Indigo, an agricultural technology startup, has discovered ways that microbes help a plant grow under dry conditions. Now the company is pulling back the curtain on some of that work as it ramps up efforts to bring this technology to farmers.
Boston-based Indigo is announcing this morning it has closed a $100 million Series C funding round. The Alaska Permanent Fund, a $54 billion fund based in Juneau, AK, led the round, with participation from previous investors, including Flagship Ventures, the Cambridge, MA-based venture capital firm that spawned the company (formerly known as Symbiota) two years ago. CEO David Perry says the capital will help Indigo develop new microbial products that address big problems in agriculture, such as drought, that aren’t solved by current technologies.
“There’s no chemical you can spray on a plant and have it perform better with less water,” he says.
Indigo’s financing follows its February announcement of a $56 million investment, which Perry says was funding from 2015 that was not revealed until this year. The company claims the new funding is the largest round ever raised by an agtech company. For context, soil and crop technologies attracted $168 million in total investments in 2015, according to AgFunder, an online marketplace that connects investors with agricultural technologies. Most of that funding went to biological products, which accounted for $120 million spread across 20 investments. In its 2015 report on agtech investing, AgFunder says the growing number of biological investments comes as entrepreneurs, farmers, and consumers emphasize ways to improve soil health, pursue sustainable farming practices, and reduce the use of chemicals.
Agtech companies large and small are trying to establish footholds in the burgeoning biological products market. Research Triangle Park, NC-based AgBiome, whose $34.5 million Series B round was the largest deal counted by AgFunder in 2015, is developing biological products intended to control pests and disease. The company plans to launch a biological fungicide later this year in partnership with Carmel, IN-based SePRO. Meanwhile Novozymes (NASDAQ OMX: NZYM) and Monsanto (NYSE: MON) are continuing work on a bioagricultural alliance formed in 2013 that has scoured scour soil samples in search of beneficial agricultural microbials. The partners are now running field tests assessing how well microbes improve plant water uptake, yield, and overall microbiome health.
Perry says that rather than searching for beneficial microbes in the soil, Indigo’s innovation is looking for them inside the plant. Over hundreds of millions of years, plants have already selected the microbes that they work with best, he explains. While a soil sample holds billions of microbes, Perry says, Indigo screens just hundreds from the plant’s microbiome, a faster approach that also raises the odds of identifying the most promising bugs. The company’s software then uses algorithms and machine learning techniques to predict which microbes benefit which plant in a particular situation.
That work yielded the company’s first product, which the company is launching today. Indigo Cotton is a seed coating that grows with the plant. Perry wouldn’t go into detail about how the microbe helps a plant to improve water efficiency. But more generally, he says a microbe could encourage root growth so a plant is better able to extract water from the soil, or it could channel more energy toward a plant, or it could do both.
Indigo might not yet know exactly how its microbe works, says Gwyn Beattie, a professor of bacteriology at Iowa State University who is not involved with the company. Microbes that have the biggest impact work by multiple mechanisms and it can take a long time to determine what those mechanisms are and under which conditions they’re most potent, she explains. Indigo has advanced quickly from inception to commercial launch. Beattie says it’s possible that the company was screening for efficacy and will work on optimizing the microbe later.
Searching for beneficial microbes inside the plant rather than soil is logical, but Beattie isn’t sure that it’s innovative. She notes that scientists have published research about microbes having a greater impact … Next Page »