Climate change isn’t just about removing carbon from the atmosphere or making more fuel-efficient cars. It also concerns the food we eat.
This is the focus PeakBridge, a global fund manager in the agri-food sector. It recently closed on $187 million in capital commitments for the PeakBridge Growth Fund II to invest in innovation in these areas. This brings the firm’s total assets under management to over $250 million.
PeakBridge, based in Luxembourg, is a member of the Edmond de Rothschild Private Equity partnership. The company was started by founding partners Erich Sieber and Nadav Berger in 2020.
“We want to be ‘the bridge’ helping these entrepreneurs get to the ‘edge,'” Berger told TechCrunch. “We can also act as a bridge between the old food industry and the new technology. We also started investing in AI and food, and now we have at least five companies using AI.”
Climate change is one of the company’s goals, and the partners knew they couldn’t tackle the climate challenge without dealing with food. When raising the new fund, they had no problem convincing the largest institutional investors of the need.
The most recent fund exceeded its target size of $100 million announced in 2022. Growth Fund II was launched with the participation of global food and beverage companies, including Grupo Bimbo, Royal Cosun and Arancia, and financial institutions, including the Builder’s Initiative.
In terms of returns, partner Nadim El Khazen told TechCrunch that PeakBridge’s funds are just starting to see early results, but those results are promising.
Peakbridge plans to invest in 16 to 20 companies, with about $10 million in each company. He has made eight investments so far. These include companies like functional drinks startup Odyssey, animal-free dairy startup Standing Ovation, and Vow, which has made some interesting cultured meat products, including more exotic meats.
“We started investing in 2020, so we are currently working on the first exits of our funds,” said El Khazen. “Unlike conventional VCs and software or biotech, it’s not one or two companies that return the capital many times over. “In contrast, what we see in our portfolio is that the majority of companies would return, say, two to five times the investment.”
The investor adds that his portfolio has “fewer failures” compared to the classic expectations of, say, a SaaS and software fund. “Where we see our returns are: two to four times per fund. This is where our portfolios are traded today.”
Among the new food products that Sieber and Berger believe could truly change the world is laboratory 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 rise in cocoa prices. Although prices have dropped a bit, the price of cocoa per metric ton reached nearly $11,800 earlier this year due to heavy rains and diseases affecting crops.
“One of the issues we’re thinking about is climate change, which will have more and more disruptions to commodities,” Sieber said. “We saw it with coffee and vanilla. Right now, cocoa is at an all-time high and we’re seeing a real impact on the consumer. Win-Win and three or four other companies are trying to produce something very similar to cocoa with the same texture and color of course.”
Despite the fact that chocolate is a favorite snack, the cocoa industry is known for this child labour and deforestation issues. Some companies, such as Ayana Bio, which works on high-polyphenol cocoa extracts, have bound to accelerate the production of cocoa bioactive substances through cell culture.
This is where other companies come into play. Planet A Foods, which raised $15.4 million earlier in 2024 to continue developing a sustainable alternative to cocoa. True Essences Food guaranteed $27.6 million in Series B funding in late 2023 for flavor symmetry technology, which uses dehydration as a technique to capture taste, aroma and nutrition. We apply it to the chocolate. Companies such as California Cultured and Voyage Foods produce cocoa-free chocolate products. Travel alone raised $52 million Last week.
“What’s interesting is that the big chocolate companies, because of the price of cocoa, are replacing it with sugar,” El Khazen said. “Now even sugar has also gone up quite significantly in terms of prices as a commodity. There is no way to avoid applying inflation to the product. That’s why we think using solid-state fermentation can be a nice and elegant way to solve these difficulties.”
