Coffee With: Hossam Allam (LinkedIn), co-founder and General Partner of Climate Resilience Fund: Hossam Allam, who co-founded the Climate Resilience Fund with Sherief Kesseba last September, previously founded impact VC fund Sandfjord Capital and served as CEO of Hassan Allam’s Property Management arm. An oceanographer by training, Allam is also a board member at Hassan Allam Holding, Legacy Egypt and Education for Employment, and chairman of Acasia Group (formerly Cairo Angels).

The Climate Resilience Fund plans to deploy USD 25 mn over the first two years in seed stage agrifood startups that employ agritech and nature-enabled solutions to address climate change.

ENTERPRISE: Tell us about the Climate Resilience Fund and what it's hoping to accomplish.

HOSSAM ALLAM: We invest in early stage ventures that sit at the intersection of agrifood and climate — sometimes referred to as agrifood x climate — and it’s a new thesis in the startup ecosystem. Most people associate climate with decarbonizing energy and logistics, whereas we look at climate through the lens of the carbon footprint of agrifood and agroforestry. Agrifood has almost as big of an environmental impact as transport and logistics combined, so that’s our angle on planetary health.

We’re an environmental impact, Africa-focused fund which is agnostic in terms of the nationality of the founder, as long as they have substantial operations in Africa and are looking to deliver impact in Africa.

In terms of investments, we’re looking to invest over the course of three to six years and to develop the companies that we invest in from four to 10 years. Although we have clear impact metrics and we commit to seeking venture returns for our investors, all our startups have to stand up to commercial scrutiny.

E: Which sectors are you looking at?

HA: There are a couple of verticals we’re looking at, including farming tech, which focuses on allowing farmers to produce higher yields using fewer inputs like water, pesticides, and fertilizers, but also uses those inputs more selectively so they’re less destructive. The second vertical is farmer enablement, which provides farmers with digital tools to access the value chain and give them a bigger share of the pot. The agrifood industry is huge, but farmers see single-digit percentages of that, and that’s causing a flight of talent from rural areas to urban centers. This is a problem because we need digitally-savvy farmers on our farms.

We’re looking at emerging carbon markets, which is a bit more speculative. We like the transition to nature and biodiversity credits, and we think there will be a constructive outcome when it goes through the shakeout it’s going through now, and that it will spur a new sub-economy that is nature-positive.

And we’re also looking at agrifood tech, which introduces new food groups to human food and animal feed chains. We’d like to see some food groups that are currently imported at an enormous expense substituted with more sustainable, home-grown, lower carbon footprint, lower planetary footprint food and feed. Some of these cost-effective and nutrient-rich food groups can be injected into the economy and have an immediate climate and economic impact.

E: Tell us more about these sustainable food groups.

HA: There are a few mn people today who knowingly eat insects and insect derivatives, and a couple of bn more — including you and I — who unknowingly eat them. Insects are the largest phylum in the animal kingdom and should form a much larger part of our diet because they are a very efficient, low-cost, low-carbon footprint source of protein. They will be a substantial part of our diet in Africa, it’s just a question of which cohort of players will tap into this space. There are already engaged players in Egypt, southern Africa, East Africa, and West Africa.

Substituting animal feed with insect- and worm-based derivatives would cut significant emissions related to growing, harvesting and transporting crops like corn and soy. Farming insects and worms has a much smaller footprint and it can be done locally, so you would immediately reduce the footprint of animal feed. On top of that, insect protein, when fed to fish, shrimp, and poultry substantially improves their immunity, because of the phytochemical — bacteria-busting — properties of insects and worms. That’s why they exist, because they digest waste and bacteria and help us to fight disease.

E: How are agrifood and agtech impacting traditional agriculture practice and how far-reaching are their impacts?

HA: I don’t know what the trend is, but I know what the opportunity is. African agriculture produces somewhere between a quarter to half the yields of comparable crops elsewhere in the world and imports 50-70% of its food. If African farmers have access to more money, they can invest in their farms, improve yields, drive down costs, and improve their bottom lines. This means that they will want to employ even more sustainable, high-tech, potentially regenerative ways of farming and increase their yields further and get into a positive cycle as opposed to the negative one they’re in right now. They can potentially double or quadruple Africa’s food output and reduce those imports by an average of 50%, and maybe feed a whole Africa on top of it with a whole new set of food groups. That’s an opportunity to chase.

We see climate risk as a threat to food systems globally, and Africa is particularly vulnerable. Not only is our own farming being disrupted by climate, but there’s also a risk that when the countries that export to us have their climate moment, we’ll be the first countries that they drop off their dispatch sheet. We need to be prepared for that moment. That’s the threat and that’s the opportunity.

E: A report (pdf)by the Clean Energy Business Council last year found that MENA is falling behind on climate tech funding. Is that changing?

HA: I can tell you that over the past five or six years, Africa and the Middle East have attracted less than 1% of agrifood startups funding. Most of Africa is arable and 50-60% of its population is employed in agriculture, so there’s no reason why Africa should attract such a small percentage of startup agrifood funding.

Africa’s share of agri-tech startup funding is only 1%, and that’s an all-time high. But there is evidence that that is about to change. In India and Latin America, agrifood tech startup funding peaked shortly after fintech peaked and we are now in our fintech moment, so it makes sense that agrifood should follow.

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