Reimagining Foodtech: Insights from Nadav Berger of PeakBridge

In 2018, Nadav Berger and Erich Sieber founded PeakBridge, entering a booming foodtech landscape. With their extensive industry experience, they maintained a grounded approach while others floundered amid an overheated market. “Investing in food,” Berger asserts, “is a marathon, not a sprint.”

The Role of AI in Foodtech

Artificial Intelligence (AI) is transforming the foodtech landscape, offering tools that save time and costs while enabling mass personalization efficiently, according to Berger. “I believe restaurant tech is a crucial area,” he notes. In the U.S., about 55% of calories are consumed outside the home, yet the industry remains plagued with challenges, particularly concerning labor and human resources.

Investing with Intention

Berger emphasizes that successful investing is fundamentally about relationships. “It’s like a marriage; it’s almost impossible to divorce from your investors,” he cautions. Founders must engage in thorough due diligence, akin to dating before marrying. “Speak to other portfolio companies of your potential investor to gauge their true nature, especially when times are tough.”

The Current Climate of Foodtech Investments

In a recent conversation with AgFunderNews, Berger shared that the foodtech investment cycle is nearing its bottom. He described 2021 as a sobering year characterized by high valuations and a mass exit of generalist capital from agrifoodtech. “The food industry does not yield quick returns. Multiples may be more realistic at 3x or 4x, but the likelihood of success is higher,” he explained.

The Genesis of PeakBridge

Both founders have deep-rooted connections in the food sector. Berger co-founded the FoodLab and FoodLab Capital, while Sieber spent nearly two decades at Nestlé. They later brought on board Yoni Glickman, renowned for his leadership at Frutarom, facilitating the foundation of a scientific advisory board filled with food experts. PeakBridge aims to offer more than just funding by helping entrepreneurs reach their apex.

Investment Strategy and Focus Areas

Berger shared that PeakBridge primarily focuses on B2B ventures with scalable technologies. Their strategy centers around five pillars: ingredient innovations, alternative protein technologies, digitalization, nutrition & health, and alternative farming systems. Their funds have grown significantly, reaching $186 million in their third fund. They aim to engage at stages A, B, and C while also making smaller investments to create proprietary deal flows.

Adapting to Market Realities

As the investment landscape evolves, Berger noted a shift towards a more conservative and analytically savvy approach. “We are particularly cautious about high CapEx opportunities and better equipped to analyze unit economics,” he indicated. PeakBridge primarily targets businesses with proven models offering solid returns.

Collaborating with LPs and Corporates

The current climate has seen a reduction in players who lack a solid understanding of the foodtech landscape. “We’re in the last phase of refining our investor pool,” Berger explained. The role of corporates is invaluable in fostering startup growth and understanding market dynamics.

AI as a Game Changer

When asked about AI’s encroachment on venture capital dollars, Berger affirmed that the key lies in its implementation. Effective AI tools can yield better consumer insights and reduce operational costs significantly. “The application of AI should be bespoke, relevant to the industry, and driven by a distinct business case,” he stated.

The Future of Agrifoodtech

Berger identified several areas ripe for growth, particularly the synergy between health and nutrition and AI applications across the value chain. He also pointed out that while traditional roadblocks exist, Israelis are inherently resilient and agile, adapting to challenges effectively.

Key Takeaways for Founders

Exceptional founders are critical for building exceptional companies, but they must also be skilled in fundraising. Berger identified overselling as a common pitfall for entrepreneurs, stressing the importance of realistic presentations and thorough due diligence on potential investors. “Startups often rush into funding, neglecting valuable homework that could reveal vital insights,” he cautioned.

Conclusion

As PeakBridge navigates the evolving landscape of foodtech, it underscores the principles of patience, strategic focus, and the importance of relationships—both in investments and operations. The future of food innovation is not just bright; it’s a marathon where the right partnerships and insights can pave the way to success.

Further Reading:

• Rockstart’s Mark Durno on agrifoodtech’s next chapter: ‘Quality deals with defensible valuations’
• Matt Crisp on agtech investing: ‘We need to get small in order to get big again’
• Where Siddhi Capital is placing its bets: ‘GLP-1 is our AI. It’s a huge opportunity’
• Rich Products Ventures MD: ‘We have to get results, but we don’t have to answer to Wall Street’
• Astanor’s Eric Archambeau on agrifoodtech investing: ‘It annoys me when people say ‘That will never work’,