Trailhead Capital Closes Tech-Enabled Regenerative Food and AG Fund at $50M
By Lynda Kiernan-Stone, Global AgInvesting Media
Boulder, Colorado-based Trailhead Capital believes that regenerative agriculture is our greatest opportunity to improve planetary and animal health, the condition of the soil, and the human condition today, thereby making it an optimal channel for outsized returns for stakeholders.
As such a mission-driven investor, Trailhead generates positive financial, societal, and ecological outcomes by targeting Seed and Series A investments in innovative, tech-enabled companies along the entire supply chain, from farm to consumer, that are building the regenerative future of food and agriculture.
Row crop agriculture contributes 5 percent of greenhouse gas emissions from the U.S., and is the largest emitter of nitrous oxide – a gas with 300 times more warming potential than carbon dioxide. However, scientists estimate that a 21 percent reduction in row crop emissions is a viable goal over the next 15 years through the optimization of current technologies – and a reduction of up to 71 percent is possible with new innovations.
Despite being a contributor, agriculture is also one of the most vulnerable sectors to climate change. But regenerative growing practices, which work with nature to optimize the health of the entire ecosystem, offer growers the ability to build healthy soils that can protect crops from uncertain rainfall patterns, reduce the need for inputs, reduce farm costs and risks, restore biodiversity, and strengthen the long-term value of the land.
Once viewed as a fringe movement, more recently the production methodology has been increasingly going mainstream, rapidly becoming a focus of some of the world’s largest CPGs as they take a more active role in determining the integrity of their entire supply chains.
“The current food system has done what it was intended to do – feed the world,” said Pete Oberle, managing partner, Trailhead. “Regenerative agriculture can improve upon that through its unique ability to transform an industry from a major carbon source to a huge carbon sink, minimize the 30-40 percent of food that is wasted every year, and improve the quality of the food we eat.”
Demonstrating strong investor confidence in this strategy and the success the firm has had to-date, Trailhead Capital announced the oversubscribed close of its inaugural fund, Trailhead Capital Regeneration Fund I, with total capital commitment of approximately $50 million.
The list of global, aligned backers is impressive and includes agricultural firms McDonald Pelz and the Rodale Institute; foundations such as The Argosy Foundation, Cisco Foundation, and the Zero Gap Fund (ZGF) – an impact investing collaboration between The Rockefeller Foundation and the John D. and Catherine T. MacArthur Foundation – along with climate-focused funds-of-funds including the Wire Group and WovenEarth Ventures; and several other unnamed high-net-worth individuals.
As a key investor, ZGF’s mission to catalyze private investment toward strategies that address the UN Sustainable Development Goals (SDGs), and its mandate to support scalable innovations and structures with the potential to drive needed financing for the global good, reflects much upon what Trailhead Capital Regeneration Fund I is working to accomplish.
“Spurred by the convergence of tech progress and consumer demand, accelerating corporate commitments, government funding and investment dollars indicate improved recognition of that potential, and we’re honored and humbled to be partnering with our investors and entrepreneurs to make it a reality,” commented Oberle.
The Trailhead Capital Regeneration Fund I has already invested in 22 companies and has successfully executed two exits to-date. Among others, some of Trailhead’s portfolio companies include Trace Genomics, the developer of the first scalable microbiome testing technology for the early detection of soil diseases, soil health, and crop quality; Clean Crop Technologies, the developer of a proprietary, energy efficient ionized air generator that combines air and electricity to maintain and extend the optimum conditions of foods and reduce waste; FoodMaven, a company that captures food that would otherwise go to waste due to a systemic network that is oversupplied and out-of-sync, or locally produced without access to a market, and then creates an online marketplace through which to sell it; and Fractal, a recently launched, unique agricultural investment platform that takes a novel approach to address the pervasive challenge of gaps existing in farm financing.
“I could not be prouder of our team for putting together a world-class group of investors and for thoroughly selecting and vetting opportunities in this exciting space,” said Bobby Pelz, Jr., founding partner, Trailhead. “Having been in the grain industry for 45 years, it is clear to me that regenerative food and agriculture is a major component of our future, and we are here to help drive its wider adoption.”
~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.
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