Tundra Capital is targeting USD 120m for its second fund focused on food, agriculture and water technology, having expanded the mandate from Australia to global with an Asia emphasis.

Tundra, formerly known as Mandalay Venture Partners, raised AUD 35m (USD 25m) for its debut early-stage fund in 2022, which was structured as an Australian venture capital limited partnership, explained Mark Gustowski, a managing partner at the Brisbane-based firm. While this offers tax incentives, it also caps investments outside of Australia at 20% of the corpus.

“We only do 4-5 deals a year, but we are looking at 600-800 opportunities, and there is a lot more coming out of Asia and MENA,” he said.

Gustowski and Timothy Hui, his fellow managing partner, started out running start-up funds for Queensland University of Technology. This local connection continued through Tundra’s first fund with Queensland Investment Corporation (QIC) participating as an anchor LP.

It was the first commitment to a Queensland-based manager and to date the only one to an agriculture fund made by QIC’s venture capital programme, according to Gustowski.

Fund I had two other anchor LPs, Australian insurer NRMA and the parent company of Segi Fresh, one of Malaysia’s largest fresh produce retailers. “Their flagship store turns over 1.5 tons of fresh seafood per day. Biosecurity and cost efficiency are important to them, and they are attracted by what Australia can offer in these areas,” Gustowski said.

This is indicative of the interest Tundra claims to be receiving from strategic investors, family offices, and high net worth individuals across the region. To build ties with these groups – as well as to support deal sourcing and portfolio management – the firm may establish a base in Hong Kong or Singapore prior to launching Fund II in 4Q26.

Tundra’s basic pitch is that it invests in technology solutions that help sustainably feed the world’s growing population. This has become an escalating strategic priority against a backdrop of climate volatility and geopolitical instability.

“What’s happening in the Middle East reminds people of the fragility of supply chains,” Gustowski said. “Fuel shortages are a big issue for logistics.”

Tundra’s strategy sits at the intersection of innovation, food security, and sustainability. Investments involve technological transformation of three broad areas: upstream, where the focus is on agricultural productivity; midstream, or the journey from farm to consumer; and downstream, which involves how food is purchased, prepared, and eaten.

Upstream investments in Fund I include Agscent, a diagnostics start-up that has developed a device capable of detecting pregnancy and disease from an animal’s breath, and Nybro, which can splice bovine embryos at scale, making in vitro fertilisation more affordable and accessible.

The midstream segment features Naturo, a pasteurisation technology specialist, and Ful Foods, which produces blue food colouring derived from spirulina as a replacement for petrochemical-based options. Meanwhile, the standout downstream investment is Restoke, a software-as-a-service (SaaS) platform for restaurant management.

Since Tundra’s investment in Nybro in September 2024, the company has raised a further AUD 18m in equity funding from the likes of Tenacious Ventures, AgriZeroNZ, and the Gates Foundation. This is in addition to grants from state and federal governments.

Nybro is also typical of Tundra’s founder profile. After a first career in pharmaceuticals and biotechnology, Euan Murdoch moved to a cattle station in southeast Queensland where he oversaw breakthroughs in artificial breeding. Nybro is the culmination of a 15-year project.

“Most of the founders we work with are in their mid-40s to early 50s. They have identified a problem through their personal engagement and come up with a technology to address it,” said Gustowski.

Tundra claims to have brought in AUD 4.8 of syndicated co-investment for every AUD 1 it has put to work, with larger generalist investors often following it into rounds. Exits are most likely to come through sales to mid-market private equity firms and strategic investors rather than IPOs.

“There is no power-law effect in agtech. We take more of a PE-style approach – sector expertise, hands-on portfolio management, moderate mid-market exits, low loss rates, and a more balanced return profile,” said Gustowski.

Even at this relatively early stage, there are ambitions to look beyond venture capital in serving agrifood tech start-ups. The opportunity came into focus when Ful Foods resorted to equity funding to support working capital, having been knocked back by banks that often only lend to agriculture businesses when land is available as security.

“We would like to be a more diversified alternatives manager that can leverage the entire structure,” said Hui. “We are looking at credit, venture debt, secondaries, and private equity.”