Seed, grain, and agribusiness giants Monsanto, Bayer AG and The Andersons are among the companies establishing their own venture capital investment units to fund innovations in agriculture, agtech, and other sectors as a way of gaining access to cutting edge tools, technologies, and data that can be applied to the production of food.
In 2012, Monsanto created Monsanto Growth Ventures as a way to identify and capitalize on innovative developments that Monsanto didn’t currently have a hand in and to bring the company closer to entrepreneurs and scientists on the leading edge of innovation. The unit also helps Monsanto target worthy acquisitions, including the 2013 $930 million acquisition of Climate Corp. that has become the company’s cornerstone in its precision ag services.
In February of this year Bayer partnered with Finistere Ventures and AVAC Ltd. to form a new $150 million fund with the goal of financing agtech startups that could take advantage of Bayer’s knowledge, networks and infrastructure to advance technologies for future food production.
In the same month, Syngenta’s venture capital arm helped lead a $7.3 million round of financing for bioagtech firm AgriMetis LLC, which is working on commercially synthesizing naturally occurring molecules to arm crops against pests. And in January, Ohio-based grain company, The Andersons launched a new venture capital fund of its own with planned investments of between $500,000 and $5 million each in innovations advancing precision ag, fertilizers, and food safety.
These financing units are also proving particularly advantageous to startups in the sector, where, because of the slower pace of agricultural research and development, entrepreneurs in agriculture and agtech can be somewhat cautious of working with non ag-related financiers who are looking for a quick exit.