• Traditionally, agriculture investing has been a very small portion of the life science VC dollars (less than $100 million annually). Despite this, small agricultural biotechnology companies have contributed disproportionately to today’s genetic-engineering technologies (herbicide and insect resistance).
  • Recently, the rise of “cleantech” investing has increased the interest in agricultural biotechnology. Cleantech investing includes areas such as sustainability, food security, water, and biofuels/biorefining. All these areas have agriculture as a significant player. The recent IPO by Ceres, several recent acquisitions, and a growing interest in the needs for improved agriculture have all increased the interest of some VC groups.
  • Corporate VC groups have become a much stronger player in funding innovation. Corporate balance sheets are strong and large companies are using VC as part of an innovation strategy. Examples in agriculture include:
  1. Monsanto recently announced an alignment with Atlas Ventures in Boston as well as its investments in Nidas Capital.
  2. Syngenta has a new venture fund based in Research Triangle Park, North Carolina, and a previous $100 million commitment to LSP Bioventures in Boston.
  3. Dow Agrosciences recently started a New Ventures group, and Dow Ventures has dedicated agriculture resources.
  4. BASF ventures has become more active in renewable energy, providing $40 million to Renmatix, a company that converts biomass into sugars.
  5. BP Ventures has made investments in agricultural biotech companies Chromatin and Mendel.
  • Several factors are contributing to some life science funds looking more closely at agriculture investments. These factors include: the need for more food and protein globally, increasing commodity prices, and the role of agricultural feedstocks in bioprocessing and biorefinery endeavors. New funds include:
  1. First Green Partners—$350 million (Doug Cameron and Warburg Pincus).
  2. Cultivian (Ron Muessen focusing on the Midwest).
  3. Finistere Partners (Jerry Caulder with funding from New Zealand).
  4. Physics Ventures, DBL, Venrock, Mayfield, and Polaris continue to be interested in agriculture.
  5. New agriculture investments include NexSteppe and IPOs by Ceres. Acquisitions of Divergence and Pasturia (for new nematicides) as well as last year’s acquisition of Athenix by BayerCropScience are examples of continued interest in the area.
  • Specifically related to pesticide research, the major agricultural chemical companies are still the drivers of innovation, primarily due to their significant in-house expertise, infrastructure for chemical process development, and deep grower relations. New trends include increased innovation around seed coatings, new herbicide resistance genes for dicamba, 2,4-dichlorophenoxyacetic acid (2,4-D), and HPPD inhibitors.

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