Many of us have assumed that all bacteria are bad bacteria, but recently there is new thinking in this arena.
Over the past decade or so, scientists have started researching the human microbiome, which consists of more than 100 trillion microorganisms that live within us. We now understand that these bacteria are actually essential and play a pivotal role in helping us maintain good health and that the same is true for plants, according to Fortune.
AgTech startups like Indigo Ag and AgBiome are working tirelessly to develop plant/soil microbiome technology that harnesses nature and improve crop yields of corn, cotton, rice soybeans and wheat. Agricultural scientists, farmers and big name organizations agree that the microbiome has great potential and could redefine the way we farm and impact plant health forever.
Both of these companies have attracted solid investment partners with their promising technologies. AgBiome’s three strategic investors include Monsanto Growth Ventures, Novozymes, a world leader in biological solutions and Syngenta Ventures. Indigo Ag has been funded by Flagship Investors. But why is this major growth area showing so much promise, and why is it attracting so much attention and funding?
Growing Healthier and More Resilient Crops
By 2050, the planet will have 9.7 billion people to feed, which is over 2 billion more than today. The yield gains from modern agricultural technologies have slowed, generating annual yield increases of only 1%. Moreover, climate change is having an impact and causing unpredictable weather patterns and record droughts that are devastating farmers around the world. If the current trend continues, we will not be able to produce enough food to sustain the growing population.
Indigo and AgBiome are trying to “reintroduce microbes to plants that it says have been lost through the tools of modern agricultural–fungicides, herbicides and other pesticides in the same way that the overuse of antibiotics has disrupted the human microbiome,” according to Fortune.
If you’re not familiar with the world of microbes, they are truly everywhere–in humans, plants and animals and living all around us. While some are harmful, others provide essential functions like breaking down waste or helping with digestion.
Indigo has sequenced over 40,000 microbes and studies hundreds of plant species. The startup’s goal is to create more resilient crops that can better withstand water shortages by rengineering the genetic structure of seeds through adding microbes to farm crops. In turn, this helps make the crops more resistant to insects, drought, sever weather and nutrient-poor soil, according to Reuters. AgBiome, in contrast, is particularly focused on the related soil microbiome and has similar goals.
Recent Funding Shows Growing Investor Interest
The four crops that Indigo is focused on are valued at $600 billion annually and just a 10% increase would mean $60 billion in value creation, according to Fortune. With nearly $150 million in funding received by Indigo, it’s apparent that there is a growing investor interest in finding new ways to ease food scarcity.
The most recent $100 million investment was led by the Alaska Permanent Fund, a $54 billion fund managed by the state of Alaska. According to Reuters and Flagship Ventures, the company’s first commercial product is in cotton seeds that were planted this past spring on more than 50,000 acres. Trials have shown a 10 percent greater yield of cotton when water was scarce. This first wave of tests will continue through the next growing season and Indigo plans to expand the program to other countries in the coming years in order to test their seeds in as many environments as possible.
In a recent interview with BizJournals, Indigo Co-Founder and CEO David Perry said that “the tests are crucial to the company’s mission to improve agricultural sustainability in terms of both economic and environmental terms.” He asks, “‘Why is there a lack of innovation in ag as opposed to the innovation that we see in tech and in biotech? Because we’re leveraging a lot of the same technology,” Perry told BizJournals.
Sharing Risk and Reward With Growers
Indigo is also focused on going-to-market in a different way to increase participation and support. Indigo decided to give equity grants to farmers who participate in the program. The startup’s business model revolves largely around sharing risk and reward with its agricultural customers. When growers are aligned with their success, it gives Indigo the opportunity to test its products across tens of thousands of acres in real growing conditions, Perry said to BizJournals.
The Future of Farming
With so many startups working to analyze the human microbiome to improve health, it makes sense that scientist and startups would shift towards focusing on the plant and soil microbiomes to improve health and yield as well. According to TechCrunch, it will take numerous seasons to determine if Indigo’s and Agbiome’s efforts are having an impact as there tends to be a lot of variation between seasons. Perry see’s Indigo’s efforts not as genetic modification, but simply as the reintroducing to nature what humans removed through our farming methods. In his eyes, he’s returning nature to the way it was before humans intervened.
There seems to be promise in feeding the world with soil microbiome products. The investment world is betting that the technology holds solid promise for the future. By 2050, the world’s population is expected to grow by billions and feeding everyone will be a challenge. For these startups and entrepreneurs, there are a lot of unknown soil bacteria out there that might be our best bet as a solution. This is precisely why the soil microbiome may be our best chance at feeding the world.