Monsanto venture capital group brings tech-world approach to agribusiness

CHICAGO – It wasn't the kind of statement likely to win the hearts and minds of those who consider Monsanto synonymous with Big Agriculture.

"If you think about it, there are two people on Earth that need to know a lot about remote sensing (technology) — Monsanto and the CIA," said John Hamer, managing director of Monsanto Growth Ventures, the venture capital arm of Monsanto.

"The CIA needs to look in nonpopulated environments for things. And agriculture is something of a nonpopulated environment," Hamer said.

Some context: Hamer was talking about technology, such as drones or even satellites, that could provide a constant flow of images of what's happening on a given farm. Hamer's unapologetic about Monsanto's aggressive pursuit of innovations in digital agriculture, data science and genetic engineering — the kind of technologies that Monsanto executives say are critical to addressing global food insecurity.

Based in San Francisco, Monsanto's venture capital group invests in cutting-edge Silicon Valley start-ups and sometimes acquires them. So far, Hamer's team has invested in 12 firms and is poised to announce another round of investments next month.

Among the firms that have joined Monsanto is 640 Labs, a Chicago company that makes hardware that plugs into farming equipment and yields data. Acquired in 2014 by Climate Corp., the technology subsidiary of Monsanto, 640 Labs soon will be doing business in Europe — an ancillary result of Climate's recent acquisition of VitalFields, an Estonia-based software company, Hamer said.

Monsanto Growth Ventures has had conversations with the CIA's venture capital group, In-Q-Tel, also based in Silicon Valley, but hasn't done any deals with it — yet.

Q: Monsanto eventually acquires some of these start-ups through Climate Corp. Are there other avenues through which Monsanto would acquire them?

A: We acquire them as Monsanto as well. We look at it as three ways we can work with entrepreneur. I can be an equity investor in your company ... We can do a partnership. I can bring nondilutive capital into your company in the form of a partnership, a license agreement, a testing agreement, and go test your stuff on 80 million acres of corn, 40 million acres of soybeans. Test it in South America. Test in it Chile. Nobody else can do that.

And lastly, if the time is right, and it's right for your company, there's the opportunity for (mergers and acquisitions) ... And if it's right, stay at Monsanto. And if it's not, leave when you feel like leaving. We don't have to get married for life. We can just move in together for a while.

Q: What do the advances in genome editing mean for Monsanto?

A: First of all, we can speed up breeding. Let's say I have a variety of tomatoes, a modern, domestic, commercial variety of tomatoes, but it's susceptible to a certain disease. So now, I find a variety, let's say it's a heritage variety, it doesn't yield very well and the fruit looks kind of weird, but it's very resistant to the disease ... I can dramatically shorten the breeding time. Some might say that's a GMO. No it's not, I have not put a foreign gene in there. The mutation I've introduced already exists in nature in this tomato variety. I haven't introduced anything that's new to nature. I've simply sped up the process.

A: No, I think the question is can we produce better varieties faster and I think the answer is, to every plant scientist and academic, yes, genome editing is going to make us produce better varieties a lot faster ... The big question is how will this all be regulated. There's a lot of different views emerging ... The U.S. is still working through some of its regulatory views ... There are other places in Europe that are going to take a stricter view. They're going to say if you change so many things, we're going to call it GMO. That seems to be the way Europe's going.

Q: Does the debate on labeling food with genetically modified ingredients have any bearing on what you're looking at and how consumers may respond to something that's been genetically modified?

A: It's hard to run into someone who hasn't heard of genome editing ... So that's good, the public is hearing about it and it's hearing about it in a positive way about what can be done with it ... I think there could be more acceptance but the jury's out.

Q: Does the Monsanto name help or hinder you in forming partnerships with these start-ups?

A: Monsanto is not fooling around when it comes to digital agriculture and big data and the use of data science in food production. Monsanto is really all in ... We're present and accounted for in Silicon Valley ... We're going to partner with companies and help them grow. It's very rare that we get this sort of anti-GMO backlash in that part of the world. If we get a backlash, it's "we don't want a corporate investor right now." Silicon Valley is a very data- and science-driven place.