Alaska Permanent Fund leads $100m raise for bio-inputs company

The fund has led the largest-ever agtech private equity investment, into a company that produces inputs to improve crop resistance.

The $54 billion Alaska Permanent fund has led a $100 million investment into biologicals company Indigo, in the largest-ever private equity investment into the agtech sector, according to a press release.

Alaska said it would also contribute equivalent amounts of follow-up funding, a sign that the company could form part of the Alaska Permanent Fund’s longer-term private equity portfolio. The fund has a private equity allocation target of 6 percent.

Venture capital firm Flagship Ventures joined the Series C funding round for the company, which says its microbial inputs dramatically increase crop resistance to stresses like water scarcity.

Indigo, previously known as Symbiota, was founded by Geoffrey von Maltzahn and David Berry and its $7.5 million first financing round was led by Flagship Ventures in 2014.

The equity will go into scaling up commercial operations and expanding Indigo’s line of microbe-based crop treatment products.

In May 2015 the Alaska Permanent Fund expanded its definition for infrastructure to include agricultural and timber investments. The fund’s director of private equities and special opportunities, Stephen Mosely, carried out due diligence on the investment in March. The fund did not respond to enquiries about its risk profile assessment for Indigo.

Indigo says it has tested its microbe treatments on more than a dozen different crops and recently launched its first commercial product, Indigo Cotton. It also hopes to capitalise on the 20 million US acres of wheat cultivated in dry conditions by selling a wheat-inputs product later this year.

Investments in the biologicals space have been growing in size, but the APF-led raise is by far the largest. Canadian bio-inputs company Inocucor Technologies closed on $6 million in extended Series A financing in June, and biological pesticides company Terramera raised $10 million the previous month. Twenty biologicals start-ups in the biologicals space raised $120 million across 20 deals during 2015, according to agtech fundraising platform AgFunder.

Proponents have described the biological inputs space as one which could enhance or even sustainably replace chemical inputs like fertilisers and herbicides.

“Biologicals will form the basis for innovative and sustainable agricultural solutions while answering the need for higher yields. They will compliment, and in some cases could even replace, synthetic chemicals like pesticides.” NewLeaf Symbiotics chief executive Tom Laurita wrote for Agri Investor earlier this year.