AgTech Accelerator and its investors have agreed to provide $10 million in funding to launch its first startup, a fledgling fungicide company that has moved into its facility in Research Triangle Park.
The startup, Boragen, is developing a next-generation fungicide that aims to address the resistance that fungi develop to existing fungicides. Mixing Boragen’s fungicide with other products also would enable farmers to reduce the amount of chemicals applied per acre, said John Dombrosky, CEO of the AgTech Accelerator.
In conjunction with the investment, Dombrosky becomes CEO of Boragen as well, and accelerator team members will handle the company’s financial and other back-office functions. It’s a business model designed to appeal to technology founders who want to avoid the day-to-day hassles of running a startup.
AgTech Accelerator opened its doors last year and to date has raised $20 million from investors. With that money in hand, it envisioned providing between $500,000 and $4 million in funding for each startup it decided to take under its wing.
But Dombrosky said that when it became clear that a bigger investment was needed to attract a team of employees to join Boragen and relocate to RTP, AgTech’s investors stepped up and invested additional funds beyond the dollars they previously committed. Of the total investment of $10 million, just $3 million was pulled from the dollars originally committed to the accelerator.
“The flexibility of this model is really proven out in this first deal,” Dombrosky said.
Among the AgTech investors who plowed additional money into Boragen are: Bayer and the venture capital arm of Syngenta, agricultural biotechnology giants and major employers locally; Triangle venture capital firms Hatteras Venture Partners and Pappas Capital; and the venture capital arm of Alexandria Real Estate Equities. Alexandria has about 1 million square feet of space in the Triangle leased to the likes of Bayer and UNC-Chapel Hill and spearheaded the formation of the accelerator.
Boragen has been running experiments the past two years, working with technology licensed from Pennsylvania State University and developed by researchers Stephen J. Benkovic, who was awarded the National Medal of Science by President Obama, and C. Tony Liu. The company previously raised a little more than $1 million in seed funding, Dombrosky said.
Dombrosky said the new $10 million investment will go toward product research and development and developing a broad technology platform. That will include hiring five or six employees to work with Liu, who is the company’s chief scientific officer and its sole employee up to now.