Pete Oberle, managing partner of Trailhead Capital, shares about his journey into investing and the latest investments they have made. Among them there is a regenerative cultivated lab-grown meat company.
LISTEN TO THE CONVERSATION ON:
IMPACT AND RETURNS
There’s so much to do that the potential growth rate or the potential curve of soil carbon levels and the nutrient deficit is very large. There are opportunities for outside returns. This creates an interesting moment for unicorns to get involved in regenerative agriculture and food. There is some kind of scepticism among investors, which often creates the need to address and explain the impact-oriented companies and concessionary returns topic.
“We certainly consider ourselves mission-driven as we truly believe regenerative agriculture presents the greatest opportunity for improving human and planetary health. We believe that opportunity necessarily provides for market returns. That’s why we’re investing in inherently impact- oriented companies.” – Pete Oberle
VENTURE CAPITALISTS INVESTING IN REGENERATION
In 2019 Pete together with three other partners saw the opportunity to launch a regenerative agriculture fund. They identify the need for a broader scale approach and for adding value to improve some of the challenges of the current food system. Historically, food and agriculture companies took longer to develop and more capital, so it wasn’t as compelling as venture capital investment. Looking at that market historically, food and ag-tech had about 8 unicorns, but that has accelerated rapidly in the last few years.
“We are at a point where consumers’ demand and awareness is significant enough, and tech has improved enough that both of those factors together can accelerate that timeline and provide for those outside returns.” – Pete Oberle
FINTECH COMPANIES ARE CRUCIAL TO SPEED UP THE REGENERATIVE TRANSITION
Fintech companies can help improve access to financing options for farmers, which is extremely necessary. At the same time it’s very difficult to get loans and it takes so much time. Pete talks about pairing with fintech companies as a possible next project. The industry wants to grow and meet consumers’ demand and, even though the money is there, the solutions aren’t, so those bridge builders are crucial.
“The banks have not evolved and it takes forever to get a loan approved, anything that’s really helping to improve financing options for farmers is a big step in the right direction there and there are a lot of opportunities out there.” – Pete Oberle
MORE TRANSPARENCY, LESS FOOD WASTE
We are not able to feed the world, and that isn’t because of the amount of food we produce. Two billion people are overweight or consume more calories than they need. It mostly seems to be a distribution problem if we look at calories only and not at the quality of calories we consume. 10% of people in the world go to bed hungry, and 20% are overfed. The food system we created is not feeding us. Trailhead Capital has been making investments in waste production, traceability, transparency, carbon market and regenerative meat. One of their investments is FoodMaven.
“Feeding the world is not the problem. 800 million people go to bed hungry every night, that’s 10% of the population. We waste 30% to 40% of the food that we produce. So really, I think first and foremost, that is where we need to focus a lot of our attention in terms of just improving efficiency and reducing the waste in our system.” – Pete Oberle
“FoodMaven provides better tracking and pricing for food items. Buyers are able to see real-time prices and select for regen characteristics. Through some of the technology and software, FoodMaven enables better transparency into the various nodes in the system and therefore better connectivity.” – Pete Oberle
CULTIVATED MEAT CAN BE DONE REGENERATIVELY
Omeat is a cultivated regenerative meat company that brings a compelling technology and represents a potential alternative. It enables costs parity with current options out there because it’s got a growth medium that reduces the cost by 99%. They partner with regenerative ranchers by placing bioreactors on the farm. It increases the output of regenerative cows by 20 to 100 times, and it replicates the regenerative nutrients density of the regenerative cows.
“All the inputs are taken from the cow in a minimally invasive biopsy, so basically you get the molecular, cellular, DNA, and nutrient density level that’s more or less identical to the meat from the cow.” – Pete Oberle
OTHER POINTS DISCUSSED:
- Paleo food and diet;
- On-site vs decentralized production;
- Regenerative food systems investment forum;
- The possibility of longer period/larger fund to come in the future;
- Comparing regenerative and conventional farming.
- Trailhead Capital Portfolio
- Paleo Diet
- Warren Buffett’s Berkshire Hathaway reveals major stake in HP Inc., tech stock soars 15%
- Soil health and nutrient density: preliminary comparison of regenerative and conventional farming
- Mark Lewis, hunting for unicorns in regenerative agriculture and food
- Tripp Wall on why provenance is key and time kills food
- Frank Wooten on how virtual fencing unlocks the potential of carbon positive grazing at scale
- Troy Carter and Patrick Leung on preventing speculative boom around the $5T carbon potential of degraded land
- Ethan Soloviev on the enormous lack of regenerative ingredients for food companies and what to do about it
- Dan Miller on the crucial role of locally owned processing in regenerative agriculture
- Phil Taylor and Brandon Welch, the first investments of Mad Ag’s $10 million fund
- Stephen Hohenrieder on investing in mature food companies and help them go further and deeper
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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.