Crop protection attracts big dollar amid PE push earlier in the start-up lifecycle

Crop protection and enhancement company Asilomar Bio has secured $12 million in a Series B funding round led by Syngenta Ventures and Cavallo Ventures, the venture capital arm of agricultural and industrial product supplier Wilbur-Ellis.

Combined with a Series A round led by Fall Line Capital and Cultivian Sandbox two-and-a-half years ago, the new capital infusion brings the total funding for the company to $15 million.

Founded in 2013, San-Francisco headquartered Asilomar uses chemistry, genomics, agronomy and data science to develop compounds designed to improve agricultural yields. The Series B capital will be used to launch and market the company’s first compound, which increases the rate at which water moves through plants. The product has been designed for application to row crops and has been tested through more than 200 field trials during six growing seasons, according to the company.

Last month, Koch Biological Solutions announced that it had secured exclusive global rights to commercialize and market products including the compound, which has yet to be given a brand name, for an undisclosed sum.

“If PE groups begin to look to get in a little earlier, they might end up competing with IPOs and established players”
Ron Meeuson, Cultivian Sandbox

Ron Meeuson, a managing director at Cultivian Sandbox who sits on Asilomar’s board of directors, told Agri Investor that Asilomar is developing plant growth regulators that are the culmination of research efforts that stretch back to the 1960s.

At that time, he said, in addition to the fungicides, herbicides and insecticides that had already been developed, researchers hoped to develop plant growth regulators that could protect against abiotic, environmental stresses by controlling flowering time, branching, leaf canopy and other factors.

“There had been a big attempt to develop chemicals that could control the plant’s growth so that we could deal with that fourth big stress and create a fourth category of the crop protection industry,” he said. “It failed dismally and it was abandoned because we just didn’t have the tools.”

PE push

In the years since, according to Meeuson, developments in genomics, chemistry and computer modeling of biochemical pathways have made it possible to produce synthetic and natural chemicals capable of controlling plants’ responses to environmental stress. Cultivian Sandbox’s investment in Asilomar came after it had started testing a product that they had begun developing with support of the Bill and Melinda Gates Foundation, which was interested in the potential to increase drought resistance in Africa.

Meeuson said that it remains true that most agtech companies are hoping to either be acquired by an established agricultural company or enter public markets through an IPO. While private equity investors are typically interested in start-up companies only after they have three consecutive years of revenue, according to Meeuson, recent indications that some relevant firms are dedicating efforts to earlier-stage opportunities suggest a potential change in the role such investors play in the agtech market.

“If PE groups begin to look to get in a little earlier, they might end up competing with IPOs and established players for acquisitions in the ag space, like they have in some other industries,” Meeuson said. “It might be that PE is going to emerge as a third option.”