A new accelerator devoted to agricultural technology startups is launching in Research Triangle Park with $11.5 million in initial funding.
The AgTech Accelerator, which officially opened for business Thursday, anticipates raising a total of $25 million to $30 million from investors by the end of this year, said John Dombrosky, a former Syngenta executive who is CEO of the new venture.
RTP, he said, is the best place in the world to nurture fledgling agricultural technology companies.
“We are all about RTP and the Triangle being the epicenter for all things agtech,” he said.
Agbio giants such as BASF, Bayer and Syngenta are major employers in the Triangle, which is also home to a cluster of industry startups.
Eric Ward, co-founder and co-CEO of AgBiome, an RTP company that last year raised $34.5 million in venture capital, said that funding for agbio startups traditionally has been in short supply.
“I’m a huge supporter of trying to get any additional early-stage capital into the ag biotech space, and these guys are making a serious move to do that,” said Ward, who has joined AgTech’s advisory board. “I think it has a really good chance to make an impact.”
The formation of the accelerator was spearheaded by Alexandria Real Estate Equities, which has about 1 million square feet of space in the Triangle leased to tenants such as Bayer, Eisai, Duke University and UNC-Chapel Hill. In November, Alexandria also unveiled an ambitious plan to transform a 56-acre RTP site, formerly owned by the Hamner Institutes for Health Sciences, into a campus for life science and agtech companies.
The AgTech Accelerator isn’t operating on that site, however. Instead, it is operating out of an Alexandria building at 7020 Kit Creek Road.
Alexandria’s venture capital arm, Alexandria Venture Investments, is the lead investor in AgTech. Other investors in the initial funding included Bayer and the venture capital arm of Syngenta, as well as Triangle venture capital firms Hatteras Ventures and Pappas Ventures. Investors based elsewhere include ARCH Venture Partners, Flagship Ventures, Harris & Harris Group and Mountain Group Capital.
“We have been really surprised by the quality of companies in this state being formed in the agtech arena,” said Pappas Ventures founder Art Pappas.
Pappas Ventures typically invests in pharmaceutical and biotechnology startups and is hoping that, by investing in AgTech, it will get up to speed in a new sector that shows great promise.
“It’s a strategic move for us,” Pappas said.
AgTech has an unorthodox business model patterned after what its strategic partner, Accelerator Corp., which has a presence in Seattle and New York, is using in the biotechnology arena. It’s designed to appeal to technology founders who want to avoid the day-to-day hassles of getting a company up and running so that they can focus on the science.
The idea, Dombrosky said, is to form companies that might otherwise never be created.
In addition to providing anywhere from $500,000 to $4 million in initial funding, the AgTech management team also will serve as the initial management team for each startup, Dombrosky said. Startups also will have access to office, laboratory and greenhouse space owned by Alexandria on a “flexible” basis – such as a 3-month or 6-month lease.
AgTech also has forged a pipeline into cuting-edge university research by signing partnerships with a number of universities across the country, including three Triangle schools – Duke University, N.C. State and UNC-Chapel Hill.