Case Study: Gullspång Invest and/Gullspång Re:food – getting impact investing right

The following Case Study is from Family Capital and Octopus Investments’ recent report on Family Offices and Venture – download the full report here:

Gullspång Invest is a family office owned by Sweden’s Brandberg family. Their family office was built on the success of Christer Brandberg, an investor and businessman.

The family office sets out to invest in energy, food, water, health and education – and much of that investment is in venture-type startups and businesses. 

Family member Gustaf Brandberg says Gullspång Invest is a family office partnering with entrepreneurs to create progress. “We invest in food, energy, and resource efficiency, and historically, we have also invested in education and healthcare. 

“In 2020, we set up the subsidiary Gullspång Re:food to improve our ability to drive transformative change in the global food system. Gullspång is the biggest investor in Re:food, but since 2021 we also invest other long-term money from a pension fund and entrepreneurial families behind global enterprises.” 

What was the thinking behind setting up Gullspång Re:food? “We had made a few food investments, such as Oatly, and realised the tremendous need – and potential – for change in the food system. While there are other long-term investors in the food and agriculture venture sector, we did not see anyone taking a structured approach to systems-level transformational investments. When I met Peter Odemark, our managing director, with a long and successful career in the food industry and similar observations, we decided to create Re:food together.”

“We have based much of our thinking on the work of the Stockholm Resilience Centre, the Framework For Strategic Sustainable Development (FSSD), and scientific reports on the food system, such as the EATLancet Commission Report. 

“Using our experience in building and scaling global enterprises, we identify the founders of innovative companies at the right leverage point in the food system to drive transformational change and solve structural problems in the food system. We describe this approach in ‘Food is Solvable’, a report we have made available on our website.

“An important detail about Re:food is our evergreen structure; we do not want an artificial end-of-life date impacting our company ownership decisions. Instead, our guiding principle is that we should stay as owners of the company as long as Re:food is the best possible financial partner to the company.”

Gullspang and Impact 

“There is a common misconception that impact investments automatically mean lower financial returns. We have a contrarian view: the world is in dire need of change, and the companies that possess the keys that unlock that change will become immensely valuable. That said, although financial returns are important, they are not our primary driver. 

“Money is the fuel of our investment company, and the more fuel we have, the more entrepreneurs we can help. But, what really motivates us is the vast potential to create a meaningful change in the food system for future generations. 

“Gullspång’s tagline is ‘We partner with entrepreneurs to create progress’. We have always wanted to help solve important problems. The only thing that has changed over the years is the magnitude of the ambition of the companies we back – today, we take much bolder bets.” 

Gullspang and Venture 

“We began as business angels, investing up to a hundred thousand dollars in early startups, sometimes even at the PowerPoint stage. Over time as we exited some portfolio companies, we have been able to invest gradually larger tickets. 

“So, venture-stage investing was in the DNA of Re:food from the start. The only difference from the early days is that seed-stage companies are too early for us. Our sweet spot is now the early growth stage. Our recent investments in Motatos and Planted are follow-on investments as a part of our model to support our portfolio companies over time.” 

Gullspang on direct and fund investing 

“Re:food mainly makes direct investments in companies that have found their product/market fit and have started to scale. As a complement, we have invested in two seed-stage funds, FoodSparks in Europe and FTW in the US, that help us stay informed about the new frontiers in innovation. Still, our fund investments are just a few percentages of our total portfolio.” 

Gullspång’s overall investment decisions 

“Since we get a substantial inflow of opportunities every week, we have, by necessity, built an efficient and structured process to quickly filter out the companies that are not a good fit with what we can offer. The first questions we always ask are regarding the potential for impact. Does this company address a root cause problem in the food system? Does it have a clear strategy for overcoming the barriers to transformative change? Are we sure that it, at scale, will not cause any significant adverse side effects? 

“To determine this quickly, we spend considerable time doing our homework. We have a good relationship with the Stockholm Resilience Centre and other researchers, which help us understand the food system, its hidden connections, and the most potent leverage points for change.” 

Gullspang – levels of investment 

“We usually write checks of five to ten million dollars each, with the capacity to double or even triple down on each investment.” 

Gullspang and secondaires 

“We have a broad mandate and do buy secondaries from time to time. Often it can be a helpful tool to clean up the cap table and set the company up for success.”