PitchBookPitchBook Data,Inc.EMERGING TECH RESEARCHJohn Gabbert Founder,CEOBiologicals Bring Nature BackResearch and EditorialPaul Condra Head of Emergingto AgricultureSustainable alternatives to synthetic agricultural inputsInstitutional Research GroupAnalysisaccurate,and hard-to-find data for professionals doing business in the private markets.Alex FrederickSenior Analyst,EmergingTechnologyDataOverviewTJ MeiData AnalystThe agricultural industry is undergoing a transformative shift toward sustainableand environmentally friendly farming practices.One of the key facilitators ofpbinstitutionalresearch@pitchbook.comthis change is the adoption of agricultural biologicals-a category of productsderived from natural sources that enhance crop productivity,optimize soil health,Publishingand reduce the reliance on traditional chemical inputs.Despite an overall tepidmacroeconomic environment and a pullback in VC activity,demand for biologicalsDesigned by Joey Schafferhas remained robust.We estimate this industry will generate close to $15 billion inPublished on January 19,2024revenue in 2023,with a total VC investment of nearly $1 billion.Agricultural biologicals encompass a diverse range of products,includingContentsbiopesticides,biofertilizers,and biostimulants,among others.Unlike conventionalchemical agricultural inputs,biologicals leverage the power of living organismsKey categories of agricultural biologicalssuch as bacteria,fungi,and plant extracts to promote plant growth and protectcrops from pests and diseases.This category has experienced rapid growth in newBenefits and challengescompany formation and venture funding.Despite market volatility affecting fundingMarketin other industries,strong industry drivers have kept VC funding for biologicalsrobust.This report provides a comprehensive overview of agricultural biologicals,Macrodrivers5examining their benefits,challenges,venture activity,and role in shaping the futureVC activityof sustainable agriculture.ExitsKey categories of agricultural biologicalsBiofertilizers:These products contain beneficial microorganisms (such as bacteria,fungi,or algae)or their byproducts that enhance nutrient availability to plants,promoting healthier root systems and increased nutrient uptake.They work byestablishing symbiotic or associative relationships with plants.For example,nitrogen-fixing bacteria in biofertilizers convert atmospheric nitrogen into formsthat plants can use,promoting soil fertility.Biofertilizers contribute to improved soilfertility and long-term sustainability.Key VC-backed providers include Pivot Bio,Loam,Kula Bio,and Nutrition Technologies1PitchBookPitch Book Analyst Note:Biologicals Bring Nature Back to AgricultureBiostimulants:Comprising substances such as seaweed extracts and humic acids,biostimulants stimulate natural processes to enhance plant growth,development,and resilience to stress factors.They act as catalysts for physiological processes,resulting in increased crop yields and quality.Unlike biofertilizers,biostimulantsmay not contain live microorganisms.Instead,they often consist of compoundssuch as amino acids,seaweed extracts,humic substances,and other organicmaterials that activate physiological processes in plants.Key VC-backed providersinclude Indigo,Sound,Aphea.Bio,and NewLeaf Symbiotics.Inoculants:Inoculants,specifically microbial inoculants,are products that containbeneficial microorganisms,such as bacteria,fungi,or other microbes,and areapplied to soil or plant surfaces to establish symbiotic or beneficial relationshipsthat enhance plant growth,nutrient availability,and overall crop productivity.Themicroorganisms in inoculants interact with plants in ways that enhance nutrientavailability,protect against pathogens,or promote overall plant health.Examplesinclude nitrogen-fixing bacteria,mycorrhizal fungi,and plant-growth-promotingbacteria.Key VC-backed providers include Groundwork BioAg,AlgaEnergy,and FicosterraBiopesticides:These are naturally occurring substances,such as microbesor plant extracts,that control pests and diseases.Biopesticides can includemicrobial pesticides (for example,bacteria and fungi),plant-based pesticides,andbiochemical pesticides (pheromones,for example).Unlike chemical pesticides.biopesticides offer targeted solutions with minimal impact on nontarget organismsand the environment.Key VC-backed providers include AgBiome,Vestaron,Enko,and Invaio.Macrobials:Macrobials generally refer to large organisms used in agriculture forpest control.This category includes macroscopic organisms such as insects,mites,nematodes,and predatory or parasitic organisms.Macrobials are employed asbiological control agents to manage pests.For example,predatory insects such asladybugs or parasitic nematodes may be introduced to control pest populations ina targeted and environmentally friendly manner.Other examples include ladybugsfor aphid control,predatory mites for spider mite control,and entomopathogenicnematodes for controlling soil-dwelling pests.Key VC-backed providers includeUbees,Beeflow,and BigSis.Semiochemicals:Semiochemicals are chemical substances that convey informationbetween organisms.In agriculture,they are often signaling chemicals used forcommunication between plants,insects,and other organisms.Semiochemicals canact as attractants,repellents,or disruptants in the behavior of pests or beneficialorganisms.They play a role in chemical communication within ecosystems.Examples include pheromones released by insects to attract mates,plant volatilesthat attract pollinators,and repellents used to deter pests.Key VC-backed providersinclude Provivi,Pherobio Technologies,and AgroSustain.2