By Lynda Kiernan, Global AgInvesting Media

Although still somewhat nascent, the growing awareness of sustainable investing reflects an increasing need that has been demonstrated by the ever-greater capital being committed to the space.

Driven by the belief that climate change and environmental degradation can be reversed through the regenerative powers of agriculture, Belgian venture capital investor Astanor Ventures is launching its largest fund yet – a $325 million agri-food tech “Global Impact Fund”. 

With plans to deploy capital across the EU and North America, the multi-stage fund will leverage its cross-sector expertise to focus on backing startups using innovative technologies to solve systemic challenges across the food, ag, and ocean ecosystems.

“There is now an urgent need for an impact investor like Astanor which is using tech and capital to bring about a revolution in food and farming,” Eric Archambeau, co-founder and partner of Astanor Ventures, told Tech Crunch.

Regenerative Nature

Agriculture, like mining, is considered a primary sector of the economy, meaning that the growth and development of other economically important sectors depend upon it. Since the 1800s, it has been an accepted notion that, like mining, farming, by its very nature, is an extractive industry. But whereas mining is obviously so, the extractive nature of farming is more nebulous – embodied in water pollution, soil degradation, erosion, and loss of fertility.

Possibly due to this acceptance, we have done a poor job in modernizing how we look at the profit and loss associated with farming. Higher crop yields and more animals, partnered with low cost of inputs, have traditionally meant higher profit. For centuries, the unaccounted losses tied to traditional extractive farming have been viewed as unavoidable, and inherent – but it need not be this way, according to the Union of Concerned Scientists, who stated that a shift from extractive to regenerative agriculture is not only possible, but profitable, when taking a more modern, learned, and complete approach to the costs and output of agricultural production.

The stakes are ever rising. In his article, Investment Resilience and Adaption to a Changing Climate, published in GAI News in April 2020, Angus Ingram, investment manager with Kilter Rural, noted, “In the lead up to its 50th gathering in Davos, Switzerland, the World Economic Forum released its annual WEF Global Risks Report 2020. For the first time, the top five risks in terms of likelihood have been occupied by environmental risks.”

One common thread is apparent – whether you are a smallholder or one of the largest agricultural producers in California, or a global investor – the shift to regenerative agriculture is a collaborative effort. And Astanor has a diverse network that includes farmers, scientists, policy makers, food experts, and well-known partners such as the Swette Center for Sustainable Food Systems at Arizona State University.

 “There is a new generation coming on board in LPs and family offices today and new funds understand the imperative this generation now raises. It’s time to stop and be counted for the future, ” said Archambeau. 

Since its founding only three years ago, Astanor Ventures has built a portfolio of more than 20 innovative startups across the U.S. and Europe that are drivers behind a new sustainable way of producing and relating to food.

Among these are Paris-based insect farming startup Ÿnsect, for which, only last month, Astanor led $224 million in funding for the company that included Robert Downey Jr.’s FootPrint Coalition; Hong Kong-based Happiness Capital; Supernova Invest; and Luxembourg-based Armat Group, who joined the original Series C investors Bpi France; Talis Capital; IdInvest; Finasucre; Bois Sauvage; and Vis Vires New Protein Capital. The round was also supported with capital committed by a bank consortium including Caisse des Dépôts, Crédit Agricole Brie Picardie, and Caisse d’Epargne Hauts-de-France, along with Arkea, Crédit Mutuel, BNP Paribas, Credit Agricole Franche Comté, and Caisse d’Epargne Normandie.

Also Infarm, a Berlin-based urban farming startup that in September of this year had a first close at $170 million for a Series C round of funding that is expected to exceed $200 million. 

And Apeel Sciences, in which Astanor together with Temasek invested $30 million in October of this year, bringing total funding for the company to $280 million. 

Noted as a World Economic Forum Technology Pioneer, a CNBC Disruptor 50, and recognized as one of TIME Magazine’s Best Inventions and among Fast Company’s World Changing Ideas, Apeel Sciences has developed a method for extracting molecules from organic agricultural waste and byproducts – such as grape skins that remain after wine production processing or banana peels, leaves, or stems left over after harvesting – to create undetectable edible barriers derived from natural plant extracts. 

These barriers significantly slow the process of decay of fresh produce, making each piece of fruit its own microclimate and extending shelf life without refrigeration, a controlled atmosphere, or preservatives.

As climate change intensifies, the need for and demand for greater sustainability continues to grow. And as conditions become more complex – and the pandemic brings to light how critical it is to care for the planet and its people – impact investing, regenerative agriculture, circular economies, traceability, and sustainability are increasingly important  – but not mutually exclusive to profit.

 

 – Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.