March 16, 2021

By Michelle Pelletier Marshall, Global AgInvesting Media

A fairly new player in the agtech and food tech sector, yet one with big visions and bold strategies and purpose, Germin8 Ventures prides itself on using technology intervention to provide food security and productivity with a focus on optimizing environmental sustainability and human health. Put more simply, it is a purpose-driven venture capital firm determined to fix the broken global food system, albeit in digestible chunks.

With a focus on investing globally in top tier disruptive food tech and agtech companies across the value chain – think Brightseed, CropX, Bushel, Enko Chem, Fieldin – in various stages, Germin8 Ventures’ core investment and advisory team scours the world for opportunities that will make a noticeable change in the trajectory of food sources, food production, and food innovation.

With seven high-profile investments to-date and average contributions in excess of $2 million towards each company, Germin8 is positioned as a high ROI partner leading the way in supporting innovation in technologies, business models, and policies that facilitate major shifts, even beyond the scope of food and agriculture.

GAI News caught up with its founder and managing partner Michael Lavin, whose passion for agriculture was fueled at an early age, and whose fire was stoked through extensive work with several accelerators and incubators in the sector, as well as broad experience as an investment banker and M&A strategist. 

1). Let’s start with your company name – Germin8 – which I find very interesting… curious as to how you came up with that?

I’m glad you asked about it. People seem to really like our name. And I’ll tell you, it took maybe half an hour of brainstorming to decide on this name for the firm. It was probably number five or six on the list and right as I wrote it in my journal, I knew I didn’t need to make the list any longer. I just decided, that’s it. This makes us sound a lot more like a startup than a venture capital firm. And we’re doing things differently so we should have a brand that speaks to that and be something that resonates with both entrepreneurs and founders.

2). Germin8 has made several investments since its founding in 2017, from a $4 million raise for Israeli agtech startup Fieldin to a $45 million series B in Boston-based Enko Chem, led by The Bill and Melinda Gates Foundation, in June 2020. You’ve talked of making one to three investments a year – what’s your mission surrounding this goal?

We like companies that we view as winner-takes-all opportunities, where if they’re successful, they are essentially a monopoly for the solutions they’re bringing to market.

Take our first investment in Fieldin, whose technology offering radically improves upon the economics of their farmer customers, establishing new budget wherewithal for those same farmers to now invest in the next agtech innovations they want to bring onto their farm. It’s almost as though Fieldin, in this respect, is an innovation chassis, if you will.

And we’ve invested again and again into Fieldin, which is the norm throughout our portfolio. We always reserve two-thirds of our capital for follow-on and remain a committed partner. That’s really important to us. And we’re very proud to say that, in each of our companies that has raised a subsequent round, we’ve done at least our pro rata in every one of these rounds. In the case of Fieldin and Brightseed, we were so bullish on the companies that we even arranged a special waiver from our investor group to allow us to go beyond our diversification cap to invest in these companies again. We’re fortunate to have such a supportive investor base.

We are extraordinarily committed, very high conviction investors. We are very thematic investors. We spend a lot of time developing our own internal theses and calculus to identify the breakthrough innovations that would really move the needle in terms of our clear impact goals, and also catalyze the next order of innovation that compounds the impact and important shifts. We believe that is the most transformational type of investment to make, though finding them at the right time with the right founders is seldom.

Most of the startups that we see in the sector, while they have merit and we’re very happy that they exist, they’re just not going to move the needle for profound impact, or transform on a meaningful scale, which is one reason why we invest in one to three investments per year. The other reason is that we spend an extraordinary amount of time with our portfolio company founders and their teams, and you just can’t do what we do with a portfolio of 25 or 50 companies.

3). Most of your investments have been in the tools that make farming easier – crop protection, AI-enabled smart farming platforms, soil sensing, etc. Is there a place in your portfolio for up and coming regenerative ag solutions, cellular food, and biogenetics?

I acknowledge that we do indeed love tools and platforms – it goes back to the points that I just made that our investments be in these areas of innovation, where if it’s successful, it creates an entire new space for others to exist on top of those innovations and innovate themselves. So in effect, creating the Moore’s Law pace of innovation in agtech and food tech is what we’re after.

Take our investment in Brightseed Bio – this is a computational biology platform where they’re using AI to reveal the natural world of plants and its bioactive compounds that they’re calling phytonutrients, and how they map to human health outcomes, particularly in the areas of chronic disease, but also other important health and performance indications. This platform is creating knowledge and giving food companies an opportunity to tap that intelligence to revitalize and better align their portfolios with health objectives. We believe companies like this are the pinnacle of food as medicine, an area that is evermore a priority for Germin8.

Additional platforms of interest include those mapping the human microbiome, or even the soil microbiome and broader on-acre ecology, for that matter. Also, next gen bioengineering tools are of great interest and we are intensely exploring some emerging breakthrough spaces therein.

We’ve had a very busy year. The first 10 days of 2021 showed an immediate increase in deal flow velocity, and the pace has not slowed down at all – it still seems to be accelerating. So while there’s a lot that we’re constantly reviewing, there’s probably only a handful that we’re presently devoting due diligence resources to. One of them is in the microbiome space, another is a microbial solution aimed at soil regeneration with notable human health benefits too, and a third is an emerging sequencing technology in the omics space.

4). Your chief scientific officer, Dr. Ashlie Burkart, is a double-boarded anatomic and clinical pathologist skilled at investigating the causes and nature of gastrointestinal diseases. Does this key research come into play in determining your next portfolio addition?  

Yes, absolutely. She’s instrumental in a lot of the opportunities that we’re looking at right now, particularly in the areas of life sciences, but also microbiome and food as medicine. She’s a world-class pathologist in GI and liver health and also has a background in neuroscience, which is the gut brain microbiome axis. On a personal level, she’s very curious with a brilliant mind and a capability to quickly pour over large amounts of research and identify the viable pathways for impact. Then collectively, we work as a team to confirm feasibility and venture worthiness. She also brings a diverse skill set as no one on our team comes from the medical world quite like her, though we do have advisors with notable successes at the intersection of health and food.

5). How has the pandemic changed the way in which Germin8 seeks partners and funds?

We are still collaborating with our usual network, always making new friends and being a good colleague to many in the ecosystem. Whereas some investors may have slowed down a bit when the pandemic first hit or retreated from investments altogether, it seems like most have come off the sidelines, and that is very positive for the sector.

It’s also good to see that there are a number of new entrants, because as I’m sure you’re very well aware of, agtech and food tech investing is in vogue, even though it remains relatively undercapitalized. There are always new funds forming; and that’s very telling.

6). What’s Germin8’s determining factor(s) for timing exits, and ensuring ROI?

First of all, there are really no guarantees in life in general, let alone returns, especially in a class [agtech] that is not yet matured as an asset class, since a track record of proven repeatable, well reasoned and justifiable exits yet is still developing. Certainly there are exits, but the frequency of these exits is not, in my opinion, common enough yet to really be considered a fairly predictable asset class, and the acquirers are still viewed as being somewhat of a small group. But I do think once private equity and other strategic participants start engaging in this area from an acquisition perspective, then it starts to turn into an asset class for sure.

Additionally, these are high risk investments, and potentially high-return, high-reward investment opportunities, particularly since we focus on the early stages. This risk-paradigm is one reason why we don’t look to invest in the technologies that are just incremental or novelties, because we need something much more than that to deliver high impact returns, as well as outsized financial returns, to make that risk worthwhile.

In terms of timing for the exits, we understand that this is a space where patience is very important. That being said, Germin8 tends to prioritize companies that could potentially exit within a relatively short few years from our first check, particularly on the software side. But on the deep science side and particularly biology, we’re realistic those are potentially on longer return trajectories. Each investment has their own unique characteristics so we try to balance that as best as we can. We do have a fund life of 10 years and try to generate returns within that timeframe, with a reasonable cushion, if possible. So far, I feel really good about what we’re doing.

The work our founders and their teams do is inspiring, on the cutting-edge, and it’s incredibly purposeful. I’m thrilled to work for our founders and consider them an extension of the team. The field is one on the cusp of a revolution. On the back of these innovations, the global food system is poised to look profoundly different for the next century or more, touching the global population. In that sense, you can say we have 8 billion clients today, going to be 10 billion by 2050. Agtech and food tech is the single most important lever for feeding the world, regenerating the earth system, and creating prosperous economic growth for the producer stakeholders who are laboring to put food on our table. This is the best job I’ve ever had.

ABOUT MICHAEL LAVIN

Michael Lavin founded Germin8 Ventures to be a purpose-driven venture capital firm with strong strategic backing from executives, entrepreneurs, visionaries, and technologists across the food and agriculture industry. As founder and managing partner, Lavin oversees all aspects of Germin8’s investing, operations, and strategy, as well as actively participates on the boards of invested companies. He also is an advisor, mentor, and member at several accelerators and incubators, including Rabobank’s TERRA Accelerator, Alchemist Accelerator, the Techstars Farm to Fork Accelerator, 1871, The Good Food Accelerator, Family Farmed, and The Hatchery.

Lavin’s experience includes extensive investment banking and consulting for clients ranging from early-stage startups and the middle market, to the Fortune 500 across numerous industry verticals, with particular emphasis on industrial technology, aerospace, and food & agriculture. He also served on an executive team, leading highly-strategic internal corporate development advisory and M&A for Mesirow Financial, a global financial services firm managing more than $100 billion of assets.

~ Michelle Pelletier Marshall is contributing editor and writer for HighQuest Group’s GAI News and Oilseed & Grain News, and managing editor for its WIA Today blog. She can be reached at mmarshall@highquestgroup.com.