What would our Thanksgiving weekend have been without food?
Feeding the world is important. In a world full of food turmoil, drought, fires, and other natural calamities, it is critical that cutting edge science and evolving technology help protect our food supply chain.
The Silicon Prairie may be the most important food production science and technology region in the world. With new food, agtech, and ag-bioscience startups littering the area, the region boasts a healthy pipeline of new ways to do an old thing––increase food production.
Last week (November 18) St. Louis based Benson Hill Biosystems raised $65 million to help build genetic diversity across the food supply chain. Their cloud computing system CropOS helps universities, federal researchers, private companies, and other key partners to predict, select, and control desirable genetic traits in the crops that go into our food. This allows producers to build better crops and bring these crops to market faster and at lower costs.
To underline the role of the region, many genetic evolutions and crop changes also come from St. Louis and the rest of the Prairie. For example, on November 13, St. Louis based Arvegenix filed SEC paperwork highlight a $2 million raise. This company helps build strong genetic traits into Pennycress, a crop used in livestock feeding.
In the same month (November 5), Performance Livestock Analytics, an Ames, Iowa based company raised approximately $2.2 million to continue building their cloud-based livestock tools. These tools help ensure that feedlots have the best information when selling. While this is not a production enhancement tool, the importance to producers is critical. This tool helps producers and finishers maximize their business opportunities.
In the last three months, three other agtech and food technology companies in Eastern Iowa have been funded – SwineTech (see article), Rantizo (see article), and Tractor Zoom (see article). These companies represent a sliver of the current activity in the region, but when you compare this to overall activity, it is clear that Agtech is growing its share of the overall technology pie in the region.
This is in part because funders have also started to pay more attention to this sector. For example, Clay and Milk of Des Moines ran an excellent piece on Innova Memphis (https://clayandmilk.com/2018/11/14/innova-memphis-invests-in-iowa-companies-as-it-expands-its-focus-to-agtech/) which has been one of the most active investors in the region. Innova Memphis recently announced a $31 million agtech investment fund.
In 2014, nine farm credit companies and Advantage Capital (out of their St. Louis office) formed Advantage Agribusiness Partners LP to invest $154.5 million in agtech around the country. Not surprisingly many of their investments are in the Silicon Prairie. At the time that the fund was established, Tim Hassler, the Managing Director of the Fund stated: “We invest in companies involved in the production and processing of food. It’s no secret that businesses in rural America face a shortage of investment capital. Advantage Capital Agribusiness Partners is focused on making impactful investments to foster growth and job creation in those rural communities.”
In short, this holiday season we’re consider the harvest and giving thanks for having food on our table and wonderful people around it. First, thank the farmers and their families. Farming is really hard and underappreciated for its physical risks of personal safety. Second, don’t forget about the technology builders and financiers that are helping to insert new ways to do that old thing into the food supply chain.