Sep. 9, 2016
While research on the human microbiome is more prevalent, there are a growing number of startups researching the plant microbiome in the hope of increasing the efficiency of crops.
From their research, these startups are manufacturing products for farmers based on how certain microbes promote the growth of crops, influence the expression of beneficial traits in crops, and deter pests.
These products include biological inputs ranging from fertilizers and pesticides to seed coatings and soil supplements, and they usually aim to enhance or even replace chemical counterparts. The research these startups undertake can also lead to trait development for seeds alongside partners.
Investors are increasingly interested in this part of the agriculture technology ecosystem. During the first half of 2016, investment in soil & crop technology startups reached $161 million, a 290% increase on the same period in 2015, according to AgFunder. This category was dominated by biological inputs companies including two microbiome research startups - Indigo and PivotBio - that raised $72 million between them.
While 2015 attracted a lot less capital into microbiome-related startups, it had one of the sector's most notable deals; a $34.5 million Series B round for a startup called AgBiome.
AgBiome is using microbiome research to manufacture biofungicides and other bio-control products. And the North Carolina-based company attracted investment from The Bill & Melinda Gates Foundation. The Foundation, which usually focuses on making grants to businesses benefitting developing nations, saw potential in AgBiome's bio-control technology to impact smallholder farmers in Africa.
AgBiome's research capabilities center around its discovery and development platform Genesis. Today, the platform has isolated, sequenced and screened over 26k microbes, and discovered several new mode-of-action traits and biological input products in what it describes on its website as "the microbe land grab."
AgBiome claims its proprietary strain collection, which it continues to build through its extensive network of field-sampling partners, is larger than any major, publicly available collection.
This collection is AgBiome's primary resource in the discovery of new biologicals and trait genes. "Unlike many programs, which only use metagenomic surveys, the AgBiome platform is focused on true isolated microbial strains and their fully sequenced genomes, which gives us unparalleled insight into the detailed genomic composition of crop-associated microbes," reads the website.
Those that successfully make it through an intense assay process are then tested in field trials. By integrating sequence data with performance data across multiple assays and field trials, the AgBiome team can identify the most active candidates for products, Tracy Raines, research director at AgBiome, told AgFunderNews.
Just over a year on from the Series B round, AgBiome is close to launching its first commercial product, a broad spectrum fungicide called Howler.
Howler is a living microbe that targets a broad range of fungal and oomycete diseases, which AgBiome claims can be as much as 20 times more effective than existing biological solutions. The company also claims that Howler can replace chemical alternatives in potency, a rare claim as biological product companies usually admit their products can reduce the amount of traditional chemical applied, but not replace it.
"Howler will be a complete replacement for other products," said John Rabby, commercial director. "There are going to be potential holes as it will not control all fungal problems, so we will look at some combination work there, but for certain diseases we are working to replace synthetic alternatives."
Another area of differentiation from other biological products is in the storage and presentation of AgBiome products. According to Rabby, Howler can be kept for up to 18 months in a ready-to-use dry state at temperatures as high at 90 degrees fahrenheit.
"Many other biological products are unstable for long periods of time or at high temperatures," he said. "We are not just working on efficacy, but on products that are more culturally fitting. We are not trying to change the habits of farmers, so a lot of our efforts right now as on ensuring these products fit into their current schedules."
AgBiome will launch the product for the turf and ornamental flower market first, but expects to be registered as a product for food crops in April 2017.
To help commercialize this and other technologies, AgBiome launched a new business unit called AgBiome Innovations and hired a series of high profile people to lead it.
They include Rabby, who joined as commercial director of AgBiome Innovations. He is former group vice president of BASF in North America, CEO of Makhteshim Agan, North America, and executive board member of Crop Life America. Ted Piatt joined as sales director of AgBiome Innovations from Scotts Miracle-Gro and has 35 years of leadership experience in the agricultural and turf and ornamental industries. And from DuPont, Kyle Beery joined at production manager for AgBiome Innovations.
The business has grown elsewhere too and there are now 63 full-time staff, compared to 30 this time last year. And the company is targeting 75 full-time staff by the end of the year, according to Rabby.
Howler is just the beginning on the product front. AgBiome has 110 trials of over 4k treatments out in the field at the moment with partnering farmers and research institutions.
Research partnerships with the likes of Syngenta and Genective, have brought in substantial revenue for AgBiome, enabling it to survive on relatively little external funding. The company has raised $52 million to date, with runway until late 2018, according to Rabby. By comparison, Indigo, which is using microbiome research to produce crop enhancement products, has raised $156 million this year across two rounds.
Further support from the Bill & Melinda Gates Foundation has no doubt helped; last month it awarded AgBiome a multi-year grant to help African sweet potato farmers combat the sweet potato weevil. This is the crop's most serious insect pest, causing losses of 60% to 100% if left untreated, according to AgBiome.
The grant will support the isolation, sequencing, and testing of microbes associated with US and African sweetpotato plants in an effort to discover microbes that are capable of controlling the weevil.
John Hamer, managing partner at Monsanto Growth Ventures, an early investor in AgBiome, put the company's success down to a high-quality team.
"They have an amazing array of seasoned ag investors, season ag board members and seasoned ag management and employees," he told AgFunderNews. "It's big and small company experience; it's ag IPO and ag M&A experience; it's not just another bunch of VCs or entrepreneurs chasing a trend."
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