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3.7 The Role of Venture Capital (VC)
The 1980s and 1990s saw a flurry of entrepreneurs developing their proprietary plant
biotechnology innovations through newly formed startup companies. Venture capitalist
investment followed the successful strategic partnerships that startups formed with
major seed companies, and the first wave of successful exits resulted in acquisitions by
the multinationals who became keen to internalize the innovative discovery programs of
the startups. However, by 2010, plant biotechnology startups had thinned, venture capitalists had become wary of the long development timelines associated with transgenic
crops, and the multinationals had taken advantage of the historically high seed prices of
2008, 2011, and 2012 to invest in and develop their own formidable internal programs.
Another realization started to set in: beyond the initial biotech traits conferring herbicide
tolerance and insect resistance, agricultural biotechnology’s holy grail of increased
drought tolerance, yield, and fertilizer use efficiency would require harnessing complex
multigenic traits. Model plant systems were largely inadequate to tease out the complex
requirements that would result in a successful trait without pleiotropic effects. Interests
shifted, and new areas of innovation started to make it to the foreground. The soil and
plant microbiomes became an innovation target.
For millions of years, plant and soil microbes have coexisted and benefitted from
each other. Microbes decompose organic matters and make nutrients such as nitrogen
and phosphorus available to the plants, and the plants supply the carbon needed by the
bacteria to survive. In 2009, Bayer Crop Science announced its new VOTiVO™ biological seed treatment, which makes use of beneficial Bacillus firmus bacteria to protect maize, soybeans, and cotton against nematodes. In 2012, Syngenta acquired the
startup Pasteuria Bioscience, with which it had partnered since 2011. This was followed in 2013 by the launch of Clariva pn, Syngenta’s first biological nematicide seed
treatment, which contains spores of Pasteuria nishizawae, an obligate parasitoid of
soybean cyst nematodes. The race was on! Bayer acquired California-based AgraQuest
in 2012; Monsanto announced a deal with Torrey Pines, CA-based Synthetic Genomics
and formed the BioAg Alliance to commercialize microbial products for agriculture
with Denmark based Novozymes, the world’s largest enzyme producer, both in 2013.
The next few years were a golden age for VC and startups in the biological space.
Bayer purchased Argentinian Bioagro Group in 2014 and announced a research collaboration with St. Louis, MO-based Elemental Enzymes in 2015. DuPont acquired
Taxon Bioscience, a Tiburon, CA-based startup focusing on industrial microbes; and
Dow AgroSciences entered a collaboration with UK-based Synthace Ltd., both in
2015. In 2016, Monsanto’s corporate venture group invested in California-based Pivot
Bio and North Carolina-based AgBiome; in 2017 it led a financing round in St. Louisbased NewLeaf Symbiotics. In 2017, Bayer announced a new partnership with Ginkgo
Bioworks to develop microbial products that would stimulate nitrogen fixation in
plants, and DowDuPont announced a collaboration with Arysta LifeScience and a
multi-year collaboration with Israel-based Evogene, to develop microbial seed treatments for maize.
10
10 http://www.etcgroup.org/sites/www.etcgroup.org/files/files/info_brief_microbial_and_bayermonsanto_0.pdf - Accessed 8/25/2019.
M. L. Müller and H. Campos
3.7 The Role of Venture Capital (VC)
The 1980s and 1990s saw a flurry of entrepreneurs developing their proprietary plant
biotechnology innovations through newly formed startup companies. Venture capitalist
investment followed the successful strategic partnerships that startups formed with
major seed companies, and the first wave of successful exits resulted in acquisitions by
the multinationals who became keen to internalize the innovative discovery programs of
the startups. However, by 2010, plant biotechnology startups had thinned, venture capitalists had become wary of the long development timelines associated with transgenic
crops, and the multinationals had taken advantage of the historically high seed prices of
2008, 2011, and 2012 to invest in and develop their own formidable internal programs.
Another realization started to set in: beyond the initial biotech traits conferring herbicide
tolerance and insect resistance, agricultural biotechnology’s holy grail of increased
drought tolerance, yield, and fertilizer use efficiency would require harnessing complex
multigenic traits. Model plant systems were largely inadequate to tease out the complex
requirements that would result in a successful trait without pleiotropic effects. Interests
shifted, and new areas of innovation started to make it to the foreground. The soil and
plant microbiomes became an innovation target.
For millions of years, plant and soil microbes have coexisted and benefitted from
each other. Microbes decompose organic matters and make nutrients such as nitrogen
and phosphorus available to the plants, and the plants supply the carbon needed by the
bacteria to survive. In 2009, Bayer Crop Science announced its new VOTiVO™ biological seed treatment, which makes use of beneficial Bacillus firmus bacteria to protect maize, soybeans, and cotton against nematodes. In 2012, Syngenta acquired the
startup Pasteuria Bioscience, with which it had partnered since 2011. This was followed in 2013 by the launch of Clariva pn, Syngenta’s first biological nematicide seed
treatment, which contains spores of Pasteuria nishizawae, an obligate parasitoid of
soybean cyst nematodes. The race was on! Bayer acquired California-based AgraQuest
in 2012; Monsanto announced a deal with Torrey Pines, CA-based Synthetic Genomics
and formed the BioAg Alliance to commercialize microbial products for agriculture
with Denmark based Novozymes, the world’s largest enzyme producer, both in 2013.
The next few years were a golden age for VC and startups in the biological space.
Bayer purchased Argentinian Bioagro Group in 2014 and announced a research collaboration with St. Louis, MO-based Elemental Enzymes in 2015. DuPont acquired
Taxon Bioscience, a Tiburon, CA-based startup focusing on industrial microbes; and
Dow AgroSciences entered a collaboration with UK-based Synthace Ltd., both in
2015. In 2016, Monsanto’s corporate venture group invested in California-based Pivot
Bio and North Carolina-based AgBiome; in 2017 it led a financing round in St. Louisbased NewLeaf Symbiotics. In 2017, Bayer announced a new partnership with Ginkgo
Bioworks to develop microbial products that would stimulate nitrogen fixation in
plants, and DowDuPont announced a collaboration with Arysta LifeScience and a
multi-year collaboration with Israel-based Evogene, to develop microbial seed treatments for maize.
10
10 http://www.etcgroup.org/sites/www.etcgroup.org/files/files/info_brief_microbial_and_bayermonsanto_0.pdf - Accessed 8/25/2019.
M. L. Müller and H. Campos