Canadian agriculture biotech company Inocucor Technologies is raising $15 million in equity capital to expand its bio-stimulation and bio-protection agricultural liquid solutions business. Its technology focuses on increasing the quality and productivity of the phyto-microbiome – the seeds, the plants, the root system and the soil around them – through the application of liquid solutions. The company’s president and chief executive, Donald Marvin, shares his views on the biotech for agri industry, the challenges the company faces and its expansion plans.
What does the agriculture biotechnology market look like now and how does this compare to previously?
The ag biological space has only been around for the last eight to 10 years, but it is now rapidly growing as major ag biotech companies are looking for alternative sustainable solutions for the product portfolio. All the major agri investors in this space are making significant investments in biological solutions for agriculture. I call it ag biotech, where you are using a lot of the same technologies and techniques that came from the human biotechnology industry, looking at the plant genome and its effect on the roots and soil.
What has Inocucor’s capital raising experience been so far?
We are in the middle of a $15 million equity raise for the rapid expansion and growth of the company. On our product development areas, our first generation product is now crossing the chasm and gaining broad acceptance across the market, so we are scaling up our marketing and production activities for the next generation of products for bio-stimulation and bio-protection.
Participation in the next round of funding will be from our two major investors, Cycle Capital Management, the clean tech fund based in Montreal, and Desjardins Innovatech, one of the largest investment banks in Canada. We are blessed to have people like that, who have already invested in our company. We are in discussions with venture capitalists, strategic investors and corporate funds for investing in Inocucor. Raising these funds takes time, so you should look for a late summer or early fall closing, perhaps sooner, and we are making very good progress.
Who is Inocucor serving and what’s the user base?
Our-first generation product, Garden Solution, it is currently registered in 27 states in the US and a couple of provinces here in Canada. Its target market is the organic grower and greenhouse growers, as well as conventional farmers for high-value produce such as kale, tomatoes or broccoli. Organic growers out there often finish our own sentences when we describe our products, that’s how familiar they are with Garden Solution and what it does. For conventional farmers, if they see a product that gives them an increasing yield and fast maturity, they uptake our product very well, too. Our products are really not tied to being organic or conventional. We have five or six sales managers on the ground marketing the first generation, we also have a couple of distributors for the product in the US as well.
Our second-generation product, which is a cell-free bio-stimulatory product, is targeting mainstream production agriculture. We have a number of filed trials going on for corn and soybean in Canada and a few collaborators in the US as well. The second generation product will hit the market in a year and the third generation, the year after.
What are the challenges you see in the biotech for agri industry?
The overall challenges for biotechnology in the agricultural industry are the regulatory hurdles, how you protect your technology and the access to good talent and investment capital.
Our first-generation product is registered at a state level. As we move into the succession of future products, some will be registered at the state level and others might have to go through US Environmental Protection Agency, which is technically a three- to four-year process and a several million dollar investment before launching the products.
In the phyto-microbiome space, which is the area we are in, you cannot patent naturally occurring microbes or their by-products here in the US because of regulations. This forces companies to rethink their patent strategies on how they protect technology.
Also, certainly, the access to really good talent and capital to grow your business is a challenge everyone faces.
What is your expansion plan?
Right now, we are focusing on North America, which is a huge market. In three or four years, we could expand to South America because of the dual primary growing seasons in the area. As a small but rapidly growing company, we think we need to focus on markets that are close to our home base. Obviously, we have an interest in taking our product to the global market in Europe and Asia and we have been approached by a number of people in those regions to work with us. But, we will focus on North and South America for the time being. Chile, Brazil, Argentina will be our major markets in South America.