MLS Capital Fund II, co-managed by Spruce Capital Partners and Xeraya Capital, announced the first two investments from the fund at the 12th Annual BIO World Congress on Industrial Biotechnology on July 21, 2015.
Provivi, a bio-based pest control developer, raised its Series A in an undisclosed round led by MLS Capital involving new and existing investors. The company uses the same molecules that insects use to communicate, to develop pest control solutions that are safe for use in agriculture, commercial, household, and public health pest management.
According to Ganesh Kishore, managing partner of Spruce Capital Partners, Provivi caught the fund’s attention through its use of state of the art biocatalytics and chemical catalysis technologies to produce biochemicals in a cost effective manner for use in pest control. “The platform technology of Provivi has applications in crop and animal agriculture, human health care, consumer products for managing pests,” Kishore recently told AgFunderNews. “It is compatible with organic production systems as well as conventional and genetically enhanced crop agriculture.”
Provivi’s technology involves leveraging a class of molecules called pheromones, which are molecules that male and female insects use to identify one another for mating and reproduction purposes. This creates a highly selective way to target specific types of insects. “The use of mating disruption is currently limited to high value crops,” says Kishore, who holds a Ph.D. in biochemistry from the Indian Institute of Science and a bachelor of science in physics and chemistry from the University of Mysore. “Provivi’s technology on cost effectively producing the molecules and delivering them to the target insects makes it broadly available.”
The second investment involved a Series C round with Massachusetts-based GreenLight Biosciences. The fund also led this round with additional participation from new and prior investors. GreenLight has developed a cell-free approach to microbial chemical production, creating a sustainable and economical bio-based manufacturing platform to produce chemicals from renewable, non-petroleum based resources. The company hopes to develop biochemicals that have applications in both the speciality and fine chemicals industries.
“In traditional fermentation, one grows up the organism, known as the growth stage, and then uses the organism to carry out the fermentation, known as the fermentation and recovery stage,” explains Kishore. “Because the organisms are live and contain intact membranes, one is limited by the rate at which organisms can grow, transports substrates across the membranes and uses the substrates for both its own maintenance as well as production of the desired end product.” Further complicating the process, ionic substrates and products are more difficult to transport across the membranes. The process for scaling up this technology also takes a considerable amount of time and a large amount of money.
“GreenLight separates the growth phase from the fermentation phase by growing the organism and then opening up the membranes of the organism in the bioconversion phase. The net result is that reaction rates are significantly faster, ionic as well as non-ionic molecules can be produced and even molecules that inhibit growth of the organism can be produced since the objective is not growth but bioconversion,” explains Kishore. According to him, the company is currently in the advanced stages of a project that will demonstarte the commercial proof of its concept by making biochemicals that are currently considered difficult to make.”
As these two investments indicate, Kishore and the other members involved with managing the fund have a discerning eye for their investments and truly understand the core of what Provivi and GreenLight do. In order to identify potential investment opportunities, Kishore and the fund’s management team follow a set list of criteria. “Obviously, the number one criteria is the quality of the management/leadership team. A great team makes the necessary adjustments in business, technology, people, IP, partnerships, regulatory and financing strategy as necessary and is focused on strategy and execution,” explains Kishore.
It’s also critical for the product concept to address economically significant, underserved, or unmet market needs. “The technology should be at least near proof of concept–both in time and resources–and the company should have the requisite intellectual property assets either developed or under development to protect its innovation,” says Kishore. In addition, a company’s time to inflection points in value should be near term and its business plan should be something that new investors find attractive. According to Kishore, “new capital is needed in building significant value.”
As for the future of agriculture technology, Kishore sees a few key areas that will be significant both today and during the next decade. “A number of tools are now available to improve crop performance, both in terms of productivity and quality,” he says. “Making doubled haploids, hybrids, genome editing and genomic diversity enhancement, innovative phenotyping and new crop protection chemicals; the soil biome; integrated decision making tools, and agronomic management by the use of sensors, robots and IT technology; tools to manage inputs like water, nutrients and technologies to minimize human labor are all essential.”
On top of these technologies, Kishore sees a growing need among the middle class for not only more calories, but more nutritional value in each calorie including better protein sources, reduced levels of anti-nutrients, and nutrients that improve human and animal health.
“Industrial crops and specialty crops will continue to emerge in addition to the current food/feed crops and some of these crops will not only be essential to meet our societal sustainability objectives for performance materials, renewable commodity chemicals etc., but also to reclaim and fix poor soils,” says Kishore. “The theme of convergence of technologies, convergence of plant biology and human biology and integration of IT and Biotechnology. These will continue to be the theme for the next several years.”
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