September 27, 2017

Boston-based bioagtech startup Indigo Ag continues to reach new funding benchmarks – announcing the first closing of $156 million in its Series D funding. The round included Flagship Pioneering – Indigo’s founder and flagship investor; the Alaska Permanent Fund, and new investors Baillie Gifford and Activant Capital.

Indigo, which was originally created within Flagship’s in-house incubator VentureLabs, is working to answer the need of feeding a booming world population of 9.7 billion by 2050 through microbial research.

Over time, agricultural methods including the use of insecticides, herbicides, fungicides, and fertilizers have increased agricultural output, but yields have plateaued in recent years, with average annual yield increases of just over one percent. In addition, these methods have disrupted plants’ beneficial microorganisms, or microbiome, in the same way that science has learned that antibiotics can disrupt a human’s beneficial microbiome.

Using cutting-edge technology, Indigo identifies beneficial microbes that naturally exist within plants. The company then isolates and applies these microbes to crop seeds resulting in greater resilience in the face of a range of stressors including drought, pests, and diseases, and higher productivity. Initially, the company focused on microbes that help plants thrive under water stress, but has since broadened its focus to build out a portfolio of products that help plants under a range of growing conditions, including microbes that improve nitrogen uptake and efficiency in row crops.

“Together with growers across the globe, we have the potential to not only impact an industry, but to fulfill a larger vision of a world where nutritious food is transparently sourced and resources are conserved for future generations,” said David Perry, president and CEO of Indigo. “Indigo’s offer to growers is key to our path forward because it focuses on their own profitability, the foundation on which this vision rests.”

An Eye Overseas

This funding, which by itself surpasses the combined capital raised in the other 17 bioagtech startup deals in the first half of 2017, and makes Indigo the highest valued privately held tech company of the year so far, follows one year after Indigo announced it had closed on a $100 million Series C led by Alaska Permanent Funds and including Flagship Ventures, members of the company’s board and management, and other unnamed previous investors.

Total funds raised by the startup now exceed $300 million, and the company, which recently opened its first international offices in Argentina and Australia, states that this latest tranche of capital will be used to establish itself in key global agricultural regions, to expand its team, and to deepen its expertise and accelerate its overseas business.

Last year, Indigo announced that after isolating and testing beneficial microbes on crops across three continents throughout three growing seasons, the company had conducted cotton trials that resulted in a 10 percent increase in yields in the face of environmental stresses including drought conditions, indicating the potential for improvements in productivity and economic return.

This success led the company to announce last year the launch of its first commercial product – Indigo Cotton™, which was planted on more than 50,000 acres across five U.S. states. This was followed by the company releasing Indigo Wheat™ –  which after being planted in 2016, resulted in average yields increasing by nearly 16 percent, reflecting a per-bushel premium of 43 cents. Maintaining its momentum, the company also has plans to begin production of Indigo Corn™, and Indigo Soybeans™ in the coming months.

Aside from the success of its technology and the savings it can place back in farmers’ pockets, another factor behind the success of the company is its unique pricing and business model. Rather than requiring farmers to purchase its products before seeing results in their operation, Indigo agrees to assume the upfront costs, and take approximately one third of the profit that its technology generates upon harvest, reported Tech Crunch.

“With climate change an active threat, consumers are calling for a new environmental standard in the agriculture industry and beyond,” said Dr. Mehmood Khan, Indigo’s Board Director. “Indigo is responding to this call by developing a paradigm in which growers are able to respond to these consumer demands while increasing their profits.”

-Lynda Kiernan