15 Minutes With… Alex Borschow, Co-founder and Managing Partner at Semillero Partners

August 1, 2022

By Michelle Pelletier Marshall, Global AgInvesting Media

Known for being fully committed to the evolution of the companies it supports, San Juan, Puerto Rico-based investment manager Semillero Partners seeks to empower entrepreneurs at the intersection of value and transformational change. They work to rethink and redefine this change by combining capital with collaborative support and specialized management expertise in distribution, operations, food safety, marketing, and logistics. Semillero invests in food & beverage and food technology with an underlying focus on sustainability.

Co-founder and managing partner Alex Borschow has been evaluating and investing in food industry innovations for over a decade, and started Semillero in April 2016. With a focus on advocating for a more sustainable and equitable food system, the company seeks out early and emerging growth stage companies across the value chain – from primary production, to seeds, agtech and processing, and consumer goods. Semillero (which means “seedbed” in Spanish) began by investing a $25.1 million first fund in 17 companies, deploying $250,000-$5 million to those organizations. Now, six years later and on their second fund, Semillero’s portfolio includes clients like Imperfect FoodsFarmer’s Fridge, and Seal the Seasons, a North Carolina company that partners with farmers to freeze local produce, in which Semillero invested $1.8 million in 2018.

For Borschow’s part, his passion to invest in ag was fueled by his introduction to environmental conservation. “I learned that one of the biggest threats [to the environment] was large-scale, industrial, unsustainable food production methods,” he said in a previous interview, and this spurred his interest in investing in sustainable businesses and entrepreneurs.

GAI News spoke with Borschow to get more details about how he finds promising leaders with untapped disruptor potential, giving them access to the funding and connections they need to move the needle in ag innovation.

1). Tell us more about the size and scope of your current portfolio, and your most recent investments in food and ag. 

Semillero now manages over $52 million in assets and has completed 23 investments in companies across North America, Latin America, and Israel. Our current fund portfolio includes our recent investment in Sanzo, which develops authentic Asian-flavored sparkling beverages with no added sugar and real fruit. We also invested in Scout, a Canadian company that produces North American sustainably sourced tinned seafood. We will announce new investments in the months ahead as we continue our mission of investing in underserved and underinvested groups across the sustainable food ecosystem.

2). It’s all about sustainability in the sector – what do you see as the next big ag innovation along these lines, and how will Semillero be involved?

The next big innovation that we are watching closely is cellular ag. There has been significant development and investment in the technology of precision biofermentation to produce animal products in a manufacturing plant with pharmaceutical standards. Most importantly, these animal products will be produced without antibiotics, fertilizers, or artificial hormones, and with a small fraction of the water, land, and energy used by conventional industrial agriculture methods. The carbon and resource footprint of a lab-produced chicken breast or steak will be tiny compared to its traditional counterparts. Plant-based alternatives are growing in popularity, but we envision a future where consumers will still want to eat meat. We have been tracking the industry closely – especially companies in Europe and Israel – and believe that as the technology scales, there will be additional innovations producing meat, poultry, and seafood that are healthier for consumers and truly sustainable for the planet.

3). Your focus is on regional, diverse, local entrepreneurs. How do you view these factors as drivers of real change in the current food system? 

Existing food systems are under intense pressure to adapt or lose revenue. Sustainability concerns, supply chain disruptions, and consumer demand changes are challenging existing supply network relationships as the need for locally sourced food options and regional procurement becomes clearer. Local and regional supply chains tend to have a much lower carbon footprint, which addresses the sustainability demands of consumers. Our investments in companies like Scout, Seal the Seasons, and PRoduce are answering the call of consumers by bringing sustainably and regionally sourced products to their clients with omnichannel strategies.

When we look at the changing demographics in the U.S., 48 percent of GenZ identifies as racially or ethnically diverse. These consumers will be largest population segment over the next decade and are looking for authentic cultural food brands that share their values of sustainability and transparency. As Latinx founders, we understand this and find resonance with minority founders who are overlooked and underinvested in by the broader venture capital and private equity ecosystem, with less than 2 percent of early stage funding going to Latinx founders. We are changing that by partnering with diverse entrepreneurs – who serve as prime examples to others – to drive change in the food system.

4). What has been the most exciting and/or impactful project or investment that you’ve worked on to-date? And what’s next for Semillero? 

We are always excited about our investments, so it is hard to single one out. If I had to pick one to discuss, I think Farmer’s Fridge, which has carved out significant market traction, is a great example of the growth path we hope all of our portfolio companies can enjoy in the years ahead.

Semillero first invested in Farmer’s Fridge in 2018 after getting to know them for a few years. They developed and produced an innovative smart vending fridge that provides consumers with healthy and fresh food options in high-traffic locations like airports, college campuses, and office buildings. Leveraging data and their proprietary tech stack, they also were able to optimize fulfillment of items to reduce waste while also sourcing locally and regionally where possible. This has the potential to truly change the dynamic of quick service restaurants (QSR) and the unhealthy and highly processed offerings they have with associated high capex and opex budgets. Farmer’s Fridge has emerged from the pandemic with vastly improved capital efficiency and margins and is poised for truly disruptive growth over the next few years.

As for what is next … we are still at the start of our journey. Diversity in the food industry needs to include many more minority entrepreneurs to drive true change. Semillero is looking forward to partnering with the next generation of coachable female and diverse founders in the food system, who also have a clear focus on sustainability and profitability.

ABOUT ALEX BORSCHOW

AlexBorschow_SemilleroAlex Borschow is co-founder and managing partner at Semillero Partners, and for decades has been an active advocate for a more sustainable and equitable food system. Borschow serves on the Board of Directors for Tasty Smart, Seal the Seasons, Biomass Green Fuels, as well as the Board of Foundation for Puerto Rico, a non-profit dedicated to developing sustainable economic development strategies for Puerto Rico.

Prior to Semillero Partners, he was the first director of finance for Eataly USA. Early in his career, Borschow rose to become the youngest director in the history of BNP Paribas’ New York office, and became head of OTC sales for North America in just five years.

A graduate of the Massachusetts Institute of Technology (MIT) with a degree in chemical and biological engineering, Borschow earned his MBA from the MIT Sloan School of Management along with a Certificate in Sustainability with a focus on food systems.  

*The content put forth by GAI News and its parent company HighQuest Partners is intended to be used and must be used for informational purposes only. All information or other material herein is not to be construed as legal, tax, investment, financial, or other advice. GAI and HighQuest Partners are not a fiduciary in any manner, and the reader assumes the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on this site.

Marshall-Michelle-400x400– Michelle Pelletier Marshall is contributing editor and author for HighQuest Partners’ GAI News and Unconventional Ag, and managing editor for its WIA Today blog. Additionally, she is the company’s Senior PR/Media Manager. She can be reached at marshall@highquestpartners.com.

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