Three Keys to Success in the Biologicals Space By Walt Duflock, Vice President, Innovation There is a lot of discussion about biological solutions in agtech these days at trade shows and in ag media and with good reason. The use of chemical inputs to help manage pests and disease is under massive regulatory pressure from both Sacramento and D.C.—in many cases following the playbook western Europe is already using. Restrictions that could result in reduced use or outright bans are currently being considered in many places. Investors see the pressure and are looking for innovations that can help produce new solutions that can help to reduce the usage of chemicals, increase the efficiency of the chemicals that are used, and adjust the portfolio mix toward biological solutions. Startup founders can see the tailwinds being created and are starting to innovate new solutions in labs and universities to help speed things up.
When there are this many tailwinds working in favor of a single agtech segment, it is always good to start making sure we define the segment with some specificity for two reasons. First, it helps legitimate players innovating in the space define it narrowly to keep faux players in the space out. Second—and this is equally important—it helps investors know that the legitimate innovators are going to pitch for funds with a clarity about what the space is and what it is not. Both groups benefit from a very clear definition. This is why biologicals, having achieved the first target of being a hot segment with tailwinds, now must be clearly defined to help startups and investors who are trying to innovate and invest in the segment identify each other. If we get this right, we can help support the momentum of a hot space. If we get it wrong, we run the risk of creating the next CEA (see the carnage and fire sales in that space recently?)
or alt-protein (anybody heard anything good about Beyond or Impossible burgers lately? As I’ve said before, with enough cheese and bacon I can choke one down but they still lose on taste and price for me so I’m just not that into them) and blowing through an awful lot of venture capital money with not a lot to show for the effort. Here’s the key to defining the space: we can’t let startups and investors use “biological” as a descriptor for an agtech segment. It’s actually a descriptor for multiple spaces. Think about the problem we are trying to solve with biologicals—it includes everything from genetic innovations that help plants resist drought and disease to soil health solutions that measure and improve any number of metrics that can improve soil health to biofertilizers and biostimulants that encourage more growth and yield. That’s at least three different segments: genetics, soil
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MAY | JUNE 2023
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