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Monsanto Growth Ventures, Otter Capital lead $24M Series C for NewLeaf

July 12, 2017

Agricultural biologicals company NewLeaf Symbiotics announced it has successfully closed a $24 million Series C co-led by Monsanto Growth Ventures (MGV) and Otter Capital, and also including Lewis & Clark Ventures, Rockport Capital, Pangaea Ventures, and Open Prairie Ventures among others.

 

Since its launch in 2013 through the Bio Research & Development Growth Park at the Danforth Plant Science Center, NewLeaf has conducted cutting-edge research and product development centered around pink pigmented facultative methylotrophs (PPFMs) – a naturally occurring family of beneficial bacteria that consumes the methanol produced as a waste product of plant metabolism, and secretes critical plant nutrients that provide critical energy to support plant growth, vigor, and extend the window of crop protection, according to the company website.

 

Based on this science, NewLeaf Symbiotics has developed its Prescriptive Biologics™ technologies that include breakthrough seed treatments, in-furrow applications, and foliar sprays that can complement traditional inputs to reduce the need for traditional agri-chemicals.

 

“The application of these bacteria in agriculture has tremendous potential to enhance yields and improve plant health,” said Ryan Rakestraw, venture principal with MGV Venture. “We are excited to partner with NewLeaf to support the advancement of this differentiated technology.”

 

NewLeaf states that extensive studies have demonstrated that the inclusion of PPFMs in agricultural production have resulted in healthier and more vigorous crops, higher yields, greater biomass, more extensive root systems, and higher levels of chlorophyll. Trials involving PPFMs have already proven successful on corn, soybeans, peppers, barley, sugar cane, lettuce, spinach, rice, tomatoes, and cotton, and the company expects that significant benefits will be realized through PPFM technology in the production of all row crops, vegetables, and fruits.

 

Ryan Rakestraw noted at GAI AgTech Week 2017 how critical exhaustive scientific studies are to the success of a new agtech technology.

 

“For me the lesson learned is how are you going to show that the tech works in the field. I think the lesson is going to market too quickly – either on the bio side or tech side,” said Rakestraw. “I think the companies that have spent the time to do the field trials over years to show the product works – those are the companies that have the most success.”

 

Bio-Logical

 

Just as so many global CPG food companies have created venture units designed to invest in startups that tap into rapidly shifting consumer tastes and demands, Monsanto’s MGV has deployed capital in support of biologicals, as consumers and environmentalists continue to push for less use of traditional agrichemicals in the food supply chain.

 

Expectations are that the biofertilizer market will grow at a compounded annual growth rate (CAGR) of 14.08 percent reaching an estimated market value of $2.3 billion by 2020, while the agricultural biologicals testing market is expected to grow at a rate of 10.4 percent, reaching a value of $1.1 billion by 2021, according to Markets and Markets. In addition, the biostiumlants market is projected to grow at a CAGR of 10.4 percent, reaching a value of $2.9 billion by 2021, with the area of application expected to grow at a CAGR of 11.7 percent, reaching 24.9 million hectares by 2021.

 

Combined with consumer sentiment, numbers such as these speak to the nascent potential for return on investment in the biologicals space.

 

Investment Activity

 

In November 2015 MGV led a 5.7 million Euro Series A for Spain’s PlantResponse Biotech that also included Caixa Capital, Middleland Capital and Novozymes.

 

Founded in 2008 by Professor Antonio Molina and Professor Pablo Rodriguez Palenzuela as a spin-off of the Universidad Politécnica de Mardrid, PlantResponse has developed a portfolio of biological products that are sourced from plants and microorganisms which strengthen a crop’s response to both biotic and abiotic stresses while improving yield.

 

A year later, a partnership between Novozymes and Monsanto called The BioAg Alliance, announced the launch of the world’s first upstream corn inoculant, Acceleron B-300 SAT.

 

Derived from a fungus found naturally occurring in soil, Accleron® B-300 SAT has proven to impart a two-year average yield advantage of more than three bushels per acre and was  applied to all of Monsanto’s new corn hybrids sold in 2017.

 

“Harnessing the power of nature’s microbes, farmers will be able to produce more crops while using fertilizer more efficiently and producing less CO2. This will benefit agriculture, consumers and the environment,” said Colin Bletsky, Novozymes’ Vice President for BioAg last December.

 

Other leaders in the biologicals space include Inocucor Technologies, which most recently announced the close of a US$29 million Series B led by TPG Alternative and Renewable Technologies (TPG-ART) – a late stage growth equity venture vehicle managed by alternative assets firm, TPG. Other investors in the round included Closed Loop Capital, Desjardins Innovatech, and Cycle Capital Management.

 

Using technology similar to that used in winemaking, Inocucor incorporate multiple strains of yeast and bacteria to produce biological solutions that improve seed germination, shorten necessary growing time, and improve crop yield through the building of healthier soil.

 

Meanwhile, last October Metalmark Capital made an unspecified capital investment in Valagro – a global leader in the production and commercialization of biostimulants, micronutrients, foliar fertilizers, and fertigators for agricultural production.

 

For NewLeaf this Series C will help the company solidify its standing as a leader in the emerging category. The company plans to use the funds to back the commercialization of its seed treatment and in-furrow products for soybeans, corn, wheat, peanuts and other crops; to fund the tripling of its R&D and pilot production facility in St. Louis, and to expand its proprietary Prescriptives Biologicals Knowledgebase™ bioinformatics platform.

 

“Agriculture is undergoing deep technological and structural change,” said Tom Laurita, CEO of NewLeaf. “This investment affirms the importance of biologicals and validates NewLeaf’s strategy in this emerging space. Industry consolidation is reshuffling the major players and we are working closely with several of the most forward-looking companies to integrate our products and technology into their product platforms. We are grateful to our current and new investors for their support.”

 

 

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration please contact Ms. Kiernan at lkiernan@globalaginvesting.com.

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