Head of R&D at Bayer Crop Science Explains Startup Strategy As New Incubation Space Opens in Sacramento

Today Bayer marked the formal start of a collaboration with the Greater Sacramento Economic Council (GSEC) to help identify promising startups across the agtech space and offer them a space to develop at Bayer’s biologicals research facility in West Sacramento, CA.  The startup incubation space named the CoLaborator, will offer 3,000 feet of space for startups with the potential to use Bayer’s testing fields and greenhouses.

Biome Makers, an ag bioinformatics startup for the wine industry, is the CoLaborator’s first tenant and another is Joyn Bio, the joint venture between Bayer and Boston startup Ginkgo Bioworks, full details of which were revealed this week.

Bayer is also collaborating with the University of California, Davis to provide dedicated facility support for university-affiliated startups — particularly those in the areas of agriculture and food-related technologies.

The Crop Science CoLaborator is Bayer’s third incubator facility, joining the West Coast Innovation Center in Mission Bay, San Francisco, and the R&D Center in Berlin, Germany.

We caught up with Adrian Percy, global head of R&D for Crop Science at Bayer on the sidelines of the World Agri-Tech Innovation Summit, to discuss the company’s open innovation strategies in the area of biologicals and novel crop inputs.

What led to the decision to launch the CoLaborator?

We’re really excited about what’s going on right now in the innovation ecosystem that has developed over the past few years. We want to play a role in that, we want to be visible, and we want to help young companies get to the next stage in development. In West Sacramento we have our own research facility working on vegetable seeds and biologicals research. We’ve created a 3,000 sq. ft. space there that we’re going to use to welcome young companies to come in for a period of time. We’re going to provide them with equipment, perhaps some greenhouse space to help them get from where they are today to the next stage and hopefully as they grow they’ll move out into bigger and better facilities and we’ll bring in the next company. We’re not associated directly with these companies, we’re just acting as a platform to help them develop, but of course, we’re interested to see how they move forward.

What’s in it for Bayer?

First of all, like many companies, we’re very, very interested in understanding what’s going on in the sector — looking at the different types of companies that are emerging and trying to assess for ourselves what is the relevance of those companies. Are they companies we would like to partner with? Are they companies we would like to acquire? Are they companies bringing innovation that we need to think about because it could be disruptive?

Are you looking to make equity investments in the types of companies that will be present at the CoLaborator?

We’ve taken a number of approaches. We don’t believe in a one-size-fits-all approach. We have invested with a  number of venture capital funds. We work very closely with Finistere Ventures, Agtech Accelerator, Radicle — and that’s one model because these guys are very, very well connected. They are really good at scouting and understanding and helping to accelerate young companies. We have done some JVs. Very recently we’ve done a joint venture in Joyn Bio, which is a joint venture with Ginkgo Bioworks, a startup based out of Boston. But we’re also prepared to make some direct investments as well.

Do you think the pharmaceutical model of innovation by acquisition is relevant to the biologicals space?

Yes, of course, I think you can make some comparisons to the pharma industry. Bayer also has a pharmaceutical sector and we’ve seen how things have developed over time. But I don’t think we should just assume that we’re going to follow down the track of pharma and not learn anything from what they’ve experienced because their model has not been so successful. You see companies moving away from internal R&D investments and bring in innovation from the outside, but there’s still a fair few companies that do not have a strong platform. I think there are other models as well. What we really like to see in our sector is the opportunity to work in adjacent areas.

I think one of the cool things about that is we’re not just selling individual products nowadays to growers, we’re selling services. We’re selling solutions to issues in the field, which requires collaboration between different sectors in our own industry. For instance, we’re working with Bosch on a smart spraying approach with our chemistry. Bayer is not an equipment manufacturer, it doesn’t want to be an equipment manufacturer, but we’re very, very open and interested in working with equipment manufacturers to bring new products to the marketplace.

With the various emerging discovery platforms and technologies that take a different approach to developing new inputs, are we coming into a new wave of biologicals that could make the old wave obsolete? 

I do see that with some modern biotech tools we have the potential to dramatically increase the efficacy of a biological. The big issues that we’ve seen in biologicals is that level of efficacy, shelf-life, and predictability of how the biological is going to work in different types of environments.

I do think some of the new biotech approaches can really help take those biologicals to a new place, but I also see that what we’ve done so far, which is basically through isolating biologicals from under the soil, understanding the genetic traits that they have, and matching that to plant traits that we’re looking for and then developing a product that really significantly increases yield is also successful and I don’t see that going away. But for certain uses and certain geographies, these other techniques will become relevant.

What is the state of the whole ag retail supply chain in terms of the unique requirements that biologicals have in terms of format and storage?

There is obviously a lot of work to do. Not every retailer is equipped to deal with products that need to be refrigerated, which have a relatively short half-life, but we’re seeing this evolve over time because the interest in biologicals is very high and there are a lot of proven products out there right now. At the same time, companies like Bayer will be trying to do whatever they can to enhance shelf life and to make sure that those products can be stored in an easy way just like a chemical would be. We work directly with retailers and distribution on those things.