What’s New at the Big 3? A Look at the Innovation of Bayer-Monsanto, Corteva, and Syngenta-ChemChina
We have been speaking to innovation teams from the Big 3 players in plant science, Bayer-Monsanto, Corteva (DowDupont’s agricultural business), and Syngenta-ChemChina, to gain insight into their approaches to engaging innovation, how this is changing with the mergers, and where else in the ecosystem they scan for agtech inspiration.
Bayer Growth Ventures will incorporate approaches from both organizations’ previous efforts to expand into new areas. Bayer previously focused on collaborations and partnerships, exemplified best by Joyn Bioworks, a joint venture between Bayer and Ginkgo Bioworks. Monsanto has a traditional venture office investing smaller check sizes in relatively early rounds, growing Pairwise Plants as one example.
Monsanto’s strength in seed and trait development combined with Bayer’s life sciences experience could move the company beyond ‘pushing bushels’ and see a real step-change in yield innovation. Bayer’s history operating in the animal health industry combined with increasing capability in using plants as microbial bioreactors offers the opportunity to expand services to more agricultural sectors. Additionally, Bayer-Monsanto now sits in a unique position to serve the pharmaceutical industry.
Corteva is the result of merging the activities of DuPont Crop Protection, Dow AgroSciences, and Pioneer (DuPont’s crop R&D arm). Its aim is to bring together these various platforms to offer an integrated suite of solutions for the farmer. The company has a dedicated Open Innovation department which specifically calls out technology and focus areas for which the company is looking for partnerships and collaborations. These vary from trait discovery to plant breeding innovation to enabling technologies such as gene editing, genotyping, in-field sensor platforms, and more. Corteva’s open innovation strategy aims to reduce the time it takes to start the actual collaborative work of making technology widely available. If a startup or collaboration partner is aligned with Corteva strategically, then investment and other open innovation levers are possible, such as the DuPont Ventures investment in Caribou Biosciences.
The Syngenta Ventures investment team mandate is to fill in technological gaps beyond the global R&D infrastructure, often investing in series A & B rounds. Recent investments have seen the company expanding its capability in non-basic activities such as bio-pesticides (Sound Agriculture, BioPhero) as well as building out hardware and software crop protection systems (Premier Crop Systems, PrecisionHawk). Microbial nitrogen fixation was also noted as an interesting case, as Syngenta has R&D capabilities here through genetic trait discovery. Microbial nitrogen fixation is seen as a key technology as the company moves toward seed and crop protection with more control over the entire plant microbiome.
Scanning the ecosystem
When asking corporate innovation teams where they see opportunities and/or competition, three main groups were mentioned.
There is a new crop of startups that are building platforms to rival the Big 3’s core business. Indigo, a developer of microbial plant nutrition products, recently announced a $250 million funding round that coincides with a wheat trading platform that is already trading in 40 states. Indigo came out of Flagship Pioneering. Benson Hill Biosystems is a platform builder enabling farmers to grow tailored crops for specific customers without middlemen and at negotiated prices. A third example is Farmers Business Network, a developer of a platform for data and information exchange for agriculture. These examples have all indicated an IPO is preferred to acquisition, ensuring continued competition.
Flagship Pioneering also enabled Inari, a genetics company that a $40 million Series B. Flagship’s model takes exploratory ideas to ‘ProtoCos,’ before testing the venture as a ‘NewCo’ and hopefully spinning out as an independent venture. The Big 3 are watching this space and approach but are mindful of the expertise and specialization it takes to run this process well. Monsanto may have some lessons learned from the nurturing of Pairwise Plants from a very early stage.
Tyson is pursuing both an innovation lab and $150M venture fund to address challenges in food supply, from cultured meats developed by FM Technologies and Memphis Meats to animal free alternatives from Beyond Meat, as well mapping the entire food supply chain with FoodLogiQ. Further downstream, Amazon’s acquisition of Whole Foods will most likely not be the last. Competing with Amazon, SoftBank led a $200M investment in vertical farming company Plenty in 2017, and recently led a $140M round in grocery delivery company Grofers. The Maersk FoodTrack program is another approach – connecting supply chain activities with reduction in food loss.
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