As food security becomes a flashpoint for governments concerned about the effect of climate change on their populations, venture capitalists are stepping up their investments in technology to improve agricultural efficiency and yield.
Among the most active investors is Khosla Ventures, which is doubling down on an early bet in BioConsortia, a company developing technology to improve crop yields based on research from New Zealand.
The Davis, Calif.-based company said it raised $15 million in new funding from seed investor Khosla Ventures and new investor Otter Capital.
“They’ve developed a technology platform that allows them to understand how microbes impact the ability for plants to grow in certain environments,” said Khosla Ventures partner Andrew Chung.
Just as scientists are talking about the microbiome and the ways in which microbes effect human development, the same research is influencing how researchers think about plant development as well, Chung said.
“With every plant there is a set of these microbes that impact whether a plant will grow faster, with greater yield, and in different types of soil environments,” said Chung.
Using BioConsortia’s technology, seed companies like Monsanto could increase crop yields above and beyond what they have achieved through their own modification of seeds.
“The analogy is helping a drug company reduce the time dramatically for developing a new wonder drug,” Chung said.
Khosla Ventures first backed the technology in 2011, when the firm was introduced to the New Zealand researcher Peter Wigley through its investment in another New Zealand-based company, LanzaTech (which raised $60 million in new financing last month).
Initially the firm committed $4 million over two tranches to prove out the technology’s efficacy with corn and wheat. With the success of the initial trials, Chung said his firm decided to accelerate the company’s growth and bring in a new management team.
Enter Otter Capital, which came aboard when BioConsortia hired Marcus Meadows-Smith, the former chief executive of AgraQuest. AgraQuest was an Otter Capital portfolio company before it was acquired by Bayer CropScience for $500 million, in what was one of the first large exits for an agriculture-focused tech company.
With the new capital, BioConsortia will expand the scope of its trials in two hemispheres, according to Chung.
AgraQuest may have been among the earliest exits for a venture-backed agriculture company, but Khosla Ventures’ exit from The Climate Corporation was among the biggest at $1.1 billion.
Khosla’s ag and food technology portfolio actually includes several ventures, including Blue River Technology, which recently raised $10 million; Hampton Creek Foods, which is developing an egg replacement using plant science; and Granular, a software and analytics company for farmers.
The problem of feeding the world’s growing population set against the backdrop of climate change is significant, according to the United Nation’s Intergovernmental Panel on Climate Change. “All aspects of food security are potentially affected by climate change,” the report said.
Photo via Flickr user Linda Tanner