Big Chemical And Agribusiness Corporates: Where They’re Investing In Biotech, Ag Tech, And Food

The agriculture and chemicals business is changing rapidly thanks to a combination of changing consumer preferences, developments in microbial engineering and gene sequencing, and the increasing use of data and sensors in farms and factories. In addition, the largest companies in these industries are going through the process of mega mergers (Dupont and Dow, Bayer and Monsanto).

With the landscape shifting, how are corporates in the industry responding to activity in the private markets?

We used CB Insights to look at how agricultural and chemical corporates have been investing and acquiring across industries including biotechnology, mobile & telecommunications, energy & utilities, and internet.

We narrowed the list down to the 16 most active corporates and CVCs in this space — including Dow and DuPont — and studied their global investments and acquisitions since 2012 using the CB Insights Business Social Graph tool, which visualizes how investors and companies are related (investments are in blue, M&A in orange).

The corporates included in our graph include:

• Monsanto and Monsanto Growth Ventures
• Syngenta and Syngenta Ventures
• Archer Daniels Midland Company
• Land O’Lakes
• Cargill and Cargill Ventures
• Dow Chemical Company and Dow Venture Capital
• DuPont and DuPont Ventures
• BASF and BASF Venture Capital
• Bayer and Bayer CropSciences

Click to enlarge.

Notable investments in the last five years

• The venture arms of Monsanto and BASF have made the greatest number of deals, with 18+ deals since 2012.
• Steering away from agriculture-related investments, both Syngenta Ventures and Monsanto Growth Ventures took an interest in drug discovery and biotechnology startups focused on human health. MGV backed RaNA Therapeutics, which focuses on developing medicines targeting RNA, as well as Nimbus Therapeutics, which develops drugs for metabolic diseases and cancer. Syngenta Ventures participated in Series D and E rounds to precision medicine and diagnostics startup Metabolon.
• There was very little investment overlap between these corporates. Syngenta Ventures and MGV both invested in AgBiome and Blue River Technology. The former focuses on identifying and using plant microbiomes to develop agricultural solutions, like increasing yields and controlling plant and soil diseases. Blue River Technology is a robotics company that uses “smart machines” for plant care.
• Cargill and its VC arm made less than 5 deals in aggregate. It most recently invested in Calysta in 2016, a company making nutritional products for fish and livestock.
• Dow Venture Capital made a diverse array of investments across healthcare, basic materials, mobile communications, software and agriculture prior to 2012. But its investment activity has slowed in recent years, making just one deal since then, a Series C round raised by graphene manufacturer XG Sciences in April 2015.
• DuPont has not had many investments through its VC arm in recent years (an exception is a Series C round raised by feedstock company NexSteppe)
• A total of 18 deals went to the industrial sector, including construction and basic materials. Healthcare and biotechnology startups accounted for 12 of the close to 70 equity funding deals in the graph, followed by agriculture and internet tied for 3rd with 10 deals each.
• These investors primarily invested in companies located in Massachusetts (15 deals) or California (14 deals) since 2012.
• Over 20 deals went to early-stage startups raising seed/Series A rounds. These include internet sector companies Agrible, HydroBio, Phytech, VitalFields, and Understory; all are ag tech players that use data to improve crop yield and analyze risks, among other things.

M&A activity

• The 16 corporates have been involved in nearly 60 M&A transactions, mostly in the agriculture, industrial, and food & beverages sectors.
• The largest acquisition by any of these corporates since 2012 was the acquisition of Chemetall by BASF for $3.2B. This follows the general trend of consolidation in the industry.
• Vitalfields and Nuvosun received investment from Monsanto Growth Ventures and Dow Venture Capital, respectively, before being acquired by those investors.
• Syngenta has acquired at least 5 private companies since 2012. Its most recent acquisitions include farm management software firm Ag Connections and a few seed companies, including Sunfield Seeds.
• Just in the last year, Land O’Lakes made its first commercial investment in Africa through a corporate majority stake in South Africa’s Villa Crop Protection. Also in the last year it acquired Ohio-based agribusiness marketing firm FLM+ and announced a merger with agri-product supplier United Suppliers Inc.
• A few of the corporate units swapped hands in this time. In 2015, Cargill acquired Archer Daniels Midland Company’s chocolate business, valued at $440M. Syngenta also acquired Dupont’s insecticide business.
• Most of Cargill’s acquisitions have been in the processed food and animal nutrition sectors, including aquaculture feed producers Siamakme Aquatic Feeds Co and EWOS, along with malt producer Joe White Maltings. Four of Archer Daniels’ acquisitions were in the food & beverages industry, including WILD Flavors, Eatem Foods, and Specialty Commodities. DuPont made one acquisition in this sector: Missouri-based soy company, Solae.

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