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May 30, 2023 Message from Hugh MacGillivary, Anuvia Plant Nutrients CEO posted on LinkedIn: I write to inform my network that Anuvia Plant Nutrients has taken a decision to suspend operations and liquidate their assets. The company has terminated all its employees other than a select few to wind down the operation. by Shane Thomas, Upstream Ag Insights Anuvia was a fertilizer company manufacturing their own proprietary SymTRX fertilizer products (14-24-0-10S or 17-1-0-20S), including technology to increase nutrient efficiency, including biomaterial. Anuvia raised over $307 million, most recently announcing a Series D raise of $65.5 million in April of 2022. They had partnerships with leading organizations such as Mosaic and Novozymes. They hold some incredibly compelling patents in the input space (in my opinion, including for the delivery of bioactive molecules in coatings or surface layers of organically enhanced inorganic fertilizers, In 2021 they had products on over 500,000 acres. They had tailwinds behind their business, including the trend towards de-commoditizing each ton of fertilizer and leveraging bio-based material to enhance nutrient use efficiency. Their products plugged into an already established system for farmers, not changing the demands on a farmer's time or significantly changing the cost to operate. If you read the above, it isn't a stretch to imagine that Anuvia could be one of the more successful companies that have raised venture capital in agriculture. Instead, they are the most recent agtech organization to succumb to a challenging capital environment and a complex market landscape. Being a non-digital company reinforces just how hard it is to grow a new ag business of any kind. In December, their long-time CEO Amy Yoder left the company, which is never optimal. I suspect the answer to why this happened is incredibly nuanced, and I prefer not to speculate on the specifics. With that said, at a macro level, it is a reinforcement of three things: 1. Building fertilizer manufacturing facilities is incredibly capital-intensive. Not to mention, the know-how and prowess in efficiency does not happen overnight. Anuvia raised copious amounts of capital, but it's a drop in the bucket when it comes to scaling the manufacturing of bulk fertilizer across what they had stated as a 20,000,000 acre target by 2025. Reports from expansion plans and new facilities from the likes of Yara, Mosaic, and Nutrien have put the costs in the several hundreds of millions to $1 billion+ range, albeit these are for more scaled facilities, which illustrates the amount of capital necessary to scale fertilizer manufacturing. 2. I mentioned earlier that Anuvia products plug into the current farming system. This is true. However, they do not as naturally fit into distribution, aka the retail channel. New products take up precious storage space, and most retailers do not want to take on the risk of adding more storage with an unproven product or displacing a product with built-in demand (I'd argue they should, though, but that's a different conversation). 3. Next Best Alternative. I've never experienced Anuvia products, so I can't comment on performance or if the technology worked as they stated, which is an obvious question in this story. With that said, even if they performed well, the question becomes whether are they differentiated enough over the next best alternative to justify usage. This feeds into number two. Even if they are differentiated, is it worth convincing a farmer to upgrade products over others from the likes of Mosaic or Nutrien? People will have various opinions on that answer, ultimately though the mentality of the average retail skews towards minimizing change. These all contributed to macro headwinds for Anuvia. Why didn't someone acquire them? To read the entire report click here. Tweet |
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