Funding is brisk for agriculture technology | February 29, 2016 Issue - Vol. 94 Issue 9 | Chemical & Engineering News
Volume 94 Issue 9 | p. 15 | News of The Week
Issue Date: February 29, 2016 | Web Date: February 25, 2016

Funding is brisk for agriculture technology

Investors flock to start-ups developing plant health and yield-boosting technologies
Department: Business
News Channels: Environmental SCENE
Keywords: start-ups, agriculture, start-ups, microbiome

Investors are finding it hard to resist the huge market for innovations that can feed the world’s growing population. This month, Indigo, a beneficial microbe firm, and ZeaKal, a crop trait firm, attracted funds to help bring new products to market.

Wheeling and dealing

 

$168 million:

Venture capital raised by soil and crop technology startups in 2015

35:

Number of deals

Source: AgFunder

Founded in 2014, Indigo is working to sequence and exploit the natural microbiomes of plants to help crops resist environmental stress and disease. Formerly called Symbiota, the company was created by Flagship VentureLabs, an arm of the venture capital firm Flagship Ventures. Flagship and other unnamed investors pitched in $56 million to boost Indigo’s development of products for corn, soy, wheat, and cotton.

ZeaKal was formed inside the venture capital firm Kapyon Ventures to develop traits that boost yield and oil content of crops. It raised $5.3 million in a second round of funding, led by agriculture investor Finistere Ventures. ZeaKal claims its traits increase plants’ photosynthetic capacity, leading to higher yields even during times of water stress.

Investors in Finistere include Bayer CropScience, which has separately opened a crowdsourcing website called Grants4Targets. Bayer is appealing to researchers and start-ups to find new targets for chemical and biological control of weeds, pests, and diseases.

Young companies are attracting early backing for developments in plant health and yield improvement, areas generally outside the pipelines of big agriculture firms, says Rob Leclerc, CEO of investor research site AgFunder. But they may find it tough to raise larger rounds of funding.

“Major investors are just starting to learn how the agriculture market works,” Leclerc warns. “We may see more activity, but if capital dries up, they may go back to what they know.”

 
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