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Biotech ag startups get fenced in

Megan Hernbroth
May 2, 2022
Illustration of a spot on a cow shaped like a dollar sign.

Illustration: Maura Losch/Axios

Even as the promising industry attracts investors interested in its climate benefits, there's only so far biotech startups can go when it comes to delivering on the hopes of agtech.

Why it matters: Many biotechs could face headwinds when producers decide the extra complexity associated with their products aren't worth the climate savings.

State of play: Commercially available fertilizers, which rely on nitrogen, are one of the largest sources of greenhouse gas emissions from global agricultural production.

  • Biotechs have promised to reduce emissions by engineering nutrient-rich fertilizers that don't rely on nitrogen and don't produce as many emissions.
  • Big Ag is under increasing pressure, mainly from consumers, to decrease its carbon footprint and look for more sustainable ways to maintain existing production rates.

Zoom in: Mark Gudiksen, managing partner at Piva Capital, which has made several ag investments, tells Axios that he expects the biotech startups serving agriculture companies will stall as the food supply chain tightens and farmers are forced to do more with less.

  • "The challenge is, you're asking farmers to do something different, and anytime you go to the farmers and say we have a new chemical and have to do something different, that adds to the complexity," Gudiksen says.

💭 Thought bubble: Biotech has staked a large claim over agriculture, but its user experience may hinder its long-term viability.

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