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Agrivida seeks $20m for feed additives commercialization, research in Series F

Animal nutrition-focused company's chief executive says private equity firms are investigating opportunities to combine varied food and agtech investments.

Agrivida has raised $8 million in a Series F funding round that it hopes to close on $20 million by the end of the year, according to the animal nutrition-focused agtech company’s chief executive.

Led by a $3 million commitment from the Open Prairie Rural Opportunities Fund, the financing round was finalized last week and saw Agrivida secure capital from ARCH Venture Partners, Cultivian Sandbox Ventures and Syngenta Ventures, among others.

Chief executive Dan Meagher told Agri Investor that the round brought Agrivida’s total capital to around $75 million, including research grants that came at the company’s early stages.

Meagher said efforts to raise the additional $12 million by the end of 2019 would be likely to focus on potential venture capital and strategic investors that Agrivida was already in contact with.

“The feeling was that having a first close brings strength to the commitment internally, to make this second add-on go a little bit faster and a little bit more effectively,” he said.

Agrivida is headquartered in Village of Four Seasons, Missouri. It produces feed additives for poultry, aquaculture, swine, beef and dairy cattle markets that use a proprietary protein expression process rather than fermentation.

As part of its focus on producing enzymes, Agrivida owns proprietary corn seeds that are grown in a closed-loop system. The company collects the harvest from growers before grinding it into a feed additive and then selling it on to feed integrators.

“We believe there is a next generation of economic efficiency and it’s showing in seed conversions and bodyweight-gain on broilers,” he said. “That is where we have focused our first attention. We look to do it in layers, in turkeys as well as swine – they will all have different value propositions.”

The Series F funds will be largely devoted to advancing commercialization of Agrivida’s existing GRAINZYME phytase technology and bolstering the company’s long-term research and development efforts.

Meagher added that consumer concerns continued to drive many priorities in the feed additives market. He highlighted the search for alternatives to antibiotics as a specific concern currently driving many research programs.

Pivot to bio

In August 2015, Agrivida raised $23 million in a Series D fundraising, in which Cultivian Sandbox was the company’s lead investor. Agrivida had already raised $12 million in a previous round in January of that year. In September 2016, Agrivida went on to raise an additional $20.4 million in a Series E round, in which the lead investor was the $45 billion University of Texas Investment Management Board.

Meagher said that Agrivida began as a venture focused on ethanol and biofuels, and that its shift towards animal health happened as he joined the company in late 2013.

He said the fundraising environment surrounding agtech has changed significantly in the years since. As well as more sector-focused venture capital and increased attention from strategic investors, Meagher has seen private equity firms expressing interest in agtech companies at earlier stages of their development.

Agrivida itself, Meager said, had attracted interest from private equity firms. He explained that although such investors generally look to invest in businesses already producing revenue, the fact that Agrivida has secured regulatory approval for its offerings helps to reduce perceived risks.

“Private equity, as it relates to the food and agtech sector, is really thinking broadly on umbrella plays,” Meager said. “There are so many unique technology opportunities out there, I think they are looking to strategically piece some of them together under a larger play. That’s pretty attractive to them.”