What AgTech innovation is sparking investor interest?

By Aerin Einstein-Curtis contact

- Last updated on GMT

© GettyImages
© GettyImages

Related tags: Animal health

Crop innovation rather than animal health and nutrition is attracting the AgTech money, says TechAccel. However, it noted some of the leading animal health and nutrition opportunities for venture capital firms to direct some of their money towards.

TechAccel is a venture and technology development firm that focuses its attention on agriculture and animal health. The company looks to support development and “de-risking”​ of novel technologies and works with start-up projects.

We spoke its CEO, Michael Helmstetter, to hear more.

“If you talk to international companies about their priorities [for the next] 3 to 5 years – they’re immediately going to [mention] immunity, building the immune system,” ​he said. 

tech accel map
Tech Accel AgTech Innovation Landscape 2017

One fast-growing niche that touches both animal health and nutrition is aquaculture feed and vaccines, he continued.

“Animal health or nutrition - it is a blended line."

Innovative companies working in that realm include those focused on novel delivery methods for vaccines - oral routes being of real interest - ​or on products that enable farmers to cut down on antibiotic use like bacteriophage cocktails and health-boosting additives, especially in aquaculture, he said. 

Such novelties provide an effective solution to the spread of global disease and the rise of antibiotic-resistant bacteria, said TechAccel.

They also help counter decreases in feed efficiency and animal growth rates as producers reduce the use of sub-therapeutic antibiotics. In addition to animal health benefits, these technologies can have a profound impact on food safety. Integrating health benefits directly into feed or drinking water significantly reduces the cost of goods, improves the ease of manufacturing and decreases the odds of additional dosing, said the company.

Gene editing ​is a tool used to precisely insert, edit, or delete the DNA of an organism. In agriculture and animal health, TechAccel said it also believes breeders could utilize one of several approaches including CRISPR-Cas9, TALENs, and Zinc Fingers to create disease-resistant genes, improve health and nutrition, or enhance performance at a fraction of the traditional time and cost, compared with genetic modification or traditional breeding.

The downstream arena and producer and consumer acceptance of technologies is also an area to keep an eye on in regards to investment in AgTech, continued the CEO. "It is one of the biggest factors as we do our due diligence."

Crowded spaces

However, there are some animal health and nutrition subject areas that are swarming with NPV, said Helmstetter,

The company is continuing to evaluate research or products developed to address or manage the microbiome. However, at this point, there are so many claims being made it can be hard to determine which technologies are adding value, he added.

“We are still looking at the microbiome and biologicals,” ​he said “But it has become a hot area so it’s getting crowded – it’s the same thing as precision agriculture and drones. We’re kind of stepping back right now and watching the dust settle.”

Animal health and nutrition underappreciated by funders

So while there are some specialized investors in agriculture and animal health and nutrition, initially it is the crop production work that is attracting the funding, he said. “The money going in is crop related – rather than for the animal health start-up,”​ he added.

A recent TechAccel blog posting underlined the need for more venture capital investment in animal health.

The firm’s manager of investments, Brett Morris, wrote: “We believe animal health and nutrition is an under-appreciated sector in terms of venture funding. Most life science investors focus on the human space due to the larger market, while some dedicated agtech venture capital funds are restricted by their limited partners from investing in animal health altogether.

“The industry also requires specific expertise that most generalist investors do not possess. TechAccel believes there are niche opportunities to leverage the application of human health technologies in animals. If the investment structure is clearly defined up-front, investors can obtain synergies from the data collected, and use a shorter, less costly animal health opportunity to generate liquidity.”

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