Agricultural innovation doesn’t happen in isolation—it thrives within dynamic ecosystems where corporations and entrepreneurial innovators work together to drive progress. This session explores how industry leaders can align to accelerate agtech breakthroughs.
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Whether you're an entrepreneur, investor, or business leader, this session promises to inspire and provide actionable takeaways for agrifood ecosystem building in today's dynamic market.
Navigating the Ag Innovation Landscape: Big Co, Startup, and Investor Perspectives
Dive into the insights shared by leaders from Corteva, Alanco, and Bio4 as they discuss the dynamic world of agriculture and food innovation. This essential conversation touched on the challenges facing the ag economy, the critical need for innovation, and the diverse strategies big corporations and startups are employing to navigate tightening capital markets and accelerate progress. Gain a deeper understanding of collaboration models, key barriers to innovation, and the attributes of successful agtech ecosystems around the globe.
Outline
• Introduction to the critical nature of the food and agriculture conversation, impacting everyone globally.
• Overview of the challenging economic environment, including down trends in venture investment into agtech since 2022 and flat or down rounds in overall venture deals in 2024.
• Introduction of panelists: Tim Bettington from Elanco, Dr. Tom Greene from Corteva Catalyst, and Manuel Ron from Innovation Agency (leading Bio4).
• Discussion on how large publicly held companies approach entrepreneurship and innovation.
• Corteva Catalyst's approach: Accessing external innovation strategically to accelerate internal R&D, focusing on four verticals: biological natural products, genome editing, technology platforms (single cell tech, protein engineering), and decision sciences (digital, robotics, data analytics). Targeting early stage innovation (Series B or earlier), seeking strategic collaboration, equity investments, and JVs.
• Alanco's approach: Gaining critical mass through acquisitions (like Bayer Animal Health), recognizing the high cost of internal research across diverse animal species. Strategic focus areas vs. other important areas. Creation of spin-outs (like Biomet) and partnerships (like Athen) to give life to parts of the portfolio that wouldn't get internal attention and enable new market creation (like carbon credits). Starting a small fund post-Bayer integration.
• Startup/Innovation Agency perspective (Manuel Ron/Bio4): Relation to the ag industry as farmers using products from companies like Corteva. Initial funding from private equity and bank loans. Partnerships with big companies for specific goals like finding best hybrids for ethanol or increasing diet performance in cattle. Goal to grow internationally and bring technology for decarbonization and emission reduction to different companies. Partnerships with multinational companies are key for international growth.
• Discussion on major barriers holding back ag bioscience innovation.
• Regulatory systems and processes: Lack of global consistency, uncertainty, and difficulty for startups to navigate long and hard journeys across geographies with different systems. US regulatory environment's decreasing efficiency compared to Europe.
• Market access: Increasing importance due to consolidation at farm and corporate levels, and between countries. Harder for early-stage venture-backed companies to manage customer acquisition cost and go to market. Partnerships with big companies offer access to growers and route to market.
• Overcoming barriers: Collaboration is increasingly important. Working with companies helps bring innovation in faster by gaining market access. Efficiency in production reduces costs and emissions, offering opportunities for startups.
• Navigating tight capital markets: Austerity creates opportunity, and best companies can be built in tough times. Tight capital leads to more interesting opportunities coming to corporates. Access to startups is critical for fueling innovation pipelines. Corporations can provide more than just capital ("water") - they offer support, connections, and access to testing capabilities ("nutrients, environment, sun energy"). Hesitancy in the VC community, greater propensity for later-stage, revenue-oriented companies. Corporations with good cash flow can invest aggressively and find willing partners. Deal types are changing from upfront to more balanced over time.
• Examples of creative partnerships: Corteva's JV and investment with Pairwise for genome editing technology application in fruits and veggies. Manuel's example of Kilimo, a water management startup in Argentina, partnering with big companies like Coke for water credit business model. Corteva's early investments show strategic opportunity and highlight the importance of mature leadership teams in startups.
• Lessons from successful startups/innovation: Focus on multiple "small ideas" (experiments that are cheap, fast, and weird) rather than just one "big idea" can have higher success odds and build internal engines for digesting innovation. The more experiments, the easier it is to get the big idea.
• Opportunities and differences in global markets: So-called "emerging" markets (like Brazil, parts of Asia) are often leaders in livestock and animal agriculture. Different regions have different strengths and focus areas (e.g., biologicals and digital in Brazil, swine/poultry in Southeast Asia, cattle/poultry in Latin America). Europe is seen as a challenge for agriculture. Emerging markets may require local partners due to legal frameworks, but offer significant potential for growth and increasing production. Opportunities for startups to develop technology in places like Cordoba, Argentina. China presents opportunities but also challenges with local generics. More regional focus for innovation may be needed as agriculture is not entirely global. Proximity to the problem/opportunity is key.
• Attributes of strong ecosystems: Stability (economic, government, currency). Dedicated group with knowhow (regulatory, political). Access to capital (can be from corporates like Corteva, Alanco). Channel open as a hub to funnel companies out. Broad focus encompassing different sectors (crop chemical, pharma). Corporate partners, government, academia working together focused on outcomes, not just activity. Leveraging science and innovation across human, animal, and ag sectors (One Health approach). Ecosystems like Indiana/Illinois/Iowa, Sao Paulo/Piracicaba in Brazil, and Cordoba in Argentina were highlighted as strong examples.
Notable Quotes
• "And so we quickly realized that we couldn't fund everything we wanted to do. Where did we want to really win? And then what approach could we take to everything else?"
• "And regarding uh cost uh we as farmers we produce commodities we're always looking in cost in to reduce the cost to be more efficient..."
• "capital is like the water water for a plant but the plant doesn't just need water it needs a nutrients, it needs an environment, it needs sun energy to grow up. So um money may be uh like like the water and when you work with a company like Elan or Corteva uh you receive more than water."
Key Takeaways
• Collaboration is Essential: Both large corporations and startups increasingly rely on partnerships and collaborations to drive innovation, gain market access, and share expertise in a challenging economic climate.
• Navigating Regulatory & Market Hurdles: Regulatory inconsistency across countries and challenges with market access due to industry consolidation are significant barriers for ag bioscience innovation; strategic partnerships with established players can help overcome these.
• Tight Capital Creates Opportunity: While venture investment is down, the current environment offers opportunities for corporations to access external innovation and for startups to secure investment and crucial support (beyond just capital) from strategic partners.
• Diverse Innovation Approaches are Key: Successful companies are employing varied strategies, from corporate venture arms and spin-outs to focused incubation and strategic partnerships, to build innovation pipelines and access new markets.
• Ecosystems Need Focus and Connection: Effective innovation ecosystems require stability, dedicated expertise, access to capital, and a shared goal among diverse participants (corporates, government, academia).
Resources Mentioned
• Pitchbook (global analyst firm)
• Corteva
• Corteva Catalyst (external innovation platform and venture fund)
• Alanco
• Bayer Animal Health
• Lily
• Bio4
• Innovation Agency (Argentina)
• Pairwise (gene editing company)
• EPA (Environmental Protection Agency)
• USDA (United States Department of Agriculture)
• FDA (Food and Drug Administration)
• Athen (entity created for carbon credit market for methane emissions product)
• Kilimo (water management startup in Argentina)
• Coke (company partnered with Kilimo)
• StartLife (European ecosystem partner)
• EIT Foods (European ecosystem partner)
• Kubo Agro (Brazilian ecosystem partner)
• The Illusion of Innovation (book by Elliot Parker)
• Agnovas (non-profit focused on ag bioscience economy)
Action Items / Advice for the Journey
The discussion offered several pieces of advice for companies and entrepreneurs navigating the ag innovation space:
• For startups: Don't be afraid to push your idea. View large companies as opportunities to access markets, growers, and support beyond capital. Consider seeking local partners in emerging markets. Focus on demonstrating a mature leadership team and understanding market, IP, and regulatory dynamics. Consider working on multiple "small ideas" to build repeatability and increase success odds.
• For all companies: Be clear on what makes you successful and where you need help, then go after it quickly. Recognize that you cannot do everything yourself and be comfortable with partnerships and collaborations. Consider localizing research and innovation efforts in relevant regional markets. Tap into established ecosystems rather than trying to create them alone. Work together focused on outcomes, not just activity.
• For corporations: Actively seek and access external innovation from outside your organization. Be good partners and clear on your interests. Be flexible and creative in business models (equity, collaboration, JVs) to extract value. Provide startups with access to internal R&D engines and testing capabilities.
• Embrace the One Health concept, linking human, animal, and agriculture for future success.
