Climate change is not only about removing carbon dioxide from the atmosphere or creating more fuel-efficient cars. It’s also about the food we eat.
This is what we focus on Peak Bridge, a global fund manager in the agri-food technology sector. It recently accomplished a $187 million capital commitment to PeakBridge Growth Fund II to speculate in innovation in these areas. This brings the company’s total assets under management to over $250 million.
Luxembourg-based PeakBridge is a member of the private equity firm Edmond de Rothschild. The company was founded by founding general partners Erich Sieber and Nadav Berger in 2020.
“We want to be the ‘bridge’ that helps entrepreneurs get to the ‘top,'” Berger told TechCrunch. “We can also serve as a bridge between the old food industry and new technology. We also started investing in AI and food and now have at least five companies using AI.”
The company is focused on climate change, and the partners knew they couldn’t address the climate challenge without addressing food. When raising a new fund, that they had no difficulty convincing larger institutional investors of the need.
The latest fund exceeded its goal size of $100 million announced in 2022. Growth Fund II was created with the participation of global firms from the food industry, including Grupo Bimbo, Royal Cosun and Arancia, in addition to financial institutions, including Builders Initiative.
In terms of returns, partner Nadim El Khazen told TechCrunch that PeakBridge funds are just beginning to see early results, but those results are promising.
PeakBridge intends to speculate in 16 to twenty firms, with roughly $10 million in each company. So far, it has accomplished eight investments. These include firms resembling animal-free dairy startup Standing Ovation and Vow, which has produced some interesting cultured meat products, including more exotic meats.
“We started investing in 2020, so we are currently working on the first exits from our funds,” El Khazen said. “Unlike conventional VC and software or biotech, it’s not one or two companies that return the fund multiple times. Instead, in our portfolio we see that most companies would return, say, two to five times the investment.”
The investor adds that there are “fewer failures” in his portfolio in comparison with the classic expectations of, say, a SaaS and software fund. “We see our returns being: two to four times per fund. This is where our portfolios are trading today.”
Among the new foods that Sieber and Berger consider could truly change the world is laboratory-made chocolate.
One of their investments from the fund is in Win-Win. Sieber explained that it is a cocoa substitute that takes advantage of the huge increase in cocoa prices. Although prices have dropped barely, the so-called cocoa price per metric ton reached almost $11,800 earlier this yr as a result of heavy rains and diseases attacking crops.
“One of the topics we’re thinking about is climate change, which is going to cause more and more disruptions to the supply of goods,” Sieber said. “We’ve seen it with coffee and vanilla. Today, cocoa consumption is at an all-time high and we are seeing a real impact on consumers. Win-Win and three or 4 other firms are trying to supply something very just like cocoa, with the same texture and natural color.
Even though chocolate is a favorite snack, the cocoa industry is well-known child labor AND defectRstation issues. Some firms, resembling Ayana Bio, which works on high-polyphenol cocoa extracts, do he promissed to speed up the production of cocoa’s bioactive ingredients through cell culture.
Other firms are playing here too. Planet A Foods, which raised $15.4 million in early 2024, continues to work on a sustainable alternative to cocoa. True Essence Food Safe $27.6 million in Series B financing in late 2023 for its Flavor Symmetry Technology, which uses dehydration as a technique to capture flavor, aroma and dietary value. This applies to chocolate. Companies resembling California Cultured and Voyage Foods produce cocoa-free chocolate products. Just a journey raised $52 million last week.
“Interestingly, large chocolate companies are replacing it with sugar due to the price of cocoa,” said El Khazen. “Now even sugar as a commodity has increased significantly in terms of price. There is no approach to essentially apply inflation to a product. Therefore, we consider that solid-state fermentation could also be a good and elegant approach to solve these problems.