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Food VC Peakbridge has new $187 million fund to transform the future of food, like lab-made cocoa

Climate change isn’t just about removing carbon from the atmosphere or making more fuel-efficient cars. It’s also about the food we eat.

This is the goal of PeakBridge, a global fund manager in the agri-food technology sector. It recently closed $187 million in capital commitments for its PeakBridge Growth Fund II to invest in innovation in these areas. This brings the firm’s total assets under management to more than $250 million.

PeakBridge, based in Luxembourg, is a member of the Edmond de Rothschild Private Equity partnership. The company was established by founding general partners Erich Sieber and Nadav Berger in 2020.

“We want to be ‘the bridge’ to help these 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 we now have at least five companies using AI.

Climate change is a top priority for the company, and the partners knew they couldn’t tackle the climate challenge without tackling food. When they raised the new fund, they had no difficulty convincing large institutional investors of the need.

The most recent fund exceeded the $100 million target size announced in 2022. Growth Fund II was launched with participation from global food and beverage companies including Grupo Bimbo, Royal Cosun and Arancia, and financial institutions, including 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 that these results are promising.

Peakbridge intends to invest in 16 to 20 companies, with approximately $10 million in each company. So far, eight investments have been made. These include companies like functional beverage 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,” El Khazen said. “Unlike traditional venture capital, software or biotechnology, it is not one or two companies that return the fund several times. Instead, what we see in our portfolio is that a majority of companies would return, say, two to five times the investment.

The investor adds that his portfolio has “fewer failures” compared to traditional expectations, for example, of a SaaS and software fund. “Where we see our returns, they are between two and four times per fund. This is where our portfolios trade today.

Among the new food products that Sieber and Berger say could truly change the world is lab-made chocolate.

One of their investments in the fund is Win-Win. Sieber explained that it is a cocoa substitute that is taking advantage of the huge rise in cocoa prices. Although prices have fallen slightly, the price of cocoa per metric ton reached almost $11,800 earlier this year due to heavy rains and diseases affecting the crops.

“One of the topics we are thinking about is climate change, which will cause more and more disruption in the commodities sector,” Sieber said. “We saw it with coffee and vanilla. Right now, cocoa is at an all-time high and we are seeing a real impact on the consumer. Win-Win and three or four other companies are trying to naturally produce something very similar to cocoa, with the same texture and color.

Although chocolate is one of the favorite snacks, the cocoa industry is well known for its problems with child labor and deforestation. Some companies, such as Ayana Bio, which works on cocoa extracts rich in polyphenols, are committed to accelerating the production of cocoa bioactives through cell culture.

Other companies also play here. Planet A Foods, which raised $15.4 million earlier in 2024 to continue developing a sustainable alternative to cocoa. True Essences Food secured $27.6 million in Series B funding in late 2023 for its Flavor Symmetry technology, which uses dehydration as a technique to capture flavor, aroma and nutrition. He applies this to chocolate. Companies like California Cultured and Voyage Foods make chocolate products without cocoa. Voyage just 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 as a commodity has increased quite significantly. There is no way around applying inflation to the product. This is why we believe that using solid fermentation can be an efficient and elegant way to solve these problems.

techcrunch

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