A check-in interview with Mark Lewis, managing partner at Trailhead Capital, about the inevitability of the “regenerative revolution” and the potential for significant financial and non-financial returns in this space. What does putting almost half of your $50 million VC fund to work in businesses active in the regen space in North America taught Mark about the space, what has changed since 2021, and which big opportunities haven’t we collectively invested in? What is missing and what is needed? And we discuss why Mark is no longer hunting for unicorns, but is still very positive about the potential for financial returns in the regenerative food and agriculture space.
LISTEN TO THE CONVERSATION ON:
REGEN IS INEVITABLE
According to Mark, the regenerative revolution is inevitable. It is necessary to address major global issues like climate change, biodiversity loss, water scarcity, human health, and rural livelihoods.
”Agriculture is a key part of the solution, and transitioning to regenerative practices is crucial and cannot be avoided if we are to improve the state of the planet and humanity. […] I think it’s going to happen; it’s a matter of time. But there’s one thing: we just cannot continue on our current course. Agriculture contributes 20 to 25% of all global greenhouse gas emissions, and uniquely, it can go from source to sink, so that has to happen. And that’s through regenerative practices.” Mark Lewis
VC-TYPE RETURNS ARE POSSIBLE IN REGENERATION
Mark has backed off from his previous thesis of “hunting for unicorns in the regeneration space,” acknowledging that there are not a lot of ag tech unicorns, and that might be okay. Instead, he says they are now underwriting for more realistic exits in the $200-500 million range, which would still provide 10x returns for their investors.
”I would probably back off of that a little bit. You know, just if you look at the data, there are not a lot of ag tech unicorns, and there might not be any that might be okay. And so, we’re really underwriting now, more for like 2, 3, 4, or $500 million exits, which for us, we underwrite to a 10x return minimum, which is what we want to build a believable case for.” Mark Lewis
”We need to reinvent how we feed, clothe, and shelter humanity in a relatively quick timeframe to solve problems around carbon, biodiversity, water, human health, and rural livelihood. Those are huge environmental and social problems that are going to require massively scaled companies and solutions. And that should lead to large exits.”
– Mark Lewis
OTHER POINTS DISCUSSED
Koen and Mark also talked about:
- The role of major food and agriculture companies in transitioning to more regenerative practices
- The growth and evolution of the voluntary carbon market
- The slower-than-expected progress in developing accurate soil carbon and total farm greenhouse gas monitoring technologies
LINKS:
- Portfolio companies – Trailhead Capital
- Investing in functional health
- Frontier Climate
- Symbiosis Coalition
LINKED INTERVIEWS:
- Pete Oberle on how to invest in lab grown regenerative meat
- Tripp Wall on why provenance is key and time kills food
- Mark Lewis, hunting for unicorns in regenerative agriculture and 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.
I left a comment on the Common Land podcast which was actually referring to this episode.
It was actually Mark Lewis who I was quoting as saying he would work on public policy if he as not in his current position.
Sorry for the confusion.
Hi Brent, no worries! Thanks for your comment and sharing your thoughts!