Agriculture venture development organization TechAccel has made a strategic investment in animal feed additive startup Agrivida alongside the Iowa Corn Growers Association‘s equity investment fund Iowa Corn Opportunities.
The undisclosed investment comes on the heels of Agrivida’s $20.4 million Series E last September when The University of Texas Investment Management Company led the round joined by Agrivida’s high-profile existing investor base: ARCH Venture Partners, Cultivian Sandbox, Middleland Capital, Kleiner Perkins Caufield & Byers and Northgate Capital.
Agrivida’s biomolecular technology platform uses the corn plant as a factory to produce enzymes as an additive to feed products for poultry, swine, dairy and beef cattle to promote efficiency in animal production. GraINzyme is a corn phytase or glucanase feed additive for monogastric and ruminant animals (chickens and cows); INzyme is a silage-based grain replacement for feed for ruminant animals; and INergy is a plant line with higher energy content for ruminant animals.
GraINzyme is the closest to commercialization, with 750 acres of Agrivida’s hybrid corn currently under production in South America. It will be ground up to produce the final feed additive product on-site by contracted farmers in a closed loop system.
The equity investment in Agrivida is an example of one of TechAccel’s acceleration and investment routes. The venture development organization focuses on accelerating tech, by bringing private capital, deal expertise and scientific expertise to the table with a network of affiliated universities and agribusinesses.
TechAccel will only make an equity investment when it can bring adjacent science advancements to the table through its research network. In the case of Agrivida, TechAccel believes there’s an opportunity to expand the company’s portfolio and technology beyond its initial targeted products.
“Agrivida is focused on poultry and swine at the moment using the corn plant as the manufacturing facility for those enzymatic products, but we think there’s opportunity to work with other plants such as soy or to create products for other animals,” said Michael Helmstetter from TechAccel. “By partnering with us and our allied universities, we will help Agrivida move into the other areas faster than they might themselves without negatively impacting their bandwidth, but by adding value.”
TechAccel is, therefore, investing equity into Agrivida directly — as part of the recent Series E — but also into the research and development of future products based on the company’s technology. The VDO will invest around $850k to $1 million in an equity investment like this.
The second way TechAccel might source deals is by partnering with large agribusinesses that have technologies on their shelves that they don’t have the risk appetite or resources to bring into their pipeline. TechAccel will acquire access to that technology, usually via a license; agree to reach certain research benchmarks with the agribusiness; and then after reaching those with its partner universities, take the technology back to the agribusiness to bring into their pipeline.
The third approach is a bit more typical for venture development organizations in that in focuses on commercializing technologies from universities. Here, researchers might have exhausted all public funding for a technology, and need further investment to get it to the next stage. TechAccel will only work on these projects when they know they have a strategic partner interested in taking that tech to market when it’s ready, according to Helmstetter. The VDO has four people on the team who are tech transfer experts in universities, he added.
Under this pillar, TechAccel recently partnered with the Donald Danforth Plant Science Center to provide grants of $250k to demonstrate proof-of-concept or commercial feasibility studies with principal investigators at or affiliated with the Center. Projects under the ‘Path to Commercialization’ program, will be expected to produce license-ready technology, processes or products, or new spin-off companies, and TechAccel will share any investment returns with the Danforth Center.
TechAccel is funded by high net worth individuals and family offices and calls capital to fund specific operations.
“We are not a fund; we are an operating company that calls capital as needed to fund the operations of our projects,” said Helmstetter. “Many of our investors have a long-term view, which is suitable for agtech. For example, we have three technologies licensed from a university that might have an eight to 10-year time horizon before we’d harvest that opportunity, bearing in mind the associated regulatory hurdles. On the flipside, we have three equity investments that have a different timeline to exit that’s more in keeping with regular venture capital.”
TechAccel’s investors lean towards making investments in life sciences and impactful technologies, although it is hopefully close to making an investment in a precision ag company.
“When we brought a precision ag company to the board in November, it was really interesting as it was the first time we’d looked at a non-biotech investment and we discussed whether we should be in that space or not,” said Helmstetter. “We are hoping to go ahead with that investment, which is a company providing real-time, satellite imagery-based information to farmers, but we’re bringing our biotech expertise and network to the table via research on insects. We have a natural tendency towards biotech, but by finding a unique way to add that value to other types of tech becomes pretty novel.”
TechAccel has not announced all the investments in its portfolio as some of them are operating in stealth but expects to announce a few more later this year.