Target Information

Seviora Holdings, alongside Temasek, has initiated a strategic partnership to collectively invest in late venture and early growth Agri-Food companies across the Asia Pacific (APAC) region. This initiative, termed The Future of Food and Farming (Seviora T3F) Strategy, aims to address the pressing challenges faced by the Agri-Food sector, such as sustainability and food security. Since its inception in August 2023, the Seviora T3F Strategy has successfully raised US$173 million, consisting of seed capital from both Seviora and Temasek, alongside significant contributions from institutions like Norinchukin Bank.

The Seviora T3F Strategy focuses on innovative, high-growth Agri-Food companies that provide sustainable solutions to meet the evolving consumer needs and demographic challenges within the region. The investment strategy is designed to identify opportunities that are pivotal to the transformation and modernization of the Agri-Food system in APAC and beyond, facilitating both technological advancements and sustainable practices.

Industry Overview

The Agri-Food sector in APAC is witnessing a critical inflection point as the region grapples with the pressure of supporting a ballooning population. Asia makes up 60% of the global populace but possesses only 35% of the world's arable land. By 2030, it is anticipated that 250 million more residents will add to the demand for food, presenting unique challenges for agricultural efficiency and production practices across the region.

Currently, smallholder farmers dominate the agricultural landscape in APAC, with over 80% of food consumption sourced from 450 million farmers operating on less than two hectares each. This fragmented agricultural framework poses significant challenges, necessitating innovations in market access, financing options, and agricultural technology to ensure that the region can meet its food security goals.

Additionally, the region is experiencing a paradigm shift in consumer attitudes towards food, with rising incomes leading to more sophisticated and health-conscious choices. This transformation is projected to result in an incremental spending of US$2.4 trillion on food by 2030, requiring an investment of about US$1.5 trillion to align production capabilities with consumption trends.

The Agri-Food sector is also a substantial contributor to global emissions, accounting for approximately 34% of total emissions. This issue is particularly acute in South and Southeast Asia, where the agricultural sector's emissions can reach up to 50%. As the sector undergoes transformation, addressing these environmental impacts will be crucial for driving a sustainable future.

Rationale Behind the Deal

The partnership between Seviora and Temasek embodies a strategic alignment aimed at driving significant growth and innovation within the Agri-Food landscape in APAC. By combining resources, expertise, and networks, the two entities seek to capitalize on the macro trends exposing fertile ground for investment in this sector. This collaboration not only aims to mitigate food insecurity but also intends to contribute positively towards the decarbonization efforts that are gaining traction globally.

Seviora Capital envisions the Seviora T3F Strategy as a unique entrance into a rapidly evolving marketplace, leveraging Temasek's established presence and experience in the Agri-Food space. This positioning allows them to access a robust pipeline of investment opportunities that are vital for meeting the pressing demands of food production and sustainability.

Information about the Investor

Seviora Capital, based in Singapore, specializes in providing venture capital, growth funds, and tailored investment solutions across a variety of public and private market strategies. It operates under the broader umbrella of Seviora Group, an asset management firm with US$52 billion in assets under management, which is wholly owned by Temasek. Through its extensive institutional relationships and investment capabilities, Seviora Group serves as a critical player in the Agri-Food investment landscape.

Temasek, recognized as a leading global investment company, is committed to supporting innovative Agri-Food initiatives that promote sustainable change. Over the past decade, it has invested significantly in scalable farm-to-fork businesses, developing a portfolio rich in impactful solutions that bolster food security amidst environmental challenges. This move underlines Temasek's dedication to promoting responsible investment strategies aligned with global sustainability goals.

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From an investment perspective, the Seviora T3F Strategy represents a promising opportunity for stakeholders looking to engage with the rapidly evolving Agri-Food sector in APAC. The combination of increased food demand due to demographic changes alongside the urgent need for sustainable practices presents a fertile investment landscape. By focusing on innovative companies that address these challenges, Seviora and Temasek are strategically positioned to capture significant returns while contributing positively to the environment.

The partnership's emphasis on leveraging Temasek's extensive network for sourcing investment opportunities further enhances its attractiveness. This collaborative approach mitigates risk while broadening the scope of impactful investments. With the sector poised for substantial growth, the Seviora T3F Strategy aligns well with long-term investment goals in sustainability, technology advancement, and food security.

Moreover, as evidenced by the initial investment in Country Delight—a technology-driven platform enhancing food delivery quality—the strategic approach taken by Seviora Capital can effectively address existing market pain points. Such investments underscore the importance of tech-enabled solutions that cater to shifting consumer preferences and food safety regulations.

In conclusion, this partnership is well-positioned to leverage current trends and technologies to drive change within the Agri-Food sector. As investors increasingly prioritize sustainability alongside profitability, the Seviora T3F Strategy could yield significant benefits not only for investors but also for the larger community seeking solutions to the ongoing challenges in food production and consumption.

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