Zebra is investing in precision farming, alternative nutrition and food waste. Christopher Walker talks to co-founder Lionel Artusio-Payot about the firm’s investment approach and strategy for the future.
Zebra Impact Ventures aims to invest in nature technology companies that will enable the transformation of food systems. “We chose the name Zebra because we thought of it as a more sustainable version of a unicorn,” says Lionel Artusio-Payot, co-founder.
Artusio-Payot has more than 14 years’ experience in technology and private equity. He grew up in a family that understood the agricultural industry, he says. “I have a strong personal interest in sustainability, which I believe will be core to all future investment in the agriculture industry as a whole.”
Last year, the firm partnered with Mirabaud Asset Management to establish the SFDR Article 9 Regenerative Growth Fund I. The portfolio will consist of 20-25 startups with revenues above €1m, which are ready to scale and have a commitment to impact.
Artusio-Payot says the firm chose to partner with Mirabaud because “they can provide us with distribution and technical support in sales, marketing, risk management, compliance and legal affairs that it is difficult to obtain when you are a small VC investor, leaving us free to concentrate on impact”.
Key priorities
The firm wants to be best in class in terms of impact, according to Artusio-Payot. “During due diligence we ensure that every potential investment has a 360° impact analysis. We will then go on to define an action plan with three to five KPIs appropriate for its business model.”
In order to ensure they get impact measurement right, Zebra also seeks technical assistance from outside experts such as the World Wildlife Fund.
Zebra’s geographic focus is global, although many of its projects target the LATAM and US market. But when it comes to sourcing investments there is a clear bias towards Europe, according to Artusio-Payot. The largest areas of focus include Germany, France, and Switzerland. “We do have some investments in the USA, but Europe represents over 70% of what we’re currently investing in,” he says.
The firm has chosen to focus on three sectors that are driving change around resilience and sustainability. The first, precision farming, involves using a set of technologies to improve resource efficiency, pesticide use, carbon sequestration and productivity in food production. “Our main applications in this sector are greenhouse innovation, ag-biotechnology, farm management system and carbon,” says Artusio-Payot.
A second area of focus is alternative nutrition, which involves creating new food sources that are as attractive as today’s mainstream animal proteins and human consumption. “We focus on the B2B element- fermentation, cultivation platforms. And we aim to co-invest alongside big corporations to de-risk our investments.”
Food waste is the third area where Zebra is allocating, which involves targeting operational efficiency from sourcing through to warehousing and distribution, as well as upcycling traditionally wasted food elements into desirable products.
Allocations
“We are involved in some of the most exciting frontier companies. We wouldn’t have it any other way,” says Artusio-Payot.
He picks out CleanGreens, a company that develops an aeroponic system designed for greenhouses, for different species of leafy greens and herbs. It also has an automated robot that sprays a nutrient-mix solutions directly onto roots, and enables significant savings in the amount of water used. He tells us CleanGreens has created its first major farm in the MENA region in Kuwait. “Kuwait has stopped importing salad ingredients, a great Co2 saving,” Artusio-Payot says. He hopes there will be similar efforts in Saudi and Dubai.
There are several other interesting companies that Zebra is involved with. Pachama is evolving the carbon credits marketplace to standardise verification, and to efficiently connect supply and demand. It trains machine-learning models using satellite imagery, radar and field plots to estimate the carbon stored in forests today and into the future.
Koa’s upcycling process reduces the on-farm waste associated with cocoa fruit production, generates additional income for farmers and brings new ingredients to the food and beverage industry.
BettaF!sh makes seaweed-based fish alternatives, allowing consumers to save the ocean while enjoying their favourite foods. With BettaF!sh, coastal communities can continue their livelihoods with regenerative and sustainable seaweed cultivation instead of fishing.
Challenges
But the industry is not without its challenges.
“The biggest challenge for us is to make sure that our portfolio companies are prepared to make the effort to monitor and invest in their impact. It is equally a challenge sometimes for us to educate the big corporates who we invest alongside on these topics.”
Discussing the recent PwC climate tech report and its warnings on the state of the VC market for sustainable investments, he agrees that “there are significant issues around valuation following the difficult two years which we have had in the VC sector. It is important for everyone to understand that valuations have shifted.”
He also accepts that there are technological challenges in some areas, not least in indoor farming. “CleanGreens has shown you can solve the water problems. But the tremendous energy consumption necessary in vertical farming puts us off getting involved in that sector. We prefer to stay focused on greenhouse cultivation.”
Looking to the future
Artusio-Payot sees exciting new technologies coming in the future such as the area of soil and animal tech, where there is “clearly a call to action”.
Overall though, he wryly observes that “in the food tech industry the future has been clear for some time, often before the reality of that future was feasible. We must ensure as we go forwards that we are rational and pragmatic. Disruption is a good thing, but it must take into account the pace of technological development. We’re looking to seek agriculture 2.0 right now with a reasoned approach, rather than chasing agriculture 3.0 which is still some distance away.”
