Syngenta Ventures has a new managing director in Colin Steen, a Syngenta-veteran with venture experience from the early, early days of venture-backed agtech. Steen takes over from Gabriel Wilmoth, who left the company after a four-year tenure in December to join an agtech startup.
Steen has been at Syngenta for 22 years in various positions from crop manager in Canada rising up to senior director for Golden Harvest, a US-based brand of hybrid seeds owned by Syngenta.
He was involved with some of the company’s early venture investing before Syngenta Ventures was formed in 2008, getting firsthand experience with multiple life sciences investors from 2006 to 2008 while also serving as a board observer for Pasteuria Biosciences, a crop protection startup that Syngenta would go on to acquire. Steen said that back in those days, very few firms took agtech seriously.
“It was very much an open space. A lot of our co-investors were people that invested in the life science side and would dabble in agriculture just as a hedge.” Steen said that back then, cleantech dominated deal flow.
After returning to Minnesota and Syngenta’s Seed business, Steen spent the following ten years building services for growers. It follows then that he brings a very grower-centric sense to agtech investing.
AgFunder Co-Investment Fund III is now open for investment. Closing June 15, Spots are limited.
Syngenta Ventures had an eventful 2017, participating in six deals, but startups and industry onlookers are still eager for the big strategics to pick up the pace — a fact that Steen acknowledges. We caught up with Steen to get his take on the current state of agtech investing and find out what technologies catch his eye after decades in the field.
Could you tell us about your experience directly with growers for the past few years? What are you hearing from them about new technology?
Right now we’re in a tough part of the cycle. We’ve been off-cycle for farmers and growers across the Midwest. Their productivity has been as high as it’s ever been, but their profitability is the lowest it’s been in several decades. It’s a very difficult time on the farm. I think what you see a lot of is a desire for new traits, for new biotech, for new solutions to problems that they have. A lot of people are looking for alternative methods to control pests.
The return is there. They are willing to pay for it. I think the misunderstanding is people believe that when times are tough on the farmers, the farmers aren’t willing to pay money for anything. They’re still willing to pay for things if they get the return on investment. Typically, the rule of thumb that we use is a new technology should provide a three-to-one return. If the farmer is going to pay $10 for it, it should generate $30 of revenue opportunity for them.
They have no shortage of information coming in. I think what they’re still lacking is the ability to make sense of all the information coming in, in a reasonable manner, and a cost-effective manner. Definitely, with the state of the farm economy, spending another seven or eight dollars an acre to make sense of all the multicolored maps right now might be lower on the need side until the economy turns around a little bit.
How will your background affect your decision-making at Syngenta Ventures?
For me, what it allows me to do is put a little more realism behind the timeline of revenue growth that these companies are projecting — where they’re going to be in five years time. It also allows me to say what is it truly going to allow the farmer to have a better understanding of their operation. When in doubt, I’ve got a lot of folks I can call on in my network throughout the Midwest to understand if it really would make a difference.
In terms of the software side, just in light of the acquisitions that we saw last year, when you’re looking at a new farm management software or IoT play, are you thinking, how many growers are we going to be able to get on this in near-term or are you thinking, who’s going to buy this?
For me, the first thought that goes through my mind is, is this something that farmers want? Not who’s going to buy it. Is this something that’s going to provide value to the average farmer.
What are you hearing from growers about robotics?
There’s a lot of interest in robotics but it still falls under the category of idle curiosity at the farm level. I think the perfect example is, 15 years ago, if you told a farmer, you’re going to be cultivating your field and you’ll be able to binge watch Game of Thrones while doing that, paying very little attention to what your tractor or the equipment behind you was doing, they would never believe that. Now today, we’ve got all these capabilities on our equipment that allow us to operate almost autonomously already. It’s not a reach for them to mentally get to the spot where it would be a robot working up and down their field rows. But I think it’s still probably a little too far off for them to visualize how that would work practically in their field.
It sounds like you’ve gotten some good indications from growers on the seed side of biotech. What is the grower temperature on the input side of biotech?
It’s a lot higher than it used to be. When I first moved to Nebraska in 2003, if you talked to a farmer about crop protection products, they wanted chemistry in their fields. They didn’t want to mess around with anything that was not a chemical solution. I think now there are enough alternative solutions out there that are starting to open their minds up to all solutions. Granted, I still think they’re more cautious to approach those — they’re probably not going to devote their whole farm to it right away. But again, if it works, I think people are willing to give most anything a try right now.
Is there a corner of agtech that you think is underplayed or under-funded?
I think this microbial space is going to be a hot area. I’ve always had a soft spot for it personally. I think it’s going to continue to develop and be a big area for us as an industry overall. Whether the consumer starts to demand fewer pesticides in their food, or more regulation comes through, one way or the other, I think there’s going to be continuing need for more efficacious and varied approaches from a bio-pesticide and microbial standpoint moving forward. The timelines are always tricky with these companies because fermentation is such a big part of it and scaling fermentation is always difficult.
Do you think the building blocks are there for biological investments in general to follow the traditional venture timeline?
I think the building blocks are there. That’s probably a question I could answer better in a few months. But it feels like they’re there.