Agriculture biotechnology company Adaptive Symbiotic Technologies (AST) has closed a $3.4 million Series A from Australian ag producer Twynam Agricultural Group and a group of impact investors. The round closed with the help of online investment platform AgFunder.
Twynam also has the option to invest a further $1.9 million as an extension to the Series A. This is the second round of funding for AST, which raised $1.1 million in seed capital in August 2014.
Established in 2008, AST has developed a microbial seed treatment product called BioEnsure which is designed to improve a plant’s ability to cope with abiotic stresses like salty soils, extreme temperatures, and drought. According to the company, the product has shown yield increases of up to 85 percent in field trials involving severe drought stress.
AST’s founders, geneticist Regina Redman, and microbiologist Russell Rodriguez, first learned about the abiotic-busting potential of microorganisms called fungal endophytes while conducting research at Yellowstone National Park. The fungal endophytes grow inside a host plant and use several mechanisms to enhance symbiotically physical properties like root growth and functional capabilities such as water and nutrient use efficiency.
“It’s been a rapid rise,” AST’s head of business development Zachery Gray told AgFunderNews. “Now we are transitioning from proving the technology and collecting data, into actual sales.”
When it came to raising capital, AST was looking for an investor that had both experience in, and knowledge of, the agriculture industry. Twynam brought both to the table, as well as access to Australia’s major cotton production market. The country is the third largest exporter of cotton, behind the US and India. In an average year, Australia’s cotton producers yield enough cotton to clothe some 500 million people.
Despite these impressive figures, cotton farmers in Australia — the world’s driest inhabited continent — face devastating droughts and water shortages on a regular basis. And through its relationship with Twynam, AST has identified potential future product lines to help solve these problems, said Rodriguez, CEO of AST, in a statement.
“No one else is as far advanced as AST. This is the best technology we’ve seen in this segment,” said Johnny Kahlbetzer, director at Twynam Group in a press release. “They have a 20+ year legacy of top scientists working on it. We immediately recognized how important this technology is, particularly given the climatic stresses we’re experiencing in Australia and globally.”
Twynam Agricultural Group is one of a growing number of agricultural operators investing in agtech startups as it looks to improve its operations through technology. The group conducts a range of different technology trials on its land at any one time, Kahlbetzer told AgFunderNews last year.
With the new round of funding, the company has its sights on more field trials, additional geographies, and new products to enter in the $3.6 billion seed treatment market. “We are looking at expansion into international markets. In the last few years, we have had tremendous success in India in particular, and some other Asian and South American market,” said Gray. “Right now, we are testing in India, Australia, Argentina, Brazil, Kenya, South Africa, and potentially Uruguay.”
In November 2015, AST signed its first major distribution deal with international seed tech company Incotec. Based in the Netherlands, Incotec markets seven types of biotech products to maximize seed performance. It also maintains facilities across the globe in key markets like Brazil, Australia, and India.
AST’s first seed treatment product, which will be released in the US first and then India, targets corn crops. The company has already conducted field trials in other products.
Gray says its wheat product will follow soon after, and soybeans, cotton and rice, and other vegetable crops like spinach and carrots, are also in the pipeline.
The company is also looking at second and third generation products in addition to BioEnsure. “We are moving to expand from fungi, and working with a consortium of ag groups on research and development,” said Gray. “BioEnsure is just the beginning.”
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