Digital Soil: The Four Secrets of the New Agriculture

March 9, 2015 |

omics

To make fuel, chemicals, fiber, food more productively than ever before — it starts in the field with the New Agriculture.

Here’s what’s happening as Silicon Valley converges with Silicon Farm.

We heard this past week from California that Finistere Ventures, a California-based innovation capital firm and one of the pioneers in the rapidly growing agriculture technology (Agtech) sector, announced the first closing of its new $150M Agtech Fund, Finistere II. And you might well ask — why is that important to me?

Well, ultimately land productivity is the ultimate measure of agriculture, whether a venture is producing a fuel, chemical or food. The new wave of sustainable agtech is bringing cutting edge ‘comics, Big Data and heavy investing to bear on four areas of opportunity.

So, here are the four Secrets of the New Agriculture, companies and researchers who are:

One, working directly on photosynthetic, carbon and water efficiency, to make more stuff per acre.

Two, diversifying the product stream through novel crops, organisms and processing technologies.

Three, protecting the productivity again opportunistic predators, competitors, parasites or diseases that would dearly like to, er, “borrow a cup of sugar” in energy terms.

And, four, developing and deploying the industrial, physical and digital technologies to revolutionize planting, cultivation, harvest, storage and transportation.

A fusion of San Diego’s ‘Omics with Silicon Valley’s digital chops

In this effort, you can see the genomics, lipidomics, and metabolomics in play — that’s San Diego’s strength, in so many ways — yet, in combination with some of the digital strategies that are straight out of Silicon Valley. Already we are seeing some degree of fusion between biological and transistor technology. We expect to see more.

The photosynthetic problem — How much upside is there?

Case in point, just looking at photosynthetic efficiency  only one area of opportunity in sustainable agtech that could have an “across the board inpact” with fuels, food, chemicals and biobased materials.

Consider the problem this way: an algal pond venture is converting something around 1.5% of the available light into a fuel. A team from Joule in 2010 demonstrated with the chart below how much energy is lost in photosynthesis — while demonstrating that a technologiy like Joule’s could have a theorteical efficiency as high as 12% without changing the fundamental processes of metabolism.

Energy loss factor Algal open pond (%) Direct, continuous (%) Direct theoretical maximum (%)
Unusable radiation (non-PAR fraction) 51.3 51.3 51.3
Culture growth loss 20 5.4 0
Reactor surface reflection loss 2 15 0
Culture reflection loss 10 10 10
Photon utilization loss 15 15 0
Photosynthetic metabolic loss 70.2 74.8 70.9
Cellular maintenance loss 5 5 5
Mitochondrial respiration loss 30 0 0
Photorespiration loss 49 0 0
Nonfuel production loss 50 0 0

As an example of 8X upside. And that’s without taking into account the opportunities in water efficiency, just to name one other hot area for research. In all, the devlopment of a tolerant society not entirely unlike California — only, in this case, at the microbial level, where diversity is celebrated and fiercely protected, and organisms are more drought-tolerant, stress-tolerant, herbicide-tolerand than ever.

Finistere chairman Jerry Vaulder observed in 2013, ““There was a lot of discussion [for years] on how we convert to a carbohydrate economy from a fossil fuel economy. Myself, I thought that using corn was not sustainable. There were a finite number of acres, and there were some problems with ethanol — for example the way it absorbs water and so on. On the biodiesel and oil side, I didn’t see those problems.

“But some of us thought we should look green plants convert carbon, look at the inefficiencies. Of the 350,000 or so species out there, almost all of them are only 1-2 percent efficient in photosynthesis. At the top of the pile you have something like sugarcane at 5 percent.”

Dr. Ganesh Kishore, now the co-chairman of the Malaysian Life Sciences Capital Fund, raised the same issue at the 2010 Burrill & Company Limited Partners meeting. He said that biofuels research, while impressive and laudable, is overly focused on midstream processing technologies and not on the key factor: the appallingly low rate at which plants convert sunlight to energy. For example, corn checks in with a 1-2 percent efficiency rate. Raise photosynthetic efficiencies to 10-12 percent, said Kishore: that’s the opportunity. With such a fix, so many of the concerns about biofuels – cost parity, food vs fuel, the cost of transporting biomass – begin to melt away.

Caulder agreed. “If you can increase biomass without input – more efficient in using sunlight, take them from 1-2 to 3-4 percent — that’s double the production, and you are still at bottom of the curve.”

Who are Finistere, again?

Finistere are behind a number of hot crop-related ventures we’ve looked at before. SG Biofuels (jatropha), Yulex (guaule), ZeaKal (plant productivity) and Algenetix (algae), to name a few.

In 2013, we saw the model at work with the $3.8M Series A funding of ZeaKal. We noted at the time that “A successful Series A is always a good indication that, while it is early days for a technology, there is a good idea being worked on that has acquired some level of validation in the lab. In ZeaKal’s case, even more so — because it comes out of the Kapyon portfolio of companies, based in San Diego, a venture firm with an interesting idea of how to leverage research coming out of universities and government research institutes. A Series A, then, that in some ways acts like a Series B or C and is indicative of a technology much closer to the market.

ZeaKal? It is focused on plant science — specifically focused on raising the production of biomass in specific crop targets including soybeans and rice. The company’s HME technology has shown crop yield and oil content increases of up to 50% and 34%, respectively. Interestingly, this is a technology that is focused on increasing the efficiency of how oilseed plants, for example, handle their current levels of inputs rather than increasing input levels.

Overall, it shows the Finistere model — which is to gain global access to the best new technologies from centers of Ag Tech excellence in the U.S., Australia, Israel, New Zealand and Canada, through its venture partner networks, and connect them into the centers of mainstream venture investment in California and the Californian innovation ecosystem.

The Finistere II Fund

The Fund focuses on new technology solutions in food productivity, sustainability, and nutrition to address the ever-decreasing agricultural land resources, climate change, and changing population demographics.  Finistere is collaborating with Bayer CropScience, AVAC Ltd., and other partners to identify and invest in world-class technologies across early-to-growth stage companies in the Agtech space. By investing in future technologies, Bayer CropScience aims to advance global food security.

Deployment into innovation

While the Fund is primarily focused on North American opportunities, the Finistere II Fund will invest in companies from ‘global centers of excellence’ in Agtech. Finistere is also expected to announce collaboration agreements this quarter in Israel, and is developing an Agtech pipeline strategy with support from research organizations in Australia and New Zealand.

Expanding reach into Silicon Valley

Finistere will be operating from their established San Diego, Calif. office and a new office in Palo Alto, CA headed by its new partner Dr. Spencer Maughan, formerly a Vice President at Venrock.  According to Maughan, “Silicon Valley has become a major hub for new Agtech companies, and a more diverse group of investors.  With California as the leading agricultural state by value and the biggest concentration of venture investing in the world, the prospects for investment in Agtech are ideal.”

Reaction from the partners

“We are excited by the promising technologies and companies in the Agtech space that need both capital and the strategic, technical, and operating expertise that we bring as partners and investors,” said Finistere Ventures co-founder and Partner, Arama Kukutai. “We are delighted to now have an aligned group of financial investors and strategic partners that includes Bayer CropScience supporting our efforts.”

“The world faces difficult challenges to its food security with 9 plus billion people to feed by 2050,” said Dr. Adrian Percy, Head of Global Research and Development, Bayer CropScience AG.  “The investment with Finistere Ventures complements our vision for collaborating with others in delivering new innovation to growers to enhance yields necessary to provide access to safe and affordable food for this growing population and shifting tastes of consumers. As an innovation led company, we believe fresh approaches and technologies for our farmer community will be critical to meeting these challenges of tomorrow and look forward to seeing this effort come to fruition.”

“The timing for a new Fund coincides with the new wave of innovation needed to create the next Green Revolution in agriculture,” said Jerry Caulder, a leader in agricultural biotechnology and Chairman of Finistere Ventures. “By partnering with the expanding VC interest, we can build on the positive results we’ve had in this sector”.

“We are partnering with Finistere to not only grow financial returns but to help leverage the major R&D investments being made in Canadian universities and institutions that need connections to the talent and ecosystems in the U.S. to flourish,” said Dr. Michael Raymont, Chief Executive Officer of the Calgary-based investment firm AVAC Ltd.  Canada has a proven track record of pioneering new technologies in crop and food – Canola, for example, has grown to a crop that is planted in over 25 million acres in Canada alone.

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