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B. G., Opalesque Geneva: Impact funds targeting the environment are well in tune with the ongoing trends among consumers as indeed flexitarians (who follow a flexible alternative to being a vegetarian) are gaining ground globally, as well as people preferring leather alternatives to animal leather and protein alternatives to meat. This trend is long-term as it is young people who are leading the plant-based products market.
Beyond Impact is one of those impact funds and it has a very clear mission; to help resolve environmental problems around four key pillars:
• the use of animals for protein, for which the solution can be found in plant-based fermentation and cellular agriculture,
• animal-derived materials and apparel, which can move towards sustainable, circular, bio-based alternatives,
• animal-derived ingredients (protein, fat, emulsifiers, foaming agents, binding agents, enzymes, etc.), which can be replaced with new ingredients, enablers and capacity builders,
• animal testing for personal care products.
"Overall we consider ourselves to be part of the group of VCs that are financing climate solutions," says CEO Claire Smith, "In particular, because the use of animals in agriculture is a market segment that has been largely ignored as a climate solution. This segment has a huge potential for climate mitigation, ocean climate action, biodiversity preservation and climate adaptation." Claire Smith will participate in our next webinar on November 8th (details below).
Claire Smith, who founded Swiss-domiciled advisory firm Beyond Investing and the Beyond Animal platform in 2017, leads a diverse team of partners who collectively have experience of well over 100 years in financial markets.
Environmental Finance presented Beyond Impact the "Environmental Fund of the Year 2023" global title this year after awarding Claire Smith the "Investment Leader of the Year" title in the 2022 Sustainable Investment Awards.
Beyond Impact also recently won both the "Best ESG Fund" and "Best ESG Fund: Climate Focused" categories at the Private Equity Wire European ESG AAA Awards.
The VC Funds
Beyond Impact runs two Luxembourg-domiciled global venture capital funds; Beyond Impact Fund I and Beyond Impact Fund II. Fund I, which was launched in early 2018, achieved a net IRR of 49% through to June 2022. It closed to new investments in 2020, while the portfolio management is ongoing.
It has already invested over $40m in alternative proteins and vegan products, with a portfolio of 30 investments, including the early rounds of ground-breaking food and biotech companies such as Geltor, The EVERY Company, Mosa Meat, Supermeat, and BlueNalu.
Fund II was launched in March 2022 with $25m of committed capital and is actively raising assets to reach its fundraising target of $160m. It will invest in pre-series A through to Series B with tickets between $1m and $10m, and a focus on global alternative protein food and materials companies with a diversified team. The target IRR is 30% (net) - and the target reduction of CO2 emissions is 231,000 tons annually. The fund has made 10 investments so far.
"We made 10 investments in 2022 - out of which 60% of them have an ingredients/enablers focus: Geltor (precision fermentation), Paleo (precision fermentation), Algama (micro-algea), Renewall Mill (upcycling), Gourmey (cell-ag) and Jack & Bry (jackfruit-based protein technology)," said Sagar Tandon, a partner at Beyond Investing.
"Our investment thesis is an extension of Fund I's thesis but has been adapted to the current environment, the changing picture of the alternative protein market, and the gaps in the market where the most interesting opportunities are," says Claire Smith. "Fund I has a higher exposure to brands because at the time the investments were being made, it was necessary for brands to be created and to bring products into the market. Our focus with Fund II is more towards B2B and ingredients, so components of these products that can be sold to all of the producers. So we're moving upstream in the supply chain. Having said that, we also made some investments in the ingredients side in Fund I."
Every investment aims to meet as many of the UN SDG goals as possible and follows the requirements of the SFDR.
It is time
The Beyond Investing group of companies also runs a US Vegan Climate ETF (listed equity fund), launched in 2108, and is deploying two regional seed funds, one in the UK and the other in the US, which are currently fundraising.
Claire Smith feels now is the time for investors to allocate to environmental solutions. "We feel it is absolutely urgent to invest in these solutions to migrate the economy in which we all participate and contribute, in terms of our consumption of foods, materials and other products used in our daily lives. It is crucial that this transfers to a sustainable economy for the reasons of food security, the climate emergency, the water crisis and the severe depletion in biodiversity."
Upcoming Webinar
Small Managers - BIG ALPHA Episode 12
The latest episode of this ground-breaking interactive webinar series presents you with another carefully screened panel of investment managers worth taking a look at.
When: Wednesday, November 8th at 11 am ET
Who:
- Brett Craig, Director of Private Credit of Aura Group, Aura High Yield SME Fund.
- Claire Smith, founder of the humane investment platform Beyond Investing and US Vegan Climate Index Beyond Advisors.
- Stefan Tittel, founder and CEO of Quantumrock, Rough Gemstone I.
- Tony Bremness, Laureola Advisors, Laureola Fund, a life settlements fund.
Free registration here: www.opalesque.com/webinar/
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