Climate change is not just about reducing carbon emissions or creating more fuel-efficient vehicles; it also extends to the food we consume. PeakBridge, a global fund manager in the agri-food tech sector, is addressing this crucial aspect by investing in food innovation. The Luxembourg-based firm recently secured $187 million in capital commitments for its PeakBridge Growth Fund II, bringing its total assets under management to over $250 million.
Founded in 2020 by Erich Sieber and Nadav Berger, PeakBridge is a member of the Edmond de Rothschild Private Equity partnership. "We want to be ‘the bridge’ helping those entrepreneurs to get to the ‘peak,’” Berger explained. The firm aims to connect the traditional food industry with cutting-edge technology, including AI applications in food production.
Addressing climate change through food innovation is a core focus for PeakBridge. Recognizing that food production and consumption are integral to tackling climate challenges, the firm easily convinced larger institutional investors of the importance of their mission while raising the new fund. The latest fund exceeded its initial $100 million target, with participation from global food and beverage companies like Grupo Bimbo, Royal Cosun, and Arancia, as well as financial institutions such as Builders Initiative.
Partner Nadim El Khazen noted that while PeakBridge’s funds are just starting to see early returns, the results are promising. The firm plans to invest approximately $10 million in each of 16 to 20 companies. So far, it has made eight investments, including animal-free dairy startup Standing Ovation and cultured meat producer Vow, which has explored exotic meat products.
El Khazen highlighted that unlike conventional venture capital and biotech investments, where a few companies may return the fund multiple times, PeakBridge's portfolio companies generally offer more consistent returns, typically between two to five times the investment. This approach has led to fewer failures compared to traditional SaaS and software funds, with expected returns between two to four times per fund.
One of the transformative food products Sieber and Berger are excited about is lab-made chocolate. One investment, Win-Win, is developing a cacao replacement amidst the significant price surge of cacao, which hit nearly $11,800 per metric ton earlier this year due to climate impacts like heavy rains and crop diseases. Sieber emphasized that climate change will continue to disrupt commodity markets, making innovative alternatives essential.
The cacao industry is notorious for issues like child labor and deforestation. Companies such as Ayana Bio are pledging to accelerate cacao bioactive production through cellular cultivation. Other firms, like Planet A Foods, True Essence Food, California Cultured, and Voyage Foods, are also creating sustainable and cocoa-free chocolate alternatives. Voyage Foods recently raised $52 million for its endeavors.
El Khazen pointed out that traditional chocolate companies are increasingly replacing cacao with sugar due to rising cacao prices. However, even sugar prices have surged, prompting PeakBridge to explore solid-state fermentation as an elegant solution to these challenges.
Through these strategic investments, PeakBridge is leading the charge in transforming the food industry to combat climate change, ensuring a sustainable and innovative future for food production.
