You’re speaking at the World Agri-Tech Innovation Summit about “Attracting Growth Capital for the Next Agri-Tech Investment Horizon”. What do you see as the number one most exciting business opportunity in agri-tech today and where do you think major growth will be found over the next five years?
Five years is very short!
The stakes in plant and animal health are immense, and expectations are high on the part of citizens, consumers and farmers. We hope to see exciting opportunities emerge in this field, especially stemming from the association of biotechnologies and digital. In indoor farming, we are surprised how fast progress is being made. It almost makes us think of the enormous progress in photovoltaic industry over the last 10 years.
But can we imagine business opportunities in 5 years?
It’s important to remember that when talking about growth capital, the notion of profitability is key. We still see few start-ups today that are able to offer both short-term profitability and long-term growth prospects. In agri-tech, development times are long and it is rare that after a round of series B or C financing, companies reach the profitability standards of growth capital.
What investments have you made to date? Do you have any success stories to share?
Our core business is to invest in mature and growing companies. In this context, we accompany companies at the forefront of agricultural technology such as Limagrain, RAGT, or De Sangosse. We are also invested in many cooperatives and businesses fostering adoption of these technologies in their territories. Our priority is to support them in their development and in meeting their technological and commercial challenges.
As for start-ups, we have chosen to intervene indirectly by investing in some of the leading venture funds. In agri-tech, we chose Finistere in the United States and Emertec in France. We have the same strategy on the issues of health & nutrition with Seventure, the leader in microbiota, and in industrial biotechnologies with Sofinnova.
What do you see as the biggest challenge facing agri-tech companies in achieving market penetration?
The challenges vary in function of the technological domains and geographies. They are not the same for digital agriculture, biocontrol or vertical agriculture.
Technology often faces a cost-benefit ratio that is insufficiently convincing for farmers. According to the OECD-FAO Agricultural Outlook published this summer, medium-term increases in global food and agricultural prices should not be expected. This may inhibit the adoption of field-based “biologicals” or some decision-making tools using imagery or field sensors.
There are still many ways to go forward, including, of course, the needed progress of young technologies. We believe in it. But there are other avenues: can farmers be encouraged to increase their adoption by sharing the associated risk? This is an area for reflection and innovation for the agricultural insurance sector.
What new collaboration models or trends are you seeing in the industry?
Opportunities for collaboration have never been more numerous and at all levels. Upstream, it’s at the frontiers between disciplines that we see the most innovation today: between biology and IT, between agronomy and data science, between microbiology and agronomy…. The proliferation of these new scientific collaborations is an unprecedented opportunity for agriculture. In this respect, start-ups play a fundamental role as actors of change, ruffling established players. In this sometimes destabilizing context, the presence of independent organizations with solid expertise is important. At Unigrains, we cultivate our proximity with Arvalis, a reference French applied research organization dedicated to arable crops.
And that’s not all. Many consumers are seeking a form of proximity with farmers. This forces agri-food companies to rethink their positioning in this contraction of the food chain and how they work to bring together the up and downstream.
If you had to name a company as “one to watch”, who would it be?
We are very interested in the question of indoor farming. The approach is disruptive in all respects, be it in terms of resources, creation of varieties, business model, or the relationship between agriculture and the territories and the consumer. We are closely monitoring the development of Plenty, a company in which our partner fund Finistere has invested.
What are your plans for Unigrains over the next 12 months, and why is the World Agri-Tech Innovation Summit important to this strategy?
At Unigrains, we consider that to accompany the best companies, we, ourselves, must be the best financial partner. This means bringing real added value to the companies in our portfolio. In innovation, through our network of partner funds, we create an innovative ecosystem placed at their disposal. This means listening to their strategies and constantly adapting our focus. This has been our strategy for some time and an ambition we continually renew and strengthen.
Jean-Francois Laurain is speaking at the World Agri-Tech Innovation Summit on October 17-18, 2017 in London.
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