Seven start-ups have been selected as the fifth agtech cohort of a collaboration between Wells Fargo and the US Department of Energy that began in 2014 with a focus on sustainability of commercial buildings.
The Wells Fargo Innovation Incubator (IN2) is funded by the Wells Fargo Foundation, co-administered by the US Department of Energy’s National Renewable Energy Laboratory’s (NREL) Innovation and Entrepreneurship Center, and partnered with the Donald Danforth Plant Science Center in St Louis.
Its latest agtech cohort was announced in mid-July and included St Louis-headquartered crop insect control product provider Impetus Ag; InnerPlant, a Davis, California-headquartered seed technology provider; and Sentinel Fertigation, a precision nitrogen management software company headquartered in Lincoln, Nebraska. The companies will each receive up to $250,000 in non-dilutive financing to support field testing and technical assistance.
“It’s like putting a scientist on your team for a while and using equipment that you’d never be able to afford to use as a start-up,” Trish Cozart, IN2 program manager and director of NREL’s Innovation and Entrepreneurship Center told Agri Investor. “We’re de-risking these companies for investment through the projects that they do with these world-class scientists.”
It was after seeing some initial success in its collaboration on start-ups focused on sustainable construction materials, Cozart explained, that the group decided to expand its focus. After convening a group of outside advisers that included investors within its network, IN2 decided to expand into sustainable agriculture companies focused on mitigating and adapting to the impact of climate change on global food systems.
Cozart has served as a program manager of the IN2 program since 2018 and been with NREL for 14 years, according to her LinkedIn profile. She said the IN2 program has helped facilitate field testing with growers within its network. Although NREL does not formally certify any of the startups’ offerings, Cozart added, it does help validate the quality of their work for investors and other observers.
No single subsector has dominated among the companies selected by previous IN2 agtech cohorts, she said.
“It’s been a little bit all over the map, which is great because there are many challenges,” said Cozart. “We’re seeing more in carbon capture. That market is starting to bubble up and we’re seeing more in that area that are starting to apply, which is great. All along we’ve seen some biologics and soil health.”
IN2 reports that including the 26 agtech start-ups selected in this year’s and previous cohorts, the 72 companies active in the program have raised a combined $1.8 billion that is equivalent to $97 for every $1 provided by Wells Fargo. Cozart explained NREL has maintained an industry growth forum for more than 20 years that includes investors eager to stay up to date on its work.
“They [investors] know we are picking and working with great companies and they want to know who those are so they can take a peek. They also want to know what NREL is up to in terms of new research,” she added. “Investors are always interested in that.”
Cozart observed that although the IN2 collaboration began with a focus on building materials, its expansion into agriculture comes at a time when the sectors face similar challenges and investors in its network have expressed growing interest in ag. Support from programs such as IN2 can be an important step, she added, toward overcoming difficult science and engineering challenges that can often keep private investors away from innovative new sectors.
“The agriculture world, the buildings world, the mobility world and every other world, and the entire world, is a system. We’re seeing all of those things come together and need each other,” she said. “The innovations are across sectors.”