Climate change isn't just about removing carbon from the atmosphere or building more fuel-efficient cars. It also concerns the food we eat.
This is the focus of Peak Bridge, a global fund manager in the agri-food tech sector. The company recently completed his $187 million capital commitment to PeakBridge Growth Fund II to invest in innovation in these areas. This will bring the company's total assets under management to over $250 million.
Luxembourg-based PeakBridge is a member of the Edmond de Rothschild Private Equity Partnership. The company was founded in 2020 by general partners Eric Seaver and Nadav Berger.
“We want to be a bridge for entrepreneurs to reach the top,” Berger told TechCrunch. “We can also act as a bridge between the old food industry and new technologies. We have also started investing in AI and food, and now at least five of his companies are using AI. ”
Climate change is a focus for the company, and the partners recognized that they could not tackle the problem of climate change without addressing food. When raising new capital, they had no trouble convincing large institutional investors of the need.
The latest fund exceeded its announced target size of $100 million in 2022. Growth Fund II was launched with the participation of global food and beverage companies such as Grupo Bimbo, Royal Cosun and Arancia, as well as financial institutions such as Builder's Initiative.
As for returns, partner Nadim El Khazen told TechCrunch that PeakBridge's funds are just starting to see early results, but the results are promising.
PeakBridge plans to invest approximately $10 million in 16 to 20 companies each. So far, we have made 8 investments. These companies include Odyssey, a functional beverage startup, Standing Ovation, a non-animal dairy startup, and Vau, which is developing some interesting cultured meat products, including exotic meats. Includes companies.
“We started investing in 2020, so we are currently working on our first exit from the fund,” El Kazen said. “Unlike traditional VC or software or biotech, it's not just one or two companies that pay back their money multiple times. Rather, what we see in our portfolio is that the vast majority of companies, e.g. It will return you 2 to 5 times more.”
The investor added that the company's portfolio has “fewer failures” compared to the classic expectations of, say, a SaaS or software fund. “The returns we're seeing are 2x to 4x per fund. This is where our portfolio trades today.”
Among the new foods that Seaver and Berger believe could truly change the world is lab-grown chocolate.
One of the investments from the fund is a win-win. Mr. Seaver explained that this is a cocoa alternative that takes advantage of the huge rise in cocoa prices. Although prices have fallen slightly, heavy rains and diseases affecting the crop pushed cocoa prices to nearly $11,800 per tonne earlier this year.
“One of the themes we're thinking about is climate change, which is going to cause more and more disruption to primary products,” Seaver said. “We saw it with coffee and vanilla. Cocoa is currently at an all-time high, which has a huge impact on consumers. Win-Win and three or four other companies are We are trying to produce products that are very similar and naturally have the same texture and color.”
Despite chocolate being a popular snack, the cocoa industry is well known for its problems with child labor and deforestation. Some companies, such as Ayana Bio, which develops high-polyphenol cocoa extracts, promise to accelerate the production of cocoa bioactives through cell culture.
Other companies are also playing here. Planet A Foods raised $15.4 million in early 2024 to continue developing sustainable alternatives to cocoa. True Essences Food has secured his $27.6 million in Series B funding in late 2023 for its flavor symmetry technology, which uses dehydration as a technology to capture flavor, aroma, and nutrients. We apply this to chocolate. Companies such as California Cultured and Voyage Foods produce cocoa-free chocolate products. Voyage just raised $52 million last week.
“What's interesting is that the big chocolate companies are trying to replace cocoa with sugar because of the price of cocoa,” El Kazen said. “Right now, the price of even sugar as a commodity has increased significantly. There is basically no way to avoid applying inflation to the product. This is why the use of solid-state fermentation is a great way to solve these predicaments. That's why we think it's a good and elegant way to do it.”