Target Company Overview

Seviora Holdings, through its investment arm Seviora Capital, has established a partnership with Temasek to strategically invest in late venture and early growth Agri-Food companies across the Asia Pacific (APAC) region. This initiative is known as The Future of Food and Farming (Seviora T3F) Strategy. Launched in August 2023, the Seviora T3F Strategy has successfully raised US$173 million in capital, demonstrating significant interest from both Seviora and Temasek as well as institutional investors such as Norinchukin Bank.

With a focus on innovative and sustainable Agri-Food solutions, the Seviora T3F Strategy aims to address the evolving challenges posed by demographic changes and consumer needs in the APAC region. The strategy is designed to identify companies capable of accelerating the Agri-Food system toward a more sustainable future while meeting increasing consumer demands.

Industry Overview in APAC

The APAC region, home to 60% of the global population but only 35% of its arable land, faces a significant challenge in food production. Projections indicate that the region will need to accommodate an additional 250 million citizens by 2030, necessitating increased agricultural efficiency and innovative solutions to enhance productivity. The majority of food in APAC is produced by around 450 million smallholder farmers, who typically manage less than two hectares of land, resulting in fragmentation within the agricultural sector.

Moreover, the region is witnessing a considerable shift in food consumption patterns as consumers become more affluent and discerning. This shift is expected to generate an incremental US$2.4 trillion in food spending by 2030, necessitating investments amounting to US$1.5 trillion in the upstream sector to meet these demands. Thus, the Agri-Food industry stands at a crossroads, with substantial growth potential fueled by these evolving trends.

From an environmental perspective, the Agri-Food sector is a major contributor to global emissions, accounting for approximately 34% of the total. In certain Asia-Pacific regions, such as South and Southeast Asia, this figure can rise to 50%. Addressing these emissions is essential for meeting climate targets and ensuring food security while accommodating the growing populations.

The investment in Agri-Food technology and sustainable practices is critical not only for expansion but also for decarbonization efforts. By focusing on innovative solutions, the Seviora T3F Strategy aims to play a pivotal role in transforming the agricultural landscape across the APAC region while promoting sustainability.

Rationale Behind the Deal

The Seviora T3F Strategy represents a strategic opportunity for both Seviora and Temasek to capitalize on the burgeoning Agri-Food market in APAC at a pivotal inflection point. With the partnership, both entities aim to leverage their collective expertise and networks to identify high-quality investment opportunities that can drive transformational change in this sector.

By focusing on late venture and early growth companies, the strategy prioritizes businesses that are positioned to significantly impact the Agri-Food value chain through innovation and technology. This proactive approach is essential to addressing the pressing challenges within the industry while meeting consumer expectations.

Information About the Investor

Seviora Capital is a Singapore-based investment manager that specializes in providing venture capital and growth funding solutions. Part of the larger Seviora Group, which manages US$52 billion in assets, Seviora Capital boasts a robust team of over 170 investment professionals. The group's expertise lies in both public and private market investments, offering a diverse range of strategies to global investors.

Temasek, a globally recognized investment company, has a proven track record in building an extensive portfolio of farm-to-fork businesses. With investments exceeding US$8 billion in innovative agricultural solutions over the past decade, Temasek significantly contributes to advancing sustainable practices and technologies in the Agri-Food sector across APAC.

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The partnership between Seviora and Temasek represents a forward-thinking strategy at a time when the Agri-Food industry is undergoing rapid transformation. The alignment of interests and combined expertise of both firms position the Seviora T3F Strategy as a compelling investment opportunity. The focus on late-stage and early growth companies enables targeted allocation of resources where they can have the greatest impact.

Furthermore, the strategic emphasis on sustainability and technology is highly relevant, given the increasing pressure on the Agri-Food sector to enhance efficiency while reducing environmental impact. This dual focus on innovation and sustainability not only addresses immediate industry challenges but also aligns with global decarbonization goals.

However, investors should remain cognizant of the risks associated with emerging markets and fragmented agricultural sectors. Successful implementation of the strategy will require continuous engagement with local stakeholders and an understanding of regional nuances. If executed effectively, this investment could yield significant returns while contributing positively to the sustainability mandate in the Agri-Food sector.

Overall, the Seviora T3F Strategy not only holds promise for financial returns but also embodies a proactive approach to nurturing sustainable practices within the Agri-Food industry, making it a potentially sound investment for the future.

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