- Bonaventure Equity raises $30M to bet on life science startups in the cannabis industry.
- Founder Ross O’Brien says startups fall into three categories: agri-tech, biotech and healthcare.
- The fund will also look at investments in the emerging psychedelics space.
As more jurisdictions around the world legalize cannabis, a number of life science startups have sprung up to support the burgeoning industry – and those startups are hungry for investors.
This is the bet made by Bonaventure Equity, a venture capital company. Ross O’Brien, the firm’s founder and managing partner, told Insider that he and his team are raising a $30 million fund to pursue these types of deals, focusing on seed and early stage companies. A series.
A “life science” approach to cannabis
O’Brien says he broadly defines “life sciences” to encompass three different categories: ag-tech, biotech and healthcare. The fund also assesses investments in psychedelics, which are believed to have a range of mental health benefits.
“We were very concerned about the irrational exuberance — the enthusiasm of investors — in this quote, without quotes, ‘the green rush,’” O’Brien said.
As public cannabis stocks have collapsed in recent months, venture capital investment has increased in the sector. Investors poured $2.7 billion into cannabis startups in 2021, up from $1.5 billion in 2020, according to data provider PitchBook.
Bonaventure isn’t the only venture capital firm focused on the life science side of cannabis. Óskare Capital, a new fund, is raising $170 million to invest in medical and pharmaceutical cannabis in Europe, as Insider reported.
Bonaventure’s investors will be a mix of high net worth individuals and family offices, O’Brien said. Bonaventure raised its first tranche of capital for this fund in December.
The fund will be Bonaventure’s second. Its first fund has made nine investments at the seed or Series A level since 2018, according to a filing the company shared with Insider.
These investments include startups like Leafworks, which was founded by two PhD students. holders to genetically test cannabis products and map the cannabis genome, as well as Nalu Bio, which is developing an organic synthesis method to produce cannabis compounds like CBD on a large scale.
Focus on entrepreneurs
O’Brien said he first became interested in cannabis while working in a family office more than six years ago.
“At the time, we didn’t see the maturity, sophistication and experience of the management teams that we had seen in the other sectors in which we invested,” he said.
O’Brien told Insider that he and his team, including managing partner Bill Kehoe, general counsel Nigel Austin and vice president Maggie Kelly, want to stick with investments that are a good fit with their skill sets. , particularly in healthcare, biotechnology and agricultural technology.
While O’Brien says they won’t be designing a hard firewall, that usually means avoiding mainstream cannabis brands or grow facilities to focus on what O’Brien calls “science science verticals.” cannabis life”.
As Insider reported, after Canada’s decision to federally legalize cannabis in 2018, many early investors in cannabis cultivation were burned, losing big bets on how quickly they expected it to grow. their investments increase.
As O’Brien put it, he’s looking to bet on entrepreneurs who “can look ahead and see things we can’t see.”