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How an Israeli Fund is Planning to Commercialize Research at Scale

November 29, 2016

“There is a lot of bureaucracy and big workloads within research institutions; it takes a lot of time to build partnerships with them and contracts for the licensing of technology produced by them,” says Ohad Zuckerman, managing partner of Copia.

Zuckerman should know; for 18 years he was president and CEO of Zeraim Gedera, a vegetable seed and biotechnology company that was acquired by Syngenta in 2007.

Since then he’s been on the board of various agriculture technology companies including Philoseed and Ilan Bio, and he’s the chairman and co-founder of UniVerve, a microalgae outdoor cultivation technology company.

Most people working in the agriculture technology space — and other tech markets for that matter — are aware of the gap that exists between university research and sellable products. Commercializing technologies out of universities is notoriously difficult for a combination of reasons, but Zuckerman believes it mostly comes down to communication.

“Usually, the discussion between academia and industry is not smooth,” he tells AgFunderNews. “Academics talk about genes and ideas, and businesses talk about margins and market share.”

“We used to finance R&D projects all the time at Zeraim Gedera and it would take several months to get to only the second draft of an agreement; the timeframe of a research institution and a business is just different,” he adds.

Zuckerman and his colleagues at Copia believe they have found a solution to successfully fill this gap and produce competitive investment returns at the same time, however.

Instead of creating agreements for every technology they come across, Copia has signed a framework agreement with the Volcani Institute near Tel Aviv to enable access to any project and researchers at the institute and a quick engagement process.

The fund then plans to act as a go-between researchers at Volcani and industry partners that want to create the products from that technology, participating in any upside from sales.

How does it work?

Copia does not invest in companies; it finances specific research and in return gets an exclusive global license to sell that technology.

With that research it then finds a suitable industry partner to further develop the technology and turn it into a product.

These industry partners range from the ‘Big 6’ to smaller second and third tier players across the globe.

There are three potential revenue streams from this.

  1. a sub-licensing fee from the industry partner involved
  2. royalties on any product sold from the license
  3. an exit fee if the commercial partner seeks rights to the patent.
Ohad Zuckerman

“Our role is to make sure the researchers and the industry partners are speaking the same language,” says Zuckerman. “We control, monitor and bridge those relationships and gaps, and we make sure there’s a clear product profile for the technology, with both the research program and the development program aligned to that profile.”

This type of model is nothing new in agriculture technology; Flagship Ventures’ portfolio companies generally come out of universities, and AgTech Accelerator aims to commercialize research too. But even John Dombrosky, CEO of AgTech Accelerator, recently admitted that it takes time for relationships with universities to develop into commercial potential.

Also, Copia is planning to do this at scale — 50+ investments type of scale — in a way others haven’t. To do so it is employing members of its network to help manage its investments.

These “project leaders” will generally be freelancers without full-time jobs and will be paid hourly by Copia or take part in any upside from a technology at exit, according to Zuckerman.

“Project leaders are an important part of our operational model,” he says. “It enables us to get top professionals working with our technologies thereby increasing the number of projects the fund can invest in. All the guys we have recruited are people I have worked with before and will be well known in the market.”

What types of technology is Copia looking for?

The fund wants to deal with three main global challenges in food and agriculture:

  1. Climate change adaptation
  2. Food shortages
  3. The negative impact of agriculture on the environment

“It’s important that any tech we enter should be two to four years from a product, which means they already have a proof of concept and the researchers have a sense of where the tech can go,” says Zuckerman. “However, the final product design and the implementation, which are determined by the industrial partners, needs to be translated into research language, and this is where Copia gets into the picture.”

Copia has a five year investment period.

What investments has the fund made to-date?
  • Bio-nematicide against root-knot nematode, estimated to cause 14% of all worldwide plant losses
  • Bio-pesticides against phloem pathogens responsible for citrus greening
  • Breeding tools for water-saving and crop enhancement
  • Crop protection & post-harvest shelf life extension with Endophytic fungi
  • Breeding tools for increasing biomass production using sugar metabolizing enzymes
  • Disposable device for the slow release of bio-stimulants

Copia has raised a small portion of the $20 million targeted in its first close, but is yet to draw it all down, and is targeting $50 million overall.

Do you have a novel fund structure? If so, get in touch! Email [email protected]

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