BIOPESTICIDES FIRM VESTRON RAISES $18 MILLION IN INVESTMENTS
Feb. 22, 2021
Source: WRAL TechWire news release
Research Triangle Park - Vestaron, a company developing biopesticides for targeted, safe, and efficient crop protection, has raised $18 million in an oversubscribed B-1 financing,
Northpond Ventures led the round. Northpond and additional new investor, Cavallo Ventures, the venture arm of Wilbur-Ellis, join continuing investors Novo Holdings, Syngenta Ventures, CGC Ventures, and Anterra Capital.
The company moved its corporate headquarters to Research Triangle Park from Kalamazoo, Michigan, in 2019. It previously raised a $40 million B round from an impressive investor syndicate.
Peptides (small proteins) have the same proven modes of action (a nerve and muscular attack) and the same efficacy as traditional synthetics but with the safety and environmental friendliness of biologics.
These products provide a new tool for growers as some existing products face increasing regulatory pressure due to environmental concerns and others decline in their efficacy due to the development of resistance by insects.
"Insects have developed resistance to every chemical attack developed thus far, so the industry is hungry for innovation," said Anna Rath, CEO of Vestaron, in an interview with WRAL TechWire. The last product using the most effective mode of defeating insect pests was introduced in 2007. "If farmers have used the same chemistry on insect pests for a decade, it's losing its efficiency."
Rath explained, "Product development costs and timelines are increasing, and the pace of introduction of new active ingredients is decreasing. A sustainable future for agriculture requires innovation. Many existing solutions are being pulled from the market as a result of environmental concerns, and those that remain face the prospect of far more rapid development of resistance with fewer options for rotation"
She added, "Without a solid portfolio of crop-protection solutions, agriculture faces the prospect of declining yields and, as a result, the need for a significant increase in land use in order to meet growing demands."
Rath noted that there some research suggesting peptides may be less susceptible to insect resistance.
Regulators focusing on more environmentally friendly agriculture products is a boost for the firm.
"It's good to see regulators moving things into more environmentally safe products," Rath said. Many conventional chemically based synthetic pesticides can also slay beneficial insects and pose risks to people and the environment.
Vestaron's proprietary platform for the optimization, production, and delivery of peptide-based biopesticides, led to the development of its novel class of crop protection products. Its nerve and muscular mode of action is "Far and away the most effective mode," Rath said.
Great First-Year Sales
Rath said the demand to participate in the latest round was greater than the company needed, but it took a bit more than originally planned to ensure continuing traction for its first peptide-based product, Spear. "We wanted to make sure we had enough to continued traction in the market."
Spear was launched both as Spear-Lep, targeting lepidopteran (butterflies and moths which begin life as caterpillars) pests in specialty crops and Spear-T, targeting soft-bodied insects such as thrips, whiteflies, aphids, mites, and drosophila.
The company had an impressive first year of sales for its Spear products.
Despite COVID headwinds, launch year 2020 sales were reached 3% market share in California pistachios. This strong market traction was fueled both by Spear's IRAC-validated novel mode of action and by its demonstrated efficacy on par with leading synthetics - including efficacy out to 30 days after application in a major study in almonds.
Good Prospects For 2021
Despite the pandemic, Rath said, "We have a very creative and motivated sales force. They got out there virtually, through social distancing, and found ways to interact in this environment. When farmers see the product with its novel mode of action work in their fields, it makes for a straight-forward sale, Rath added.
"I can't wait to see to see what this year looks like after what we did last year despite the headwinds," Rath said.
Vestaron has earned global recognition for its work, including the inaugural 2015 Bernard Blum Award for novel biocontrol solutions, a 2020 THRIVE Top 50 Growth-Stage honoree, and the prestigious Green Chemistry Challenge Award from the U.S. Environmental Protection Agency and the American Chemical Society Green Chemistry Institute in 2020.
The global crop protection industry is a $50 billion-plus annual market. Many of Vestaron's channel partners and major growers expect more than 10 times year-over-year growth in usage, the company said.