Ambienta is aiming to leverage its acquisition of Spanish biological crop solutions platform Agronova to enter the sustainable agriculture sector and capitalise on the fast-growing $21 billion biosolutions market.
Through this purchase, announced earlier this week, Ambienta hopes to drive Agronova’s further development by expanding its operations via organic growth and strategic mergers and acquisitions.
It sees strong sustainability-driven opportunities for growth, given increasing environmental pressures on crop yields and regulatory as well as consumer demand shifts toward biological alternatives to chemical fertilisers and pesticides.
Challenging funding environment continues
The announcement by one of Europe’s largest asset managers may reignite a hot topic as investment in ag biologicals and wider sector continues to fall: is venture capital currently the best fit for scaling agtech innovations?
Agriculture is a “slow-moving, risk-averse sector where rolling out innovation cannot rely solely on laboratory breakthroughs or high-tech product development – an approach typically suited to VC”, an Ambienta spokesperson responded.
Instead, introducing new solutions in this industry requires “extensive, multi-year field trials across various geographies and crop types, navigation of complex regulatory and registration processes in multiple jurisdictions, and the establishment of a skilled commercial organization”, we were told. “This team must be capable of educating both end-users (farmers) and intermediaries (distributors and agronomic advisors) on the tangible benefits of new products.”
The case for private equity capital to fuel agtech innovation
Successfully executing such a strategy calls for the typical capabilities and skills of private equity, the spokesperson claimed. This is “all about supporting established businesses in established, mature markets to accelerate growth via a suite of levers anchored on operational improvements, professionalized management, and system upgrades. In parallel, value can be unlocked through targeted M&A that further expand the platform, generate synergies, and deepen market penetration.”
They added: “Ambienta specifically is uniquely positioned to lead these types of projects and growth initiatives thanks to several factors including a long-standing and deep sector expertise in sustainable agricultural inputs, paired with a strong network within the agri-inputs ecosystem, a well-established pan-European presence, and a strong track record of executing complex international buy-and-build strategies.”
