German agribusiness Bayer CropScience and Ginkgo Bioworks, a startup genetically engineering microbes for the flavor, fragrance, and food industries, have partnered with hedge fund Viking Global Investors to invest $100 million in a new, as yet unnamed agtech startup.
The new company will focus on manufacturing microbial products to help with nitrogen fixation and minimizing agriculture’s environmental impact by decreasing the amount of chemical fertilizers farmers apply to crops.
“The endophytic microbes to be developed by the company aim to provide a platform to flexibly deliver new agronomic advantages. This is expected to have a profound positive benefit to growers, agriculture and society alike,” reads a press release from Ginkgo.
The new company will be co-located at Bayer’s biologicals R&D facility in West Sacramento, which was created through the 2012 acquisition of AgraQuest, and at Ginkgo’s Boston facility, along with a new Boston facility yet to be built.
The former CEO of AgraQuest and current vice president of strategy in Bayer’s biologicals division Mike Miille will be interim CEO of the new company. Two representatives from Ginkgo Bioworks – Jason Kelly and Reshma Shetty – and two representatives from Bayer – Axel Bouchon and Juergen Eckhardt – will join the board of directors.
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According to a spokesperson from Ginkgo, the new company will not compete with Bayer’s existing biologicals business.
“The R&D efforts are complementary – different approaches, different targets, different product concepts, but both focused on meeting grower needs with microbial solutions,” she told AgFunderNews.
The new company will own its own IP, and both Bayer and Ginkgo have transferred IP to the company. The eventual plan is to sell product and not license the technology to other companies. But Ginkgo confirmed that the products produced by the new entity would not be exclusive to Bayer distribution.
This is not the first time Ginkgo has partnered with an agribusiness major; last year the group partnered with Cargill to explore strain improvements to optimize Cargill’s bioindustrial fermentations.
Ginkgo declined to say how the $100 million in funding was split among the players, nor if there are plans to bring in additional investors in the future.
The new biotech company is the fifth investment by the Bayer Lifesciences Center (BLSC), which operates as a strategic innovation unit within Bayer and directly reports to Bayer’s management board. Previous investments by the group include Casebia (CRISPR/Cas technology) and BlueRock (induced pluripotent stem cell technology).
This is not the first agtech investment for Viking, which has invested Trace Genomics, Biome Makers, and Impossible Foods. Viking also led Ginkgo Bioworks’ $45 million Series B round in 2015 as well as participating in its $100 million Series C round last June.