'Seasonality can kill you as a company': Can a new standards framework help bring successful products to market quicker?

The playbook, based on the expertise of a consortium of experts including former ag executives, investors, and startup CEOs and edited by Leaps by Bayer, identifies two central problems facing the agtech sector. Namely, the time and cost it takes to develop agriculture products and the difficulty of reaching sufficient customer numbers absent partnering with existing incumbents. 

The report (which can be downloaded here​) is therefore an attempt to draw up for the first time a standard-setting playbook to harmonise the industry with a clear standard nomenclature and clarity on defining R&D pipeline stages, costs, and the effort needed to bring the next generation of ag products to market.

Meant for the education of agtech and climate investors entering ag, for agtech startups, and for those curious about how agriculture product development works, the goal is to guide start-ups, investors, and industry on how to develop new agricultural products, beware of pitfalls, and increase the odds of success for all players.

The framework aims to "create transparency to allow people to plan and collaborate better and then have a higher chance of success," explains Paimun Amini, senior director of Venture Investments for Agriculture with Leaps by Bayer, and the leading author/editor of the report.

In ag, the seasonality aspect “can kill you as a company”, he tells AgTechNavigator​.

“One year of missing yield is a lot of funding out the window. We're seeing that happen time and again."

Asymmetry between agriculture and pharma​

The context for the report is that the authors have noticed a mismatch of understanding throughout the industry regarding the complexity, time, and cost of ag pipeline development, unlike the clear and well-defined phases of drug development in pharmaceutical research.  

This lack of clarity has made planning, budgeting, and developing new agricultural product innovations challenging for start-ups.

Ag and pharma are both are equally important, Amini believes. But as interest – especially in climate and sustainability solutions – grows he wants to see agricultural r&d begin to match the clear and well-defined phases of drug development in pharmaceutical research. 

Previous experience of what it's like to bring a product through an r&d cycle to market is more limited in agriculture comparted to the pharmaceutical sector, Amini says. As a result, there is asymmetry in terms of what the phases, time and costs are.

The new framework therefore hopes to provide transparency so that “start-ups can better plan their budget; investors can better understand where a company is in its phase of development.” The hope is that if all industry players are speaking the same language it will create better interactions and partnerships.

"There's a lot of interest coming into agriculture,” he says. “But because of the unknowns and fear of what it takes to get products to market relating to timelines and cost, there is some trepidation in terms of pulling the trigger to invest in ag solutions.”

Bayer aims to give that understand so that there is less fear of the unknown for ag investors. Once that happens, Amini believes, ag can begin to match pharma in terms of investment.

“If you look at pharmaceuticals it still also takes 10-13 years to bring a product to market and takes well north of 500 million dollars to do that for just a small drug. 

"But what's been more well defined on the pharma side is understanding these phases of product development and a shared nomenclature so when a product hits phase 1 trials, for example, you see this big M&A opportunity in the market from a lot of differnt players and a lot more exit opportunities for investors.

"In the ag side we don't always have the same understanding of when a product is ready to go to market. It doesn't seem as well understood. By bringing the same understanding of phasing and timelines you're allowing big companies and later stage investors to invest to guide companies towards IPOs or other milestones.”

Aiming to spur innovation across the whole sector​

Bayer’s standards playbook is based upon the expertise of a consortium of experts including former ag executives, investors, and startup CEOs, and edited by Leaps by Bayer.

Amini stresses it is designed to be embraced by the industry as a whole, not simply the start-ups and investors on the Bayer radar. He also hopes it will give more climate funds the confidence to invest in agtech.  

"It's hard for me to image being a climate fund and not engaging with agriculture when it's such a big percentage of that impact."