Fortissimo Capital Takes $4M Stake in Tech Seed Breeder
October 26, 2017
Israeli private equity fund Fortissimo Capital has committed $4 million to the third funding round raised by Israel-based high-tech seed breeding startup Equinom. This investment marks the first installment of Fortissimo’s total investment.
Equinom’s last funding round occurred in April of last year when the company raised $1.25 million led by Hazera Ltd – a seed and field crop specialist.
Founded in 2012 in Givat Brenner, a kibbutz near Rehovot, Equinom’s specialized breeding process involves the integration of DNA sequencing data and phenotype data with algorithms developed by the company that are designed to identify the parts of the seed’s DNA with particular breeding value. This process forms the foundation of a breeding process that allows the company to breed non-GMO seeds with a higher level of precision and speed than through traditional methods.
“Equinom’s proprietary developments make it possible to improve the probability of success of challenging plant breeding programs 10-fold, without changing the budget and while halving the program’s schedule compared with regular methods,” Equinom CEO Dr. Gil Shalev told Seed Today last year. “Our algorithms enable us to identify and select genes with the objective of breeding varieties with maximum market value.”
Forefront in the company’s production are high-protein, non-GMO legumes and sesame seeds for oil and tahini. Through this technology, the company has developed legume seeds including pea, chickpea, and cowpea that contain 50 percent more protein that common commercially available varieties, and sesame seeds that produces a crop that lends itself to mechanical harvesting – two important distinctions.
Global protein consumption is expected to climb at a CAGR of 1.7 percent, reaching 943 million tons by 2054, according to Lux Research. Over this same time period, alternative protein sources are forecast to command up to a third of the protein market. Equinom’s development of non-GMO legume varieties that surpass typical legume protein content by such a large percentage places the company in an enviable position to capitalize upon consumer trends.
“Using the technology developed by Equinom, we significantly increased the level of protein in legumes and are contributing to creating market conditions that will eventually lower the cost of legume-based protein and creating food alternatives based on sustainable, non-GM sources,” said Shalev.
Meanwhile, although sesame production is an $8 billion business per year, traditional sesame varieties require manual harvesting, a factor that usually limits its production to third-world regions where there exists a low-cost labor force. The development of a high-yielding sesame seed that can be mechanically harvested would open up whole new worldwide geographies for producers.
Equimon’s sesame is currently in a pre-commercial stage in the U.S. and Australia with expectations for market entry in 2019. And its technological advances have led the company to secure multiple breeding contracts with global food companies, and to forge a cooperative breeding agreement with Obela – a joint venture between PepsiCo. and Strauss Group Ltd. that will use Equinom’s proprietary technology.
“The investment from Fortissimo gives Equinom financial backing, allowing us to both continue accelerating the development of seeds and their commercialization in the U.S. and Australia,” said Shalev. “Equinom continues to create new plant-based proteins, and I believe that we are only a few years away from introducing new products that will allow the creation of the world’s future foods on a mass-market scale.”
For Fortissimo – a fund that invests in both private and public tech businesses that have existing products with proven sales, a steady revenue stream in a high-growth market, and that display the potential to be a segment leader with an experienced leadership team – Equinom’s work represents the future of food production, according to Yuval Cohen, founder and managing partner of Fortissimo Capital.
“Equinom has proved that with the implementation of groundbreaking, non-GMO technology, it is possible to achieve what was once considered impossible in seed breeding. Fortissimo is committed to stand by Equinom on the journey to realizing the company’s vision of creating the foods of the future.”
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