Startups focus on the microbiome as an organic solution to increase crop yields

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One of the multi-billion dollar problems facing the world these days is how to grow more food.

As the planet approaches adding another billion or more people, and as an increasing number of those people are wealthier than they’ve been before, the question of where our food comes from and how we raise it becomes more than an academic discussion, as farming is 10 percent of the world economy.

Venture investors, who are never known to shy away from throwing money at technological solutions for multi-billion dollar problems, have increasingly been turning their attention to the ag market.

These bets encompass everything from big data technologies to new sensing equipment, and… now… the study of the microbial life that surrounds all the things that grow in the dirt.

Biome science (as Vinod Khosla has told me) is an incredibly exciting area for investors to pursue, and one of the prime beneficiaries of this attention is a company in St. Louis called NewLeaf Symbiotics.

In fact, St. Louis is an emerging hub for all sorts of food and agricultural investment activity (a story for another time).

NewLeaf, which just closed on $6 million in new money to round out a $30 million round of funding, is one of a number of companies working at the forefront of agricultural technology research into the plant biome.

“There are going to be multiple winners in the category. It’s such a broad area,” says Sanjeev Krishnan, a managing director of S2G Ventures, an agriculture and food-focused fund whose main investor is the Walton family. “There are more things living under soil than on the surface of the entire planet, [so] there’s a lot of opportunity to figure out causality.”

For NewLeaf, the discovery of a bacteria that is found on pretty much everything that grows in the soil was the “eureka” moment that led to the company’s commercialization of technologies to ensure aspects of crop health.

It’s also what attracted S2G Ventures and The Yard, a fund comprised of Harvard alums that invest in companies with a connection to the university (in this case, the CFO is a Harvard graduate).

NewLeaf’s new round comes at a critical time for the company. It’s tripled the size of its R&D facility in St. Louis and is about to bring its first products to market.

The company’s first magic microbe is an additive to soybean seeds called rhizobia, and their second is a treatment for peanuts. Both are designed to make the seeds more resistant to disease and better able to withstand certain environmental conditions.

What makes all of this so compelling to both investors and big ag companies is the fact that none of these treatments involve genetic modification.

The bacteria are naturally occurring, and part of the special sauce to NewLeaf’s tech is the company’s index of thousands of different bacteria and their effects on plants, according to chief executive Tom Laurita.

“These bacteria are cost-free to the plant, because they use biological byproducts,” he says. “In some cases the bacteria are protection against a disease or predation. There might be a disease that an insect could turn into a viral disease in a particular plant, but bacteria could make that microbial disease harmless.

As S2G joins the company’s cap table, Laurita says it’s yet another sign that the technology is maturing and that companies from Monsanto (an earlier investor) to Walmart (through the Walton family’s fund) are recognizing the benefits of biome science.

“We’re at this nexus between the ag industry looking for cutting edge innovative, natural sustainable products and the consumer looking for the same thing,” Laurita tells me. “It’s the first time these two groups have invested in the same company. It’s a harbinger of how investment in ag and food might be changing.”