Madrid-based Plant Response Biotech has closed a $6.6 million Series A led by Monsanto Growth Ventures, with participation from private investment firm Middleland Capital, Spanish early stage multi-asset investment firm Caixa Capital Risc, and industrial biotech company Novozymes.
The Spanish crop protection company plans to use the funding to launch new products and accelerate the deployment of its existing crop protection lines into commercial markets. Between now and 2018, the company hopes to increase its market share in the $957 million Spanish agrobiological market. Plant Response estimates the market is growing at an annual growth rate of 15 percent.
It also hopes to register and launch novel products and to build out the company’s R&D team and technology pipeline.
Co-founded in 2008 by two researchers, PlantResponse Biotech originated at Universidad Politécnica and now specializes in developing and commercializing biological strategies for crop protection capacities. Targeting plant genes that improve the productivity and health of specific crop species, the researchers have found a way to boost the plant’s resistance to pathogens and multiple types of water-induced stresses. The agrobiological company focuses on identifying and developing new molecules and traits that regulate plant responses to biotic and abiotic stresses.
The company has developed an extensive portfolio of biological products centered around two key areas: Biological products derived from plants and microorganisms that improve crop vigor, and enhance crop resistance to biotic and abiotic stresses; and plant genes (traits) for crop breeding to develop new varieties with increased yield and resistance to stresses.
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Plant Response Biotech has an exclusive worldwide license to its initial technologies and has its eye set on developing the next wave of innovative plant protection technologies at the global level.
“We are happy to be able to support the commercialization of great ideas and technology that has been generated by leading European labs,” said Kiersten Stead, a venture principal at Monsanto Growth Ventures. Stead will also join Plant Response Biotech’s board as chairman.
Middleland’s managing director Scott Horner added: “The technology being developed within Plant Response is world class. We look forward to working with the company to realize the benefits of their products on global agriculture.”
Agriculture biotechnology has seen rapid growth in recent years, with many entrepreneurs, investors, and farmers showing curiosity over the science’s potential advantages. But what exactly is ag biotech?
According to the US Department of Agriculture, agricultural biotechnology “is a range of tools, including traditional breeding techniques, that alter living organisms, or parts of organisms, to make or modify products; improve plants or animals; or develop microorganisms for specific agricultural uses.” This definition encompasses biotechnology used in genetic engineering, which is one of the most hotly-debated topics on consumers’ and food procedures’ minds these days.
The hot debate surrounding agricultural biotech hasn’t hampered the ability of researchers and developers to secure private investment, however. According to a report from the USDA’s Economic Research Service (ERS), private-sector R&D spending in ag input industries increased over 40 percent between 1994 and 2010. In 1994, investment in ag input R&D totaled $5.6 billion. In 2010, that figure skyrocketed to $11 billion, reflecting an average annual growth rate of 3.6%.
These dollars don’t consist solely of producer’s profits. Developers and seed companies make money through technology usage fees, seed premiums, and other forms of technology licenses, adding more avenues for money to flow into the agbiotech sector.
The study looked at global R&D spending in seven ag input sectors: crop seed and biotechnology, crop protection chemicals, synthetic fertilizers, farm machinery, animal health, animal breeding and genetics, and animal nutrition.
ERS’ study also revealed some interesting trends in ag biotech input investment. In 2006, for example, animal nutrition was the highest single-input sector, garnering $142 billion in the global market, reports the ERS study. Still, between 1994 and 2009, the fertilizer inputs showed the most growth at 8.3 percent. The ERS study concludes that agricultural R&D grew most rapidly in the crop seed and biotechnology traits sector, adding to the cloud of controversy that surrounds GE products.
Agbiotech inputs are usually developed for use in a particular area, and also tend to focus on the major commodity crops that dominate agricultural production in the US including corn, soybeans, cotton, wheat, non-wheat grains, sugar beats, tobacco, and cane sugar. According to another ERS report, for example, “herbicide-tolerant soybeans accounted for 81 percent of US soybean acreage in 2003, leaping from 7 percent in 1996.”
Controversy aside, agbiotech has remained on a clear upward trajectory. In 1996, roughly 1.5 million hectares of global crop production consisted of genetically modified crops. In 2010, that same figure reached nearly 67 million hectares—almost 50 times more than 1996’s total.
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