Not a startup anymore: Benson Hill, with 155 employees and $133M in funding, fights to maintain the entrepreneurial spirit that helped make it successful
Nov. 1, 2019
Agtech firm Benson Hill may be the darling of St. Louis startups, but it didn’t start out that way.
“For the first three years, we were a fledgling little startup,” said CEO Matt Crisp. “I could never imagine we would be where we are.”
In 2015, three years after it was founded, the St. Louis-based ag startup had little more than a dozen employees working to launch its crop design software platform, CropOS. Today, it employs 155, about 40% of whom have joined the company in the past three months.
Fueling that growth is a remarkable $133 million in funding, including a $65 million Series C round announced a year ago led by GV, the venture capital arm of Google. It’s also inked partnerships with industry giants such as Anheuser-Busch and Mars Inc., while cementing St. Louis as its home earlier this year with the groundbreaking of a new headquarters on the campus of the Donald Danforth Plant Science Center in Creve Coeur.
Benson Hill is moving at a pace that few, if any, St. Louis startups have ever encountered. That sort of rapid growth raises the question: Is it still a startup?
“I’m almost at the point where I’m not using that word,” Crisp said.
The recent moves by Benson Hill highlight not only a company in high-growth mode, but also one in the midst of a key transition. What once was a “fledgling little startup” is now taking on a new identity and starting to shed that startup label.
It’s a critical transition point for a fast-growing company, and one that comes with a challenge of its own: How does it scale and implement the structure necessary to operate a large company while retaining its entrepreneurial spirit?
Maintaining that startup spirit is key to Crisp because it sets Benson Hill apart.
“We think you can have structure and processes and systems that allow us to execute and deliver great products while remaining an innovative mindset and culture in ways that larger, more established companies might not be able to,” he said.
But, he cautions, striking a balance between scale and culture isn’t solely about having a competitive advantage. It’s also about harnessing in the future what has propelled the startup to where it is today.
Even a good idea takes a long time to sell to investors, particularly in fields rooted in science, which is why Crisp and his fellow co-founders, the Danforth Center’s Todd Mockler and Tom Brutnell, didn’t close a Series A financing round until 2015, when it raised $7.3 million.
“I wish I could say there was some master plan behind that,” said Crisp. “When I say fledgling, I mean we were scraping around for money. In retrospect, science-based organizations, R&D-based organizations especially, that are very early stage, sort of get humbled in the market.”
It’s certainly found its footing since. Benson Hill, since its founding, has raised $133 million, including an additional $33 million in capital raised since closing the $65 million Series C last September. The key to drawing capital was typical to that of most technology-based startups: validation.
“I’d say we got capital when we started to see that (our) technology worked,” Crisp said.
The agtech startup’s CropOS technology is designed to identify the most promising genetics within a plant to produce a targeted outcome, whether it be higher crop yields, better tasting crops or crops produced using significantly less water when compared with traditional breeding methods.
Anheuser-Busch InBev, for example, uses CropOS to develop higher yielding barley varieties that use less water and other natural resources. Mars Inc., with brands like M&M’s, Snickers and Dove Chocolate, has tapped it to improve productivity of the cacao tree used for chocolate.
That approach toward crops is what made Benson Hill so attractive, said Dan Broderick, vice president of BioGenerator, the St. Louis-based agtech booster organization that led the company’s initial seed funding round in 2015. Broderick saw Benson Hill as a way to increase crop yield that didn’t necessarily involve the use of fertilizers, herbicides or insecticides.
“What Benson Hill’s approach was and is, is to try to use genetics to increase the intrinsic yield in a plant, which means you use the plant to grow bigger ears of corn, more soybeans on the stem, a bigger sugar content in sugarcane,” said Broderick. “But it’s the plant that’s doing that. It’s not the environment that’s doing that.
What also makes Benson Hill attractive is an ability to fill a gap in the market, said Stephen Case, a professor in the department of crop sciences at the University of Illinois. While agriculture giants Bayer and Corteva have invested heavily in technology, Case said second-tier firms have lagged on innovation.
“Benson Hill filled that void,” he said. “These smaller companies did not have the personnel, the infrastructure – either computing or personal-wise – to apply those technologies.”
Andy Wheeler, general partner at GV, has been aware of Benson Hill since its earliest days. But his firm, the venture capital arm of Google parent Alphabet Inc., didn’t invest in the company until 2018. What changed was an emerging trend: Wheeler noticed consumers were demanding more nutritious and better tasting food.
As Benson Hill’s technology evolved, so did its emphasis on broadening its application toward those trends
“Once (Matt) came back with that story, I realized this could be a much broader and bigger company,” said Wheeler, now a member of Benson Hill’s board.
Finding the puzzle pieces
Crisp used to call each of Benson Hill’s new hires before they started with the company. The half-hour calls would touch on the startup’s vision and values while providing a chance for new employees to ask questions.
It was one of this favorite things to do as CEO.
But as the company has more than doubled in size in the past year, the phone calls are no more. They stopped last fall.
Crisp now takes a small group of new hires to lunch shortly after they begin employment. It’s a small change, but emblematic of Benson Hill’s rapid growth and how it’s trying to preserve aspects of its startup culture.
“If you grow really quickly, it’s just this difficult sort of puzzle to put together,” said Kelly Fischer, Benson Hill’s vice president of people. “Like how do you sustain the culture? How do you continue to focus on talent and not lose sight of that, not get too sidetracked by results?”
Fischer, a former Express Scripts executive, joined the company in August and has focused on building infrastructure around the company’s talent engagement and integration efforts. Part of that includes emphasizing leadership development, skills building and workforce planning as the company looks toward the future. But Fischer’s priorities also include helping Benson Hill sustain its startup culture.
Startups are often admired for their agility, openness to new ideas and a strong sense of purpose. Those are assets Benson Hill doesn’t want to lose as it moves beyond the startup stage.
“It’s a hard thing to do, and I think culture in general needs to be driven not just from the top down, but the bottom up,” Fischer said. “It’s something employees have to feel and help create.”
Like Benson Hill, St. Louis-based Varsity Tutors has also experienced the rapid ride from startup to larger corporation. The company has raised $107 million in funding and employs 650 people full-time, and over the years it has adopted the sort of operating discipline that wouldn’t exist at an early stage startup.
Yet CEO Chuck Cohn still refers to Varsity Tutors as a startup, even if the term no longer fits its size.
“Being a startup means being innovative and it means being flexible and means moving quickly,” Cohn said. “Those are things that we always want to do, regardless of how big we get.”
Benson Hill’s early years were critical in validating its technology platform, but that period also served as an incubator of a culture that’s now embedded into the company and is shared with new employees as they are brought on board.
“You can’t force culture. You can’t call an all-company meeting and tell people what the culture is,” Crisp said. “It sort of has to continue to live and breath.”
The culture Benson Hill is fighting to maintain includes an emphasis on innovation, yet as companies grow they face becoming less agile or losing the ability to risk failure, Fischer said.
Crisp said it’s important that, as Benson Hill grows, it maintains the sort of nimbleness that allows employees to experiment with new ideas.
“We try to create space for smart people to think about how they can innovate in ways that might be unorthodox or outside of the box and considered a little bit crazy,” Crisp said. “And give them an opportunity to do things that maybe you don’t get to do in a big company or a more rigid environment or something where there’s more prescriptive R&D approaches.”
Startups have business plans and exit strategies, but unknowns are also a key part of their existence. As Benson Hill grows beyond a startup, it still faces an element of uncertainty.
Growth is in its long-term plans. Just don’t expect Crisp to lay out a strict five-year or 10-year blueprint.
“I just think we’re in a place right now where we’ll grow, but it will be the byproduct of additional achievements,” he said. “What does that ultimately look like? I don’t mean to sound clueless, but I couldn’t really tell you. If we continue to achieve good things, we will continue to grow.”
Nevertheless, the company is still targeting a series of milestones. Benson Hill anticipates doing one more private financing round in the next two years with the expectation that it will take the firm to profitability. Longterm, an eventual initial public offering is “likely in the cards should the stars align.”
And moving forward, to reach the vision that Crisp has for Benson Hill, shedding the startup title will become a necessity.
“To achieve what we want to achieve as an organization takes longer than a career cycle,” Crisp said. “If we really build the company we want, we’re going to be talking about something that lasts many generations.”
As it strives toward that vision, Fischer said Benson Hill is likely to reach “inflection points as an organization where you have to actually work differently.” That might be instituting new programs, reworking processes and shifting decision-making power in the company.
“If you miss that, you end up being a larger organization with a leadership team that’s still hands-on and in the lead, and employees end up feeling frustrated and not empowered to do work,” Fischer said.
Benson Hill also has to avoid becoming a victim of its own success, GV’s Wheeler said. That requires focus.
“You’ve got so many potential opportunities sitting in front of you. It can be really tempting to try to go after too many of them,” Wheeler said. “Because if you get too diffuse and try to do 20 things, you’re probably not going to be successful.”
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