Fledgling food-ag venture firm raises $28M fund

A new Carmel venture-capital firm focused on food and agriculture has closed its first fund with $27.8 million, including $15 million from Indiana investors.

IN Partners LLC announced the landmark yesterday but continues to raise money.

Ron Meeusen, a co-founder and managing partner, said IN Partners is one of only a handful of venture firms working in the industry – a segment easy to misunderstand as limited to farm fields and slaughterhouses.

The firm will target companies operating in food safety, animal health, environmental technologies, production technologies and bio-based products and processes.

For example, Meeusen is aware of a technology that can sense contamination on a single clump of spinach within a 3,000-pound batch. Had the technology been available in 2006, it might have prevented the E. coli bacteria outbreak that claimed the lives of at least two people and sickened at least 192 others.

Meeusen’s partner is Andy Ziolkowski, who is moving to the Indianapolis area from Connecticut after working at Whitehead Associates, CS First Boston and Forest Street Capital. Both men are managing partners.

IN Partners was started in 2005 shortly after Meeusen left a post at BioCrossroads, a not-for-profit that markets life sciences in Indiana. There, he took part in a study outlining needs of the agricultural sector and discovered it had been all but overlooked by venture-capital firms.

Three firms in Boston, San Francisco and Canada invested in food and ag, but to Meeusen’s knowledge, none focused on the industries. Part of IN Partners’ strategy is to leverage its industry background to attract other venture firms to particular deals.

However, raising the first fund took twice as long as he expected, probably because of the rarity of the concept and the onset of the financial crisis. In fact, Meeusen and Ziolkowski approached all 18 investors after the stock market meltdown began in October to see if they were still interested; none backed out.

“About the only thing you can do is be persistent,” said Meeusen, who before joining BioCrossroads led an effort by Indianapolis-based Dow AgroSciences to diversify away from its traditional agricultural chemicals to genetically altered seeds.

The only investor Meeusen would identify is the first, the Indiana Finance Authority, which seeded the fund with $3 million. However, he said many of the others are household names in Indiana business circles and include institutions in both public and private sectors.

The fund also would have been difficult to get off the ground were it not for a loan to IN Partners from the state agriculture department, he added.

Meeusen and Ziolkowski have accumulated a list of 275 potential investments, mostly technologies invented at Midwestern universities. Thirty-two are in Indiana.

One deal, which is not in Indiana, will be announced soon, he said.