Ospraie Ag Science was among the investors in a $35 million Series B closed in late August by agricultural analytics provider Pattern Ag.
The round was led by Continental Grain venture arm Conti Ventures and included existing investors such as San Francisco-headquartered venture capital firms Founders Fund and The Production Board, among others.
Emeryville, California-headquartered Pattern uses what it calls the largest metagenomics dataset in agriculture to produce long-term predictions about crop risks and nutrient deficiencies, and inform seed selection and fertility decision-making. The company was founded in 2018 and has raised $60 million to support development of its soil analytics platform.
Ospraie senior agricultural partner Carl Casale told Agri Investor that Pattern’s core predictive screening product is similar to an annual health check-up that allows farmers to be more efficient in their purchases of biological inputs and fertilizer. That focus on providing a “one-stop-shop” to help reduce reliance on traditional inputs, he said, has helped Pattern establish key relationships with farmers, seed companies and trusted advisers that can be difficult for offerings new to the market.
Pattern’s customers pay for annual customized diagnostics that focus on managing key row crop challenges such as sudden death syndrome in soybeans and rootworm for corn. The company says its system will be deployed on more than 1 million acres this year and can boost profits by more than $60 per acre.
“In the case of corn rootworm, a lot of farmers prophylactically will buy a biotech trait package that covers the entire spectrum, including corn rootworm, which is a $25-$50 per acre application,” Casale explained. “If you don’t need that, you’ve paid for insurance that you didn’t need. Imagine if you only had to buy insurance if you knew you were going to have a problem.”
After Pattern collects and analyzes soil samples from its customers, he added, the company is able to extend its research into thousands of new microbes that will inform future machine learning and predictive product placements.
“Your output is largely driven by the volume of the input, so it’s a very efficient mechanism to get your customers to pay you to provide you your data sets to mine, which is very, very novel,” Casale said. “There is nobody else that is doing that.”
Biological inputs such as those Pattern’s analytics focus on were among the sectors examined in a July Rabobank report that highlighted how large corporates through the agricultural supply chain are embracing a new spirit of collaboration in developing novel forms of agricultural production. Casale – whose previous experience includes executive positions with Monsanto and agribusiness co-operative CHS, according to his LinkedIn profile – said large multinationals realize they simply cannot devote resources to early-stage ventures.
“These are so small in the grand scheme of things for a large company that they just don’t get the time and attention, so they basically atrophy,” he said. “The real value that early-stage VC adds to the big multinationals is they can invest the risk capital and, more importantly, the time and attention, to help nurture these.”
New York-headquartered Ospraie’s investment into Pattern drew from the same internally funded vehicle that has sponsored the firm’s previous efficiency-focused ag-tech investments, according to Casale. A vehicle called Ospraie Ag Science had raised $184 million from 74 LPs since its first sale in August 2019 as of an October filing. The firm also invests in commodities and basic industry and managed $494 million across funds and accounts as of December, according to a March filing.