The Next Phase of Agricultural Innovation

With the announcement this morning that Bayer will finally buy U.S. seed maker Monsanto in a $57 billion dollar all-cash deal, the consolidation of the ag market is fully underway.

As a result, gone are the days when we could expect big, industry-shaping innovation to come out of corporate R&D departments like the one at Monsanto. There just isn’t enough competition anymore. The market has changed forever.

The companies, again like Monsanto, that led the development of agtech and the entire agricultural market for the last 50 years are no longer in the innovation game. Now, as the massive corporations they have become, they’re in maintenance mode. They know what they do well, they know how to drive profit for their shareholders and they know that expensive, risky gambles aren’t their business anymore.

This is good news for the rest of us.

Scratch that. It’s great news.

As a direct result of this industry consolidation, innovation in ag is finally going to decouple from the big, entrenched players that have dominated the space for so long. This is opening the door for smart, nimble startups to enter the market and make real impacts, driving the entire sector forward through innovation and technological development like never before.

I like to make the comparison to 1980. Back in those days, personal computers were still a proprietary product, developed, branded and supported by a small group of companies. When you bought a Wang computer, you ran Wang software on it and connected it to other Wang-branded hardware.

That all changed with the creation of the PC platform around 1980 that allowed software and hardware from many different makers to work together. This opened the door to an entirely new industry — universal software — and made millionaires of a new generation of entrepreneurs. Few people saw this shift coming, but Microsoft and others did and were able to make billions, as the market moved from one that was dominated by a few major companies to one with many smaller, growing players that were focused on excellence in specific niches.

It was just like the breakup of the Bell System in 1983 too.

It didn’t happen overnight, and it caused a lot of concern at the time, but eventually the telecommunications and IT industries that emerged out of the Bell System’s wake grew beyond our wildest dreams, well beyond 100x what it was before.

We’re at a similar transition point right now for agriculture, and I for one couldn’t be more excited to get started.

Here’s what we know: Investing in early stage companies drives economic growth, attracts innovation, and generates the kinds of success and jobs that we can all share in and be proud of. Monsanto started this trend in the agriculture business, with industry-changing innovations that drove crop yield and created the entire agtech industry as we know it.

But today, thanks to the Monsanto-Bayer merger, new innovators are going to be stepping up to take the lead and are deserving of investment.

At iSelect, we’re already investing in the companies that are going to change this world. Learn more and sign up to help here: www.iselectfund.com.

Consideration

With 2021 well underway and with public markets still strong, we think it is an important time to highlight some of the key private market, venture investment themes that iSelect fund has identified for the year. We believe technologies transforming the Agriculture, Food and Wellness markets will flourish, with a focus on four areas: technologies that enable better food choices to drive better health outcomes, technologies that drive better, more profitable farm operations, technologies that drive the Consumerization of Healthcare, and biome-based treatment technologies. At iSelect, we invest for impact AND performance. We offer qualified investors access to emerging growth companies through our national venture capital strategy. Our unique structure allows our investors to continue to invest in these companies as they develop.

Timing

Why is now the right time for venture? The answer is that now is not explicitly the right time. Venture is something we need in our economy at all times. Now is not better than any other particular time. The question is, why ever stop? When we look at the challenges we’re facing in food and healthcare the reality is there is someone, somewhere who has an insight about how to build a product that will solve those problems. And if they put the right resources to it, they will succeed. As long as we need new technology to make life better or make our lives more enjoyable, we need venture capital to help fuel those entrepreneurs.

What is iSelect as a product?

iSelect is a very unique product, but when you break it into its parts it’s fairly easy to understand. On the front end we’re a traditional venture capital fund. We have a diligence process. We have an investment process. We have categories of industries where we have focus and real expertise, and we invest in companies in those areas that meet requirements for the fund. On the back end we’re unique in that we don’t raise a large amount of capital at one time and deploy it over the life of our fund. Each deal that we bring onto the fund, our investors have to prove and determine to invest in that deal. We have to constantly prove our diligence standards. It’s accessible, transparent and easy for investors to come in and see our comprehensive process.

What is the ideal iSelect company?

We are looking for founders that are passionate and we want the problem they’re trying to solve to be big, real, and painful. We want the solution to be revolutionary and we want our capital to be able to help them solve that problem. We want to know that they have customers involved and that the solution they’ve come up with actually meets those customers’ and market needs. And we want the team to be capital efficient with the money they’re spending.

What does the ideal iSelect company look like?

We’re looking for a company that has an opportunity to have a 10x return to our investment or greater in a period of three to seven years. What excites us at iSelect are companies that are solving big problems. We want companies that are going to be the Monsantos of the future. Not just in the size and the scope, but the impact they have on people’s lives. We want to create positive impacts on people’s lives, so we invest in areas like agricultural production and areas like producing healthy foods for our kids. They are problems that impact real people’s lives on a daily basis. That’s what we’re trying to do at iSelect. We’re trying to solve the big problems out there. Find ways to bring capital to the entrepreneurs who are the real heroes out there getting up every morning, beating away at these things that are problems that you and me and everyone else faces in their everyday lives.

What is iSelect?

iSelect is a venture capital firm. What that means is we look at hundreds and hundreds of different companies and we apply tough diligence standards to each of them, looking at whether the team has a good plan for growing the business, whether the team is qualified and credible, and more. We do that to resolve the few who provide the best opportunities for investors. And then iSelect takes that smaller set of investments and goes to investors who are interested in venture capital and provides a way for them to invest in these companies, either individually or all at once. We co-invest alongside other venture capitalists. We source transactions through to an exit where the company would become public or get bought. And we manage that whole investment process on behalf of our investors.

Next Phase of Agricultural Innovation Begins Now

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