Corteva Catalyst exec on investing in agrifoodtech startups: ‘We’re trying to be very intentional…’

From gene editing to biologicals, Corteva has vast expertise within its own four walls. But it doesn’t have a monopoly on good ideas, says Dr. Tom Greene, who heads the firm’s new Corteva Catalyst investment and partnership platform. So what’s the best way to harness external innovation?

There’s no magic formula, says Greene, who has spent the past 18 months formalizing structures designed to help Corteva find, partner with, and potentially invest in, innovative startups in four key verticals: gene editing, biologicals, tech platforms, and decision science. The key, he says, has been switching from a more “opportunistic” to a more “intentional” approach.

AgFunderNews (AFN) caught up with Greene (TG) at the World Agri-Tech summit in London to discuss the new approach to tapping into external innovation at Corteva, which was formed from the agriculture divisions of Dow and DuPont and spun off as a public company in 2019.

AFN: What was the rationale behind Corteva Catalyst?

TG:  Corteva Catalyst was really born out of strategy work in late ‘22 early ‘23 where we recognized as a leading ag organization that we were absent in this early-stage VC space. We had engaged over the last five or 10 years, but we didn’t really have a strategic focus. What Catalyst has done is provide that via a platform with which we can now engage early startups in a more strategic way.

I look at the work we did in the early days of genome editing as an example of where early-stage investment can have really positive benefits to an organization. So we were fortunate with [to form a partnership with] Caribou [a gene engineering company spun off from Jennifer Doudna’s CRISPR lab at Berkeley] and could access the Berkeley IP, build a relationship with Vilnius [University in Lithuania] and invest in [gene editing startup] CasZyme [which was spun out of Vilnius in 2017].

This really propelled us from a genome editing standpoint, and so we want to find more opportunities like that to access external companies that are driving research in really innovative, disruptive technologies, in areas that are strategic to us, that can help us accelerate internally.

Out approach used to be a little bit opportunistic, a bit more fund-to-fund driven where we were not necessarily driving targeted investments; we were participating in a larger fund that was making investments that may or may not have been strategic to us as an organization.

AFN: What stage are you investing, what size checks are you writing?

TG: We are doing direct investments, series B or earlier, even as early as pre-seed stage. Our typical check sizes are $10 million or less, although we can go larger if we need to.

But we’re both an investment and a partnership platform that sits within R&D, so not limited to equity; we can do strategic collaborations as needed, either as a standalone or in partnership with an equity investment. We’re trying to be flexible in our business models to create win-win-wins for Corteva, founders, and VCs.

We’ll probably end up doing five to seven investments this year. I don’t know what we’ll do next year, but ideally, we’d like to be in that range again.

Now we’ve got a much more structured approach and good clarity on our verticals, we feel comfortable making investments early because we’re seeing much more the technology flow and we’re able to assess companies and peers and select the right investments for us based on strategic fit.

AFN: What does success look like?

TG: We look at most of our investments in companies as opportunities to acquire down the road or access some technology coming through the portfolio. At the end of the day, it’s about accelerating innovation, not so much a case of I’m putting $2 million into a company and looking for a return when it exits down the road.

If I’m doing if I’m doing my job right, we should see components of our portfolio either being acquired or we’re accessing licensing technology and moving it into products. If in five years that’s not happening, people should be asking: Hey, Tom, what are you doing? My hope is that we will make either follow on investments, acquisitions, or gain exclusive access to components of the technology platforms that we can translate into products.

AFN: Is there a dedicated team?

TG: The team is fewer than 10 people but we have dedicated resources from M&A, finance, and legal.

We formed an external innovation investment group in the first quarter of 2023 and spent much of that year getting the team in place, understanding the structure, the process. We announced Corteva Catalyst in March and then started executing deals [investing in ag biological cos SOLASTA Bio and Micropep, and gene editing specialist Pairwise].

AFN: How do you make sure you don’t miss exciting opportunities in your four verticals?

TG: We do get inbound, but we’re trying to be very intentional in how we landscape areas of interest. So we recognized peptides as an emerging space [in ag biologicals] after conducting a dedicated landscaping effort [which led to investments in SOLASTA Bio and Micropep].

We’ve also signed up for a number of AI- and ML-based tools that we run in house, plus we partner with Ducera Growth Ventures to help from a landscaping and deal executing standpoint.

We also work with [Dutch agrifoodtech startup accelerator] StartLife and EIT Food to do some landscaping on our behalf, and we have long standing relationships with universities such as [Belgian research institute] VIB [which has expertise in CRISPR techniques] that do an excellent job spinning out discoveries into startup companies.

AFN: What role should strategics such as Corteva play in this ecosystem at a time when some investors have a downer on food & ag?

TG: I would hope VCs and the startups see in us an opportunity to accelerate innovation into products, which has been the challenge in agtech historically. There aren’t that many exits as you have to go on such a long journey to get products into this marketplace. Incumbents like us, Bayer, and Syngenta have been at this for hundreds of years.

We are investing at a time when a lot of VCs are backing out. Hopefully, that’s a good thing.

AFN: What’s exciting about your first vertical: gene editing?

TG: We have wonderful group of scientists, but there’s a much larger science community outside of our organization working on how to improve genome editing, how to apply it differently, how to multiplex it, and there’s inevitably innovation that will be happening we just can’t do internally because we don’t have the bandwidth.

I really see genome editing as one of those step changes from an innovation standpoint that doesn’t come along that often. We’ve got this convergence of deep genomics knowledge, a strong germplasm base, and now tools to better mine that genetic variability. So it’s just an exciting time, because we can do things in a more targeted way that’s so much faster than a more random interbreeding approach.

In corn, for example, we’ve basically taken genes that drive four different disease targets [Northern leaf blight, Southern rust, gray leaf spot, and anthracnose stalk rot]. We’re pulling two to three genes per target and co-locating them in a single location, getting results that would be virtually impossible in a [traditional] breeding process.

We’re able to access the right genes with the right performance and introduce them in our leading germplasm base in a very rapid and targeted way.

AFN: Where does gene editing sit vs transgenic and traditional breeding?

TG: I see a lot of nutritional trait opportunities that previously were not available because of the cost and time of the journey from a transgenic standpoint. It’s the same thing with disease; we’ve known disease genes that we could overexpress transgenically, but the value of the product didn’t warrant the cost of the journey so we sort of opted not to do that. But now that door is open with genome editing.

However, when it comes to insects where we are leveraging our traditional Bt traits from microbes [in transgenic crops], it may be a little bit harder [to achieve similar results with gene editing]. We may get there in time, but I think in the immediate future, you’re probably still going to need traditional biotechnology.

AFN: Ag biologicals is the second area of focus at Corteva Catalyst, what are you seeing out there?

TG: The number of companies emerging in this space continues to grow and it’s probably one of the richest areas that we see in the Catalyst arena. We’re seeing really exciting things in the area of phosphate stabilization [making it more accessible to plants and reducing its loss through leaching or runoff], nitrogen use efficiency [so plants need less synthetic fertilizer], and biocontrols [pest control] where we’re finding microbes that deliver better efficacy.

AFN: Tech platforms is the third area of focus at Corteva Catalyst, what are you seeing out there?

TG: This covers things like AI-based protein engineering or single cell technologies, areas that we are either wanting to accelerate or where we have got a little bit of a gap in house, or we think will greatly enable the internal flow of research. So we engage the R&D team, identify some of these areas, and start landscaping companies that could help us move faster.

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