A conversation with Eric Archambeau, co-founder of Astanor Ventures, about the early-stage space slowly getting crowded, the enormous influx of talent focussing on food, agriculture and soil, health care costs, AI/ machine learning, the computational power and the future of regenerative agriculture.
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We talk about it at conferences and discuss it over coffee: we should get institutional investors (the pension funds, insurance companies, and very large asset managers) investing in the space. But very few people have actually raised from these players and thought about their role.
Who can write $100M checks to give the scale-ups in the regenerative agriculture and food tech space the time to grow? Why now is the moment for regenerative food and agriculture (as healthcare costs are getting out of control, institutional players are forced to invest in impact, technology and raw computational power make almost magic possible)?
AFTER A VERY SUCCESSFUL CAREER IN SILICON VALLEY AND AS A VC INVESTOR, GOING ALL IN ON FOOD AND AGRICULTURE
We have been producing huge problems on the health side due to poor nutrition and problems in the food system. People are developing all kinds of metabolic diseases, especially diabetes type two, which should not exist in the world. In the US, it is estimated that 30% of people who are born after 2000 will have developed diabetes type two by 2030.
“What led me to soil? Food led me to soil” – Eric Archambeau
“I was very fortunate to meet a few chefs that were really inspiring in their vision of the need to change the approach to food, and that led to, in the supply chain, to where this food came from […] and I discovered the really deep problems of our food system, which has been, and I’ve said that a couple of times before, but has been developed over the past seventy years, to deliver very efficiently cheap calories throughout the world, but not cheap nutrients.” – Eric Archambeau
“I came from this food side being really aware of how all the things around corn and high fructose corn syrup, trying to understand these monocultures, and how, including in Europe, the monoculture, which is sponsored by subsidies, you know, to keep this status quo…” – Eric Archambeau
“Frederik Thomas showed me the difference between his soil- he was using regenerative agriculture- and the soil of his neighbour, who did not see the point. I think today still doesn’t see the point, the neighbour because he gets all the subsidies. And suddenly, it was the aha moment when Frederick started to dig in the soil and showed me the difference in the soil between the two. And everything clicked together […] I said there is something to be done here” – Eric Archambeau
WHY LATER STAGE VC FUNDS ARE ESSENTIAL
Later stage investments are not profitable overnight. It requires high conviction. Many venture capitalists are dealing at the lower amount level and doing a fantastic job nurturing earlier stage companies, but there is not enough money going into the next stages, the growth stage. These are still pioneering industries. And it might take five years for a company to be profitable, and today is really difficult to fund that gap.
“So suddenly, we see a lot of interest, at least theoretical interest for now. But I think it’s good news for all of us working sincerely in that sector, that are genuinely impact investing for the agri food space. There is a handful of funds that are doing that at a certain size. And I think it’s very important, that we have that power to invest in later stage investments that are not just seeds, but we can go at a higher level, because those companies will need sustained power, because you know, they’re changing the world” – Eric Archambeau
“This is key for the sector to get there. Because otherwise, we won’t be able to fund this transition.” – Eric Archambeau
THE INFLUX OF TALENT INTO THE SPACE GIVES HOPE
The good news about farmers is that there is a huge generational transition happening everywhere in the western world. The numbers vary between 50%, 75% in the next 10 or 15 years. There will be new farmers, today’s farmers will need to retire, and someone else needs to take over.
“The good news is what we’re seeing right now is you have 1000s of really bright entrepreneurs who were not thinking about that before, they were not thinking about regenerative agriculture, they were not thinking about biology that needs to be developed, they didn’t think about mechanical engineering that needs to be developed, about big data that needs to be developed for regen ag to become really the mainstream.” – Eric Archambeau
“I can see this momentum building […] I have reason to be optimistic, like seeing the level of brainpower that is being poured into that sector to think about next level solutions in the right direction. It’s unparalleled. […] When you have this connected brain power, with the type of technology that powers it between biology, synthetic biology, you know, AI, and so on. I cannot tell you about all the projects we’re seeing, but some of them are mind blowing.” – Eric Archambeau
HEALTH CARE COSTS WILL FORCE US TO MOVE
In the US health insurance belongs mostly to the private sector. According to Eric, these healthcare companies are all going to go bankrupt if they don’t do something. They’re going to mandate a number of things, they’re going to push people and entreprises.
“The health angle is one of the big ones, and the consumers themselves, the younger generation. I think the health angle is going to be the real driver, more than environmentally conscious people, which are a big minority, but they are not the majority yet. People see things that someone else can take care of that, not them, because they are busy, and they need to take their cars to go somewhere, and I fully understand them. But the health side is going to drive that.” – Eric Archambeau
OTHER POINTS DISCUSSED:
Koen and Eric also talked about
- The good news and the bad news about farming.
- The impact of investing in the agriculture space
- The future of health care
- What Eric would do If he had a magic wand
- Astanor Ventures
- Monarch Electric Tractor
- Agrieconomie €60M series B financing
- Ynsect, Premium Natural Feed
- Hectar on The Future Farmers of France Are Tech Savvy, and Want Weekends Off – Article on the New York Times
- The True Cost of Food in the U.S. – The Rockefeller Foundation
- Dan Barber, great flavour, health benefits and healthy ecosystems can only come from healthy soils not a lab
- John Kempf, what would he do with a 1 billion dollar investment fund?
- John Kempf – Forget about soil, Focus on plant health instead
- Anne Biklé and David R Montgomery – After studying more than 1000 papers the definitive answer, we are what our food ate
- Chuck de Liedekerke – We need more regenerative and financially literate farm managers
- Nicolas Verschuere @ Groundswell – How regenerating soil health can improve farm profitability from year one
- Aymeric Jung and Josep Segarra – From Lehman Brothers to rebuilding the food system
- Pierre Weill on selling 2b euro a year of animal protein as anti inflammatory food
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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.