AgTech at a Crossroads: Capital, Innovation, and Resilience

In this final episode of the Climate-Ready Agriculture series, agtech investor and innovation advisor Mark Brooks shares insights on how new technologies, research, and business decisions are shaping the future of agriculture. The conversation explores emerging trends in agtech, how climate challenges are influencing real-world decisions across the food system, and why stronger collaboration between researchers, entrepreneurs, and industry will be key to building more resilient agricultural systems. 

Transcript

AgTech 360 discusses breakthrough technologies that are impacting growers, businesses, and consumers hear from industry and academic experts about what's on the horizon.

Adrian Percy: Today I'm joined by Mark Brooks, a renowned corporate development and innovation advisor. We will be discussing key agtech trends, the path from research to real world impact, and why climate ready agriculture is shaping today's technology and business decisions. Mark, thanks so much for joining me.

Mark Brooks: Thanks for having me, Adrian. Good to be here.

Adrian Percy: Yeah so let's start off with a little bit about you. 

Tell me a little bit about your background and how you got into agtech investing.

Mark Brooks: Well, I'm still figuring it out honestly as I go, but I, I began my life or career as a climate [00:01:00] scientist at North Carolina State University, where you're located on campus, was there for a decade doing research on climate and weather and in particular, the intersection with agriculture as well as energy and transportation and other sectors. And that really got me into the ag space, which is a, as we all know, is a very interdisciplinary, multidisciplinary kind of world. There I was doing research on ag and climate intersection

the intersection of those two things and I started an agtech company, was an entrepreneur for a few years doing agtech development for specialty crop farmers. So it was a decision support platform that provided kind of frost advisory services for growers, as well as wine grape kind of predictions of bricks levels for growers in California.

Did that for a while and then I pivoted my career completely and I went somewhere totally different into corporate strategy for a while but I really, I was drawn back to ag and food [00:02:00] and this industry space, and so I found a great role at Syngenta Group, on Syngenta Ventures, which is the venture arm at Syngenta, I was one of the investment managers there investing globally in ag and food related startup companies.

And then most recently was head and managing director of FMC Ventures, which is the FMC corporations corporate venture arm. Again, investing in mostly series A and B stage companies, kind of upstream ag. So I've been on the kind of entrepreneur side, you know. Creating technology and startup on the research side at NC State, and then on the corporate side at, you know, two of the biggest companies in the world that do inputs as well as on the venture capital side and kind of bridging those two worlds.

And so I'm still learning, still figuring it out, but I've had a good time doing it so far. 

Adrian Percy: Perfect. I love the fact that you've seen this world from so many different perspectives and I'm gonna ask you to kind of draw on [00:03:00] those different learnings, and I appreciate you're still learning, but draw on those different learnings as we kind of talk about some of these topics in a bit more detail.

So before we talk about specifically about climate and agriculture and investing, 

can we talk more generally about the AgTech world? I mean, what is going on there? I know there's been a little bit of a word of hurt for the last couple of years, but how are you seeing things right now? What stage are we in agtech and agtech investing?

Mark Brooks: Short answer, the stage we're in right now I think is a kind of a recalibration stage, and let me explain the context of that. You know, ag and food tech investing has been a thing for a while. We saw really a peak of the number of dollars going into this space and the number of deals being done.

We saw a peak of that in like the 2020, 2021 timeframe. Since that moment, we've seen a massive decline in the number of companies being [00:04:00] funded and the number of dollars flowing into this space. A lot of reasons for that, commodity prices are a big part of it. I think the lack of exits, the lack of companies being sold or going IPO or being sold to, you know, ag strategics that number has gone down significantly.

And be, and because of all that, we've seen a lot of venture capital funds that used to focus on ag and food. They've kind of pulled back or just disappeared, sort of gone to other places and they've taken, a lot of venture capital money with them to other places. So right now what's going on is we see, we see a, a true reset in the startup ecosystem and the venture capital ecosystem because of all of the reasons I just described.

The way I think about it is like over the last, over the last decade or so, somewhere around $40 billion has been invested into startup companies in this space. And most of that has just like evaporated. It's [00:05:00] disappeared, because of the things we've described. And so I think what's happening now is, is a reset with valuations.

So, the startup companies that are here in this space now that are raising capital, many of them are facing a lot of pressure on their violations to keep the valuations lower. We're seeing the strategics, being the big ag companies, the big ag and food companies, we're seeing them reset as well, right?

I mean, it all public information that Corteva is splitting apart. BASF is gonna be sort of spinning out or unlisting, their crop solutions business. FMC just recently announced last week that they are, putting themselves up for sale as well as other strategic options. So all of these things are happening in the industry.

That's also a reset. And so I think. Even though I'm, even though I'm, I know I realize that I'm saying things that are pessimistic sounding or negative sounding, but I also wanna shine a [00:06:00] light on the positive stuff here, which is, this is still a sector, it's still an industry, it's still a space that is required for food security.

It's required for planetary health, it's required for global trade. And so entrepreneurs who are in this space now or thinking about creating something new in this space, I think still have tremendous opportunity. There will always be capital available. There will always be a need for innovation here.

It's not optional space. It's always gonna be a required, a required thing. So short answer, we're in a reset kind of recalibration moment. 

Adrian Percy: So I love that you're putting some optimistic spin on all of this that's that's important for us looking to the future. And you're absolutely right. In my opinion, there is a clear need for these technologies to come forward.

But I'm just curious about the types of technologies with all this $40 billion of learning that we have now in our pockets, you know, 

what types of technologies do you feel have a better chance? [00:07:00] Of making a success of themselves and, and making a success of those, those companies versus others which have fallen by the wayside. 

Mark Brooks: I'll give you the answers early, so I'll give you my point of view on the answers. But there's a lot of nuance in what I'm about to say. The nuance depends on the region, the country, the, you know, the commodity that you're focused on. But here's, here's what I would say, synthetic chemistries we know are under a lot of regulatory pressure to kind of, sort of, shrink in size, right? Europe in particular is regulating the synthetics kind of out of the market to an extent, or making it very difficult for new synthetic chemistries to come in from a crop protection standpoint. So one I would say is biologicals. Very attractive space. The R and D curve for developing a new biological tends to be a little bit shorter than developing a new synthetic chemistry.

And that means that when, when you get to the market, you have a longer kind of patent, you know, life [00:08:00] cycle available for commercialization, that's attractive for an investor, attractive for an entrepreneur. So one is biologicals, I would say the second big category. to answer your question would be financial technology, FinTech.

And what I mean by this is credit lending, liquidity opportunities for liquidity, offtake agreements, pricing, transparency. Anything that reduces the economic friction for a grower or producer or player in the value chain to move money and move the commodity is an attractive thing right now. This is especially important in places like Africa where there's a very complex and fragmented financial ecosystem.

Critical in places like Brazil and India. Same kind of situation there as well. So FinTech would be my second category of an answer. And I think the third category of an answer that I would offer would be automation and robotics. This is not a new [00:09:00] thing. This has been around for a long time. Everybody knows that labor on farm labor is a big challenge for growers almost in every part of the world that you're in.

And so any kind of technology that, that can mitigate the pain for a producer with respect to labor automation, et cetera, that kind of stuff I think is always gonna be in vogue. And is, and is very attractive now and is getting kind of a renewed sense of attention I think right now, in the ecosystem.

Adrian Percy: And, you know, with these types of technologies that you've mentioned, I don't know how you see. 

How successful we've been as an industry to really kind of deploy these technologies and, and create impact with them, either now or in the future. And I'm just curious about whether you see learnings either from your time as a researcher or as an investor, as an entrepreneur, about how we can create genuine impact with some of these technologies and really get them adopted across, [00:10:00] you know, farms across the US and even further abroad, like places like Africa that you just mentioned.

Mark Brooks: Yeah. It's critical, right? I mean, getting the adoption curve steeper, and easier is that is, that is one of the pervasive challenges I think, in this industry. And the reason that it's a challenge, I think is because the average farmer, you know, probably has 40 or 50 times in their life to farm, to produce the outputs because of the, the seasonality of, of agriculture.

And then when growers do adopt a new technology, it's not all at once. That's often, you know, I'll, I'll use it on this part of my farm and not all of it, I'll kind of ease into it over a few seasons just to get comfortable with it and reduce the risk. So I think in order to drive adoption of whether it be robotics or these FinTech solutions or biologicals or anything else, you know, new seed traits, anything else that's in this [00:11:00] space, I think there has to be some de-risking done to it. And I think there's several ways of de-risking the adoption, not just for growers, but for anybody in the value chain. One is kind of providing some economic incentives. And I mean, when I was at Syngenta, just as a kind of case study example, when I was at Syngenta, we had, you know, several new seed trait varieties, but there was, in order to, to encourage adoption by growers of these new traits, there was sort of an insurance program that was offered alongside it. Which basically said Mr. And Mrs. Farmer, if you use these seeds, we're gonna give you this sort of risk, calculated kind of insurance plan where if it fails, you're still gonna get a payout for whatever you would've gotten otherwise. That's just an example I think, of the type of de-risking that can happen, or should be happening, for these kinds of technologies. Which kind of goes back to my [00:12:00] point a moment ago about FinTech.

I think that's, that's one of the pieces of the FinTech puzzle that can really reduce the economic friction of adopting new technologies and, and, and then we all benefit from that. 

Adrian Percy: So let's get a bit more specific now. 

The topic of the today is climate ready agriculture. 

Mark Brooks: Yes. Yes. 

Adrian Percy: And maybe you could use other terminology for that concept. But you know, what we've noticed and seen is many companies, purporting to have solutions to help growers with things like climate resiliency, overcoming, threats due to inclement and, and severe weather conditions, also with the gradual, you know, rises in, in climate, in terms of heat and, and other aspects.

What does it mean for you and why do you think it's important? 

Mark Brooks: Well, it's a good, it's a good one. So climate resilient agriculture, to me means being able to still [00:13:00] produce food in a way that is adaptable and resilient to drought, extreme temperatures, and also the emergence of pests, weeds, insect disease, that, that are always present and sometimes becoming more present because of climate variability.

So I'm not sure I'm answering the question adequately. At least just steer, steer me a little bit. That's, that's what it means. So. There's a whole host of new technologies that are, have been developed that are in the market or are being developed in the entrepreneurial ecosystem that will help the entire system, adapt and mitigate that, those impacts, on the space and then capitalize on the positive impacts that are coming from it too.

Adrian Percy: Yeah. So let, let's get into that in a second. 

Mark Brooks: Yeah. Yeah. 

Adrian Percy: Of those actual technologies. But yes, I read that you've written about 

climate moving from a values language to an operating language. Yes. I posted that on LinkedIn recently. Yeah. Yeah. So [00:14:00] what, what do you mean by that, mark?

And, 

Mark Brooks: yeah, 

Adrian Percy: and, and how does that shift, what does that shift mean to growers? To companies, 

Mark Brooks: yeah. 

Adrian Percy: Who are looking to engage in this space? 

Mark Brooks: So I think historically, historically being the last, you know, 10, 15 years or so, when we, the royal "we" talk about climate, often it's been centered around sustainability and ESG and, you know, it, and, and stuff like that.

And that's very important and I'm personally a subscriber to that. However, I think what I mean by operationalizing it, is sort of translating that into p and l, translating that into operating or CapEx or opex. And so what I'm beginning to pick up on both in North America and in Europe is language that shifting.

Away from climate resilience or ESG and shifting more [00:15:00] towards, adaptability, resilience, defense, supply chain optimization, these sorts of words. And when we say it in that way, then, then it becomes. More financial, right? It becomes more the, the thinking, the language, the perspective of climate becomes more embedded, I think, into the p and l of a business or into the opex planning of what's going on or into the, into the investment planning of where to put capital.

In order to grow. That's, that's what I mean by that language. And that's happening. It's been happening for a while, but I think it's beginning to kind of pick up a little bit, especially as mid- cap and large- cap businesses are beginning to see more and more of the impact of drought or extreme events, storms, hurricanes, you know, these sorts of extreme events which are, which are happening.

I mean, for example, you know, Levi and Strauss, the, you know, the denim jeans, jacket maker. That's, they're [00:16:00] now talking about this in their financial 10 k, about how that's becoming part of their CapEx and opex planning. And I think the same thing is happening in all kinds of industries and materials and textiles.

It's been happening for a long time in the ag space as well, because I would argue that everything at ag is under the umbrella of climate or whatever you want to call it, because it's, it's, it's connected so closely to, to those types of events. 

Adrian Percy: So if I could move you upstream from this kind of market driven approach that you're describing to mm-hmm.

What is going on at universities and research institutions? 

Mark Brooks: Yes. 

Adrian Percy: What do you see as our role, in terms of, you know, developing the science and the foundations for some of these technologies that will be needed for the future? 

Mark Brooks: I cannot overstate the importance and criticality of universities [00:17:00] in innovation research for agriculture and food and climate resilience.

Because the research that comes out of universities, 

And I'll pick on the PSI NC State, for example, the research that's coming out of here and the companies that you are incubating and, and spinning out. This is exactly what universities are good at doing and what they should be doing more of because very few venture capital investors, very few large corporations, despite the interest in this kind of innovation, very few of those players are going to put capital at risk at the earliest stages of commercialization. 

AgTech 360 discusses breakthrough technologies that are impacting growers, businesses, and consumers hear from industry and academic experts about what's on the [00:18:00] horizon.

Mark Brooks: And universities are uniquely positioned. To take something from the lab, from the benchtop, from the research center, take it from that to the next step, which is beginning to figure out how do we commercialize this? What would a company look like? What would the commercial opportunity be? And start to kind of put the skeleton together around that to see if they can find a good product market fit.

If the answer is yes, then it's much easier, I think for venture investors and corporations to put capital at risk to, to grow those types of innovations. In the absence of that, I would argue that the, that the, that pace of innovation slows down. And so to me, universities like what you're doing, Adrian, NC State.

That work is a, is a true accelerant for innovation. And I think the [00:19:00] whole world benefits from that. Whether you're a big company or an investor or even just a consumer. Everybody benefits from that research. And then in particular, the research to commercialization piece that is absolutely paramount.

Adrian Percy: So 

do you have any advice then for those researchers that do have the ambition or do have the desire to take something. All the way, or, or at least to the market, to the real world, as it were, out of the university lab, out of the greenhouse, out of the research farm. I mean, what kind of things should be in their minds as they, as they, you know, go through that process?

Mark Brooks: I think the first thing is, is to think about the problem that you're trying to solve. I mean, I, I was an academic for a while and I understand the joy of doing research just for the pure sake of finding truth and discovery. That's what science is, and I love that. But in or in order to. Convert that into economic value in order to convert that into a company that you form, or [00:20:00] something that can be commercialized, you've gotta really think hard about the problem that you're trying to solve and how your.

Your, your, your, your gadget, your, your gizmo, your technology is going to solve that problem. So I think that's, that's one is like really understand the problem to be solved and how you're gonna get there. And maybe the second part is don't be afraid to reach out to corporations, to investors. To people who are, who are, you know, in the business space who understand that problem and get feedback from them, ask them questions, use them as a resource for learning and access to the markets that you're trying to permeate or penetrate or get into.

Even if those people are not the ones that buy your thing, in the end. They can be tremendous resources for just information and for connections. You know, kind of a network broker connecting you to others in that space. And the amount of learning that [00:21:00] can come from that is is tremendous. And then translating that back into the work that you're doing, I think is, is really critical.

So two things, problem to solve and then like, reach out and connect with businesses. 

Adrian Percy: So that was the advice you would give to on the research side, but I'm also curious on the investor side. So 

what advice would you give to VC type investors who are looking to. Make their mark in, let's say climate resiliency.

What, what kind of things should they be thinking about and looking into when they're considering an investment? 

Mark Brooks: I love it. So I would, for VCs and having been on the VC capital allocation side, I, I, I can speak to this. I think it's a few things that come to mind. One is get familiar with the universities, the research labs that are developing new technologies that are relevant for your investment thesis. Even if it's not investible today, they're gonna be a [00:22:00] great resource for learning about what's emerging, what's coming out, what's around the corner, because those are the things that will be investible, arguably within a couple of years.

So that's, that's one I think. And then I think the second one is patience. Technology is in the, in the climate resilience and ag. You know, food and energy, transition space and material sciences, these kinds of innovations don't move fast. It's not like we're making software, you know, or this is not gaming where things move quickly.

These are spaces that move. Much, much slower, which means that the profile of capital, that, of risk capital that goes to fund these innovations, that profile needs to be patient and, and able to stay and be patient as that technology grows and finds its way into the commercialization ecosystems. And I think that's.

That is what [00:23:00] I just said there, that is a shift that is happening. It, it's been happening for a few years and I think that shift is, is, is happening in a positive way. There's more patient capital coming in, and the less patient capital that's sort of mucked things up a little bit, that's, that's, that's going away, which is a good thing.

So my advice to VCs would be, get familiar with ecosystems of, of university research and, and also make sure you've got that patient capital lens. 

Adrian Percy: And then tapping into another aspect of your experience, which is 

working with A CVC, with a corporate venture capital Yes fund. How does that differ in terms of what they're looking for in terms of the risk and the types of technology they're willing to invest in compared to say a more traditional venture capital group?

Mark Brooks: Yeah, love it. So the corporate venture capital, very similar to a venture capital fund, just. For the audience kind of comparing and contrasting real quick financial venture funds, they're investing primarily free financial return [00:24:00] period. A corporate venture capital fund. They want a financial return on.

Yes, but they also want the strategic, value of having access to emerging technology, having access to stuff that they can bring into the corporate, to commercialize or feed the r and d engine or, or, or just to learn about the space from a corporate VC perspective, what they're looking for, is going to be unique technology that's complimentary to their existing r and d portfolio.

Or technologies that, are going to be able to create new categories of innovation or new categories of products for the corporate. That's the other way to look at it too. CVCs often, not always, but very often have a little bit more patience in the capital, you know, the, the timeframes for returns compared to a financial pc.

But they also have the ability to bring the halo effect of the [00:25:00] corporate, you know, to the startup company that the halo effect, meaning regulatory expertise, go to market expertise regional. Country level expertise in different regions and countries around the world. So that's all really valuable, I think, to startup companies.

Adrian Percy: So if I'm a CEO or a founder that's looking for investment, I mean, how would I perceive the advantages or perhaps disadvantages of working through a corporate venture capital fund versus say, a financial venture capital fund? 

Mark Brooks: Yeah, I, there's pros and cons of course, right? The, the positives would be, like I said, the, you know, the access to the go to market, the regulatory expertise and help, all of the things that a corporate can do in terms of, you know, it could be a great channel for selling your, your product eventually could also be an eventual acquirer of your company or pieces of your company.

That's all really positive stuff. So from that point of view, lean in and, [00:26:00] and, and, and get. You know, get acquainted, be be be friends, be closer. There's risks to corporate, investment as well. Which as we all know, corporates, you know, tend to move a lot slower. There can be often churn of people coming and going.

So you can kinda lose connections or lose, lose the relationship with key people. Which is why I would suggest to startup company, entrepreneurs and boards and investors, you know, don't rely on just one contact at the corporate. Have, you know, have a contact with the CDC, have a relationship with the r and d.

Multiple people in r and d have a relationship with one or more people in the commercial part of the business that way, you're learning, you maximize your learning pipeline through that, but you also kind of de-risk. You de-risk the relationship a little bit, so as, as people come and go, you know, you still have continuity of knowledge with the corporate.

Adrian Percy: So, mark, 

as we wrap up, I'm gonna ask [00:27:00] you to do something a little bit challenging, which is to try to look through all of these different perspectives that you've, we've been talking about. So be it as a researcher, as a entrepreneur, as an investor, where is the kind of best source of alignment with all of those different.

Groups in order to move forward this whole concept of climate resiliency. 

Mark Brooks: Um, I, yeah. I think the best source of alignment, I think is going in the case of agriculture. I think the best source of alignment is the farmer, the producer of the food, the one who uses the technology, the one arguably who has the margins that are the tiniest of anybody else in the entire value chain.

So I think that's, there's that, if you're talking about kind of the downstream food. I think it's maybe alignment around the, the consumer, you know, [00:28:00] the, the human health outcomes of you and me and anyone who's listening to this, that aligning around that I think is, um, is what I would suggest is the answer.

And if you're talking about other climate resilient sectors like energy transition or other spaces, I think it's again, kind of aligning around, aligning around where. Where the economics of the whole thing are the most fragile or the most sensitive, or the most, the most uneasy. And I think that's because that's where the pain is.

That's where the, that's where the biggest pain is. That's where the biggest risk is. And if you can reduce that pain for whoever that player is, or de risk. World for whoever that player is. You're gonna get traction, you're gonna get interest, you're gonna get attention. And maybe that's not where you need to be in the end, but that's where I would start.

Adrian Percy: Mark, thank you so much. 

Mark Brooks: my [00:29:00] pleasure. Thank you, Adrian. 

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