SKEMA alumnus Pedro Peixoto, a co-founder of 10b Gestora de Recursos, is working hard to empower livestock farmers in Brazil by helping them scale up their technologies and produce via a more sustainable way without giving up margins. In this insightful article, he recounts his entrepreneurial journey.
Full name: Pedro Peixoto
Graduation year: 2019
Master / Program specialization: MSc Entrepreneurship and Innovation
Company name: 10b Gestora de Recursos (10b Asset Management)
Position: Co-founder of 10b Gestora de Recursos, Chief investment officer at 10b Livestock Fund
Location of business: São Paulo, Brazil
Quote: “What really made a difference for me was partnering with senior people and to cultivate a network of senior professionals. That is key to gaining credibility and access to the kind of people who can help you succeed and not make avoidable mistakes.”
Origin of the idea
I joined the venture capital industry after graduating with a bachelor’s degree in finance from the New York Institute of Technology in early 2015. My first job in the industry was as an analyst at a family office in NYC. Later, I moved to my hometown Belo Horizonte, Brazil, where I joined the largest early-stage VC firm in the country as a dealflow business developer, responsible for the pipeline of investment opportunities from the southern region of Brazil.
From March 2016 to April 2017, I led three early-stage investments in companies with machine learning solutions for the energy, agriculture and security sectors, and analyzed in-depth over 500 startups. As I became more involved in the Brazilian innovation ecosystem, the gap between the expectations and reality in entrepreneur-investor relationships in our innovation ecosystem became evident to me. Among several issues, most strikingly was the lack of support and coordination from investors in the crucial mission of scaling up their portfolio companies, especially the ones following B2B strategies. VCs often bragged about their network but were rarely generating actual value with it through market access. Therefore, there was a clear opportunity to work across players in the ecosystem to fill this gap.
A few months before joining SKEMA Business School, Sophia Antipolis, in the fall 2017 semester, my partners Edsmar Resende and Artur Tacla – two senior consultants and investors with decades of experience in corporate innovation – and I co-founded Circle Ventures. We started assisting large Brazilian corporations in agriculture, energy, logistics and healthcare sectors to navigate the local innovation ecosystem. Our mission was to look for Brazilian startups that could solve real problems from corporations and to minister end-to-end the decision-making processes, making sure the real potential of innovative startups could be absorbed by our corporate clients, both on a financial and sustainability standpoints. In parallel, we also began investing in R&D stage biotech startups in Brazil in healthcare, petcare and food.
During my two semesters in France, I was working part-time to support my partners in Brazil and grow Circle Ventures abroad as well. In retrospect, we have been very successful, reaching over USD 300K in revenues within the first 12 months and having dozens of Brazilian startups and corporations as recurring clients.
Upon my return to Brazil in May 2018 after completing SKEMA and thanks to a successful project with the largest food company in the country, Circle Ventures caught the attention of Tarpon Investimentos. Tarpon is one of the most successful investment firms in Brazil, with both public and private investments and over USD 4 billion in assets under management at the time. As conversations evolved, it became clear that there was an opportunity to combine forces and different backgrounds to invest in technologies for the Brazilian agriculture and food sectors, through very in-depth investment strategies focused on consolidations of innovative companies with synergetic and winning solutions focused on farmers and consumers alike. Not only had Tarpon invested in several companies in agriculture and food in the past, my partner Edsmar comes from a traditional farming family in the rural Brazilian state of Goiás. Thus, we had the know-how.
And that’s how we co-founded 10b Gestora de Recursos, a joint venture between Circle Ventures and Tarpon. In a nutshell, 10b is an investment firm investing in innovative companies in the Brazilian agriculture and food sectors so that farmers can grow more food more sustainably and efficiently feed the future global population of 10 billion people.
How the idea evolved
Within agriculture and food, there are several potential areas to focus on. The biggest challenge for 10b at the beginning was to choose where to begin. Another key challenge was to combine different investment backgrounds, agribusiness expertise and technology expertise into a coordinated and seamless investment strategy.
The intensive process of design and development lasted the whole of 2019, evaluating dozens of investment opportunities during the period. Finally, we decided to focus on five key areas of agriculture and food: livestock (dairy and beef), biological inputs, grain storage, innovative foods and agribusiness education.
Then, we successfully structured two investment funds to kick-start our investments in livestock and grain storage in the last quarter of 2019, raising around USD 10 million and USD 30 million on first closing, respectively, mostly with Brazilian family offices and wealthy individuals as limited partners.
10b Gestora de Recursos is currently undergoing the registration process with the Brazilian securities exchange commission (CVM).
How the company/startup is doing now
So far, we have invested in three companies: OnFarm (animal health technologies startup) and Ideagri (farm management systems startup) as part of our livestock investment strategy, and Kepler Weber (publicly traded grain storage infrastructure multinational) as part of the grain storage investment strategy. We are currently raising about USD 40 million for our third funding round to invest in a leading biological farming inputs company in Brazil.
As the chief investment officer of the livestock investment strategy, I’m fully engaged in the development of our investments in livestock. My objective is to scale up these technologies and empower livestock farmers in Brazil to produce via a more sustainable way without giving up margins.
With a strong data analytics capacity within both of our firms and within the 10b team, we will leverage on farming data to build a robust platform for the sector, a suite of solutions to farmers offering not only high-tech systems but also data-driven credit, marketplaces and consequently bargaining power against the traditional industry. As of Q1/2020, our portfolio companies in livestock have over USD 2 million in combined annualized revenues and are present in over 4,000 Brazilian livestock farms, growing that user base 10% per month on average.
Assistance received from SKEMA
Since returning to Brazil, I have been in regular touch with Nicolas Servel, director of the MSc Entrepreneurship and Innovation, for guidance and insights. Prof. Servel is also part of Circle Ventures’ advisory board since 2017.
I have also been in touch with my former classmate Jérôme Brickert, who is now leading InVivo Quest initiatives in agribusiness technologies in Europe and in the Americas.
Finally, I also rely on SKEMA to find talented students and graduates for roles at 10b and our portfolio companies. In fact, I will be adding a student from the MSc Entrepreneurship and Innovation to my team in July 2020, once travel to Brazil from France is re-established and she is able to join us.
Advice for future SKEMA entrepreneurs
What really made a difference for me was partnering with senior people and cultivating a network of senior professionals. That is key to gaining credibility and access to the kind of people who can help you succeed and not make avoidable mistakes. These senior professionals have seen many ideas fail and succeed and are surprisingly open to partner with young entrepreneurs as long as they feel that they will be heard, and high-level execution is granted.
Successful entrepreneurs are on average 40 years old. Therefore, if you’re in your twenties like me (I’m 27), find ways to fill the experience gap by bringing veterans on board.
Best of luck!