Agricultural Biologicals Report
Introduction:
Agriculture is the growing and cultivation of crops and the rearing of animals for food consumption or other purposes. Agricultural biologicals are products derived from natural materials.
Situation:
This sector deals not only with how the food we eat is grown from organic materials but also extends to the treatment of sewage and refuse that can be used as organic manure for crops. Indeed this sector interlocks with other sectors in the food production industry and since food production is of vital importance to the survival of man, the sector is developing more and more ways to implement biotechnology so as to fight the food shortage menace.
Problem:
There are a couple of problems faced in this sector ranging from personal ideologies about how food should be grown and how animals should be treated, but a conclusive list is given below:
Political Role: Politics play a major role in every facet of the economy including this one. There is a trend of involvement from major political parties and their supporters in the way agricultural products are being used and produced. This problem is one of the strongest bane that rocks the industry.
Climate and Water Change: This plays a huge role in affecting the productivity of this sector. Global warming and over flooding are major issues that rock this sector as the trend shows that politics even plays a role here too.
Regulatory Clarity: Like every major industry that affects all walks of life, this problem extends to this sector. The regulatory bodies have instituted a lot of unclear rules about the organic growing of food (and animals too) which is a big turn off to worthy investors. Of course these rules are rather genuine as they were instituted to protect the “natural integrity of food” but they is a need to make them clearer and less ambiguous.
Inconsistency in education / outreach to stakeholder communities: Stakeholders do not know enough about this sector and this is because of the inconsistency in reaching out to them. Only a few know about this sector and almost all of them are willing investors.
Biased opinion/debates on organic food production
Implication:
Political Role and Climate and Water Change: As water and climate change issues take on an increasingly prominent role in political discourse, the ability of these new products and technologies to enhance nutrient use efficiency and the related benefits to reducing nitrogen and phosphorus runoff to watersheds and nitrous oxide emissions will be important in improving crop yields while simultaneously reducing the environmental impacts of agriculture, all of which will be important to consumers, growers, and government regulators.
Inconsistency in education / outreach to stakeholder communities: The lack of outreaches to reach investors is killing the sector. But if there’s a consistent program, this will be an important part of liberating the technology and driving adoption for both streams of these development pipelines.
Regulatory Clarity: If the rules aren’t set, they’ll be an inconsistency in production and response from investors. This scares willing investors as most won’t invest in an unclear market. As soon as the rules become clearer, the trend shows that more people would invest.
Need Payoff:
300+ companies in the sector, 50+ funded in last 5 years, $840M invested in 2016/17. Most The most active investors are Syngenta, Cultivian Sandbox, Middleland Capital, Arch Venture Partners, Fundo Criatec. The sector is divided into 3.
They are:
Crops: Companies in this sector develop biological products either for crop protection or for crop nutrition in open field agriculture. There have been 117 companies founded in the last 8 years with an overall funding amount of $717M.
There are 3 subsectors here:
Crop Nutrition: Companies developing microbial products for crop nutrition and plant growth stimulation.
Horizontal: Companies developing biological products for both crop protection and crop nutrition.
Crop Protection: Companies involved in the development of crop protection biological products such as bio pesticides, beneficial insects etc. Also included are companies developing biological for mitigating abiotic stresses and improving yields.
2. Horizontal: Companies in this sector develop biological products for various domains of agriculture such as crops, livestock animals, and aquaculture. There have been 12 companies founded between 2008 and 2016, with an overall funding amount of $397M.
There are 2 subsectors here:
Developers: Companies involved in the development of biological products for various domains of agriculture including crops, livestock animals, and aquaculture.
Enablers: Companies developing tech platforms to enable delivery of microbial solutions and nutrient molecules to the plants or agriculture animals (ruminants, birds, swine and fish).
3. Livestock and Aquaculture: Companies developing biological products for livestock farming and aquaculture industries. There are 21 companies founded in the last 8 years with an overall funding amount of $202M.
There are 3 subsectors here:
Feed Additives: Companies involved in the development of biological feed additives and feed supplements for livestock and aquaculture farms.
Horizontal: Companies developing biological feed additives for livestock animals as well as biological products for manure and water treatment in livestock and aquaculture farms.
Waste and Water Treatment: Companies developing products for water or manure treatment in livestock and aquaculture farms.
Interesting Companies are:
Indigo (2013, Cambridge): They’re involved in delivery of selective plant microbes through seed coatings for resistance to biotic and abiotic stresses. Their major investors are: Flagship Ventures, Alaska Permanent Fund with a funding amount of $163.5M.
Zymergen (2013, Emeryville): They combine synthetic biology, machine learning to engineer industry relevant microbes to manufacture chemicals and new materials. Major investors are: SoftBank, AME Cloud Ventures, Draper Fisher Jurvetson, True Ventures, Innovation Endeavors, Data Collective, Iconiq Capital, Obvious Ventures, Two Sigma Ventures, Linden Mobile Ventures, Mission Bay Capital, HVF Labs, Prelude Ventures, Tao Capital Partners. With an overall funding amount of $174.14M.
Conclusion:
A list of the future trends are given below:
Europe: High growth is expected in the agricultural biologicals industry.
Agricultural biologicals market is projected to grow at a CAGR of 12.76%.
Bionematicides market to grow at a high pace globally (2016-2022).
Since this report covers only companies that are investing in organic products, it will be safe to assume that only millennials and organic minded people are caught up in this but that’s not true either, this sector attracts a lot of people who are concerned about the depletion of the earth’s resources and wish to find better alternatives thus making this sector an eye catching sector.
References:
Advances in Agricultural Biologicals Report.
Tracxn Report, April 2017.
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