invests smaller amounts in earlier-stage consumer companies, primarily in food, beverage, health and wellness and beauty. Its portfolio includes Balzac’s Coffee Roasters, Pocketpills, Chickapea and Province Apothecary. District closed its first fund at $100 million in 2020, with backing from Farm Credit Canada, BDC Capital and family offices, among others. 

Velocity aims to fill a later-stage financing gap that Dickinson says has stunted growth in Canada’s agriculture and food sectors. She says Canada has prioritized exporting commodities in the farming sector, while investing too little in the processing and manufacturing needed to turn them into higher-value products at home. 

“We have focused on shipping grains and cereals and ingredients to other nations, who then take those ingredients and products, commoditize them and ship them back to us,” she told The Logic.

In a June report, Farm Credit Canada estimated the country’s GDP could gain $40 billion over the next decade and create 217,000 jobs if the food and beverage manufacturing sector grew three per cent each year. The Crown corporation said achieving that growth would require more investment, and improvements in infrastructure, skills and trade. “It’s ambitious,” said Dickinson, “but absolutely doable.” 

Dickinson, a longtime investor on CBC’s Dragon’s Den, has become a vocal proponent of strengthening Canada’s economic sovereignty. She has argued that the country needs to reduce its dependence on the U.S. by making and processing more products in Canada and diversifying export markets. That’s especially true in the food sector, she said. “We can’t talk about diversifying our economy if we don’t actually create the ways for businesses to export into other markets besides the U.S.,” she said. “This fund is doing just that.”

The new fund will invest specifically in Canadian companies scaling their operations in Southeast Asia. It will also consider backing Southeast Asian companies that set up business in Canada and create jobs in the country. Velocity will have people working in Southeast Asia to help portfolio companies build relationships and enter new markets. Dickinson cited the region’s size, its growing food-security needs and Canada’s existing trade agreements as reasons for the focus.

The launch comes as government leaders, CEOs and investors from around the world arrive in Toronto for the first Canada Investment Summit. Ottawa hopes to use the venue to attract huge sums of private capital to Canada as it seeks to reduce the country’s reliance on the U.S. 

Dickinson said agriculture should be part of the conversations happening at the summit. “Agriculture needs to be more front and center in terms of the investment opportunity it represents,” she said. “It is fundamental to our existence and it’s been taken for granted and overlooked.”