The Graze Craze: Amfora raises $5M in Series A, aims for forage yield bonanza

Biotech company will use the funding to accelerate the development of crops for improved human and animal nutrition

In California, Amfora closed its Series A financing. San Francisco-based Spruce Capital, co-manager of the MLS Fund II, led the round, which included participation CSIRO, the Australian-based national science agency.

In conjunction with its investment in Amfora, CSIRO granted to Amfora a worldwide, exclusive license to CSIRO’s proprietary technology to increase energy density in specified forage crops.   CSIRO is a leader in the creation and development of novel product traits in crop plants.

The $12B market

Amfora is working to develop nutritionally enhanced forage crops for a market expected to have an annual value of as much as $12 billion a year. We’ve covered this market in addressing the rise of Chromatin as a sorghum traits company — and also in addressing the growth opportunities of another newer entry, Calyxt, which is currently focused on human nutrition at the plant level.

Amfora’s product set and strategy

Amfora intends to convert millions of acres that currently produce low-value commodity forage crops into acres that produce high-value crops that have been enhanced to increase protein production efficiency. In addition to increasing the energy density of forage crops, Amfora intends to build a pipeline of forage products that incorporate multiple approaches to increasing protein production efficiency and crop productivity, as well as develop nutritionally enhanced crops for human nutrition.

Amfora’s initial focus will be to develop forage crops with higher energy density, which will increase the productivity of dairy cattle while reducing the cost and improving the sustainability of milk production.  Ultimately, meat will come into focus as well.

The Digest’s advanced bioeconomy thesis and Amfora’s place in it

In reporting on the sector in recent years, we have highlighted that the underlying asset class is land — and the advanced bioeconomy has been breaking down historic barriers in land use. Since the dawn of agriculture, acreage has been fit to a given purpose — some reserved for meat, some for dairy, some for grains for human needs, others for fruits and vegetables, some for fiber and energy production, some for pasturage, some for animal feed and forage, some lying fallow. And so on.

Then, there was some limited convertibility. Acreage could be switched at planting time to another purpose. And some crops were multi-market in nature— for example, corn could serve multiple markets through the corn wet mill system. But there were still market booms and busts — when there was too much or too little production of a given crop — and to some extent there was a lock-in after spring planting.

Biotechnology is turning that system upside down. There are companies bringing forward — for example, meat with out the cow, milk without the cow, and leather without the cow. The energy market for biofuels has come along and sorghum, a forage crop, is right in the middle of that, with advanced nutritional plays like Amfora and advanced energy companies such as NexSteppe, and hybrids such as Chromatin. We see an entire range of chemicals coming forward from plant sugars and crop residues — flavors, fragrances, beauty products, plastics, fabrics and more.

The promise here — convertibility — means a smoother distribution of production into the various channels of demand and entry into new markets. The opportunities here are for providing a price floor without government intervention, and growth opportunities in new markets.

But on the other hand, there are pressures coming from petroleum & gas sector — where biotechnology is also serving to make it possible to enter animal feed markets via, for example, single cell protein made from natural gas — the case with Calysta.

The race, then, is on for yield — always the case, but never more so than now. The competition is only going to get fiercer when convertibility creates more market players. And just as the big seed companies are themselves consolidating and growing bigger — with the resultant ability to scale solutions and the resultant trouble in developing them.

So it’s a dynamic time to launch a company avowedly focused on improving animal forage needs, and soon. This wave of companies will be acquisition targets for Big Ag, as their technology improves outcomes for growers who will be facing completely new waves of competition. Single cell protein growers, to name one. Fast improving competitive crops like corn and soybeans. The potential for reduced demand for cows and cattle even as the demand for milk and meat rises — as technologies that convert sugars into milk and meat matures.

The management team

Amfora CEO Lloyd Kunimoto previously served as Vice President of Corporate Strategy of Monsanto, a global leader in the development and commercialization of agricultural products. Michael Lassner, Chief Science Officer of Amfora, previously served as Vice President of Trait Discovery of DuPont Pioneer, a global leader in commercialization of seed products developed through the application of genetic and genomic technologies. Jonathan Burbaum, a Spruce Capital Entrepreneur-in-Residence, helped to co-found Amfora and currently serves as Amfora’s Chief Strategy Officer. Spruce Capital/MLS II Fund previously provided seed funding for the company.

Reaction from the stakeholders

“The vegetative oil technology is yet another example of product innovation coming from the pioneering metabolic engineering research conducted in CSIRO’s Plant Oil Engineering Group,” said Allan Green, Innovation Leader for Biobased Products at CSIRO Agriculture and Food.

“We established Amfora to become a major vehicle to address the global demand for protein,” said Ganesh Kishore, Managing Director of Spruce Capital, and a member of Amfora’s Board of Directors. “We are pleased that CSIRO is investing in Amfora alongside of Spruce/MLS II, and we look forward to working with CSIRO and Amfora’s management to build Amfora into a very valuable seed and trait company.”

“We are pleased to have such an accomplished and experienced team to lead Amfora,” said Roger Wyse, Managing Director of Spruce Capital, and Chairman of Amfora’s Board of Directors. “Lloyd and Mike know what it takes to apply proprietary technology to create breakthrough products, and we look forward to working with them to build a valuable pipeline at Amfora.”

“Improved standards of living are substantially increasing the global demand for protein,” said Lloyd M. Kunimoto, Amfora’s President and CEO. “Increasing the energy density of forage crops is as much as a $3 billion annual market opportunity in the United States alone, and up to a $12 billion annual opportunity globally. Amfora will develop its own products and collaborate with leaders in the field of forage crop genetics to address this opportunity.”

“Amfora represents a new business model for CSIRO, namely, investing in U.S.-based starts-ups that will be commercialization vehicles for CSIRO technology,” said Lindsay Adler, Executive Manager of Global Business Development for CSIRO and leader of the organization’s U.S.-based investment operations. “CSIRO is eager to work with Amfora to apply its technology to important forage crops that will address the global need for efficient protein production.”  Adler will also serve on the Amfora Board of Directors.