Singapore's Temasek Bets on 'Skyscraper Farms' As Growth Market

Joint Venture With Bayer To Develop Seeds

To Boost Food Security In City-State

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TAKASHI NAKANO, Nikkei staff writer

September 10, 2020

SINGAPORE -- Singapore's state-backed investment group Temasek Holdings has extended its business portfolio into urban farming, a concept that will aid the city-state in its quest to become more agriculturally self-sufficient.

Temasek and German pharmaceutical major Bayer established Unfold, a 50-50 joint venture, last month. The company will develop and market seeds for vertical farming both in Singapore and at its California headquarters.

Singapore produces less than 10% of the food it consumes. The government plans to raise the ratio to 30% by 2030.

Vertical farming, officials believe, is crucial to attaining that goal. The technique grows agroponic layers of crops under artificial light inside skyscrapers. Because the plants are not dependent on weather, the method is expected to generate large yields in a relatively quickly.

"Temasek is recognized as one of the leading investors in the food and agriculture segment," said Jurgen Eckhardt, head of Leaps by Bayer -- an investment arm of Bayer. "They have investments in, and relationships with, a range of vertical farming companies."

Bayer will provide plant genetic data to Unfold, which will first develop new varieties of lettuce, spinach and tomatoes, among other crops. The company will sell seeds to food producers.

Temasek will introduce companies to the technology and expertise at Unfold and other investment targets. Temasek holds a stake in Sustenir Agriculture, a Singaporean urban farming company, providing a channel for Sustenir to cultivate Unfold's high-yield seeds.

Vertical farming is projected to grow into a $12.77 billion market in 2026, according to Allied Market Research, up from $2.23 billion in 2018.

Temasek invested 3 billion euros ($3.7 billion) into Bayer in 2018 -- funding which helped Bayer complete the acquisition of U.S. seed producer Monsanto.

The company anticipates further investments in the agricultural sector.

"Whether it's in the area of an alternative protein, aquaculture, or crop science, it's an area that requires actually more capital," said Temasek International CEO Dilhan Pillay Sandrasegara. "So far it's done well for us and we're still keen to invest more in it."

Temasek has expanded its portfolio of life sciences and agribusiness investments. Allocation in the domains stood at 8% at the end of March, or five points higher than five years earlier. The size of the holdings is about $17 billion.

The coronavirus pandemic has heightened concerns over food security. Thailand and other trading partners temporarily imposed restrictions on exports. The Singaporean government doled out 30 million Singapore dollars ($22 million) in subsidies this April to help companies produce more eggs, leafy vegetables and fish.

"In Singapore, with less than 0.8% arable land, vertical farming innovation is critical," said Unfold CEO John Purcell.

This year, Temasek has invested in startups that develop meat and fish substitutes, as well as plant-based milk. GIC, another Singaporean state investor, in May picked up shares in Apeel Sciences, a U.S. company that developed an artificial peel for fruits and vegetables to extend shelf life.

The less-than-stellar portfolio performance has also factored in Temasek's investments into agribusiness. For the year ended March, the company reported a return of minus 2.3%, the first negative result in four years. Declining stock values of domestic companies such as the banking group DBS Group Holdings and the conglomerate Sembcorp Industries were behind the setback.

When Singapore Airlines sought to raise up to S$15 billion in rescue funds this March, Temasek was the first to indicate it would sign on in light of its status as a major investor in the carrier. Saddled with its role as a financial provider of last resort, the state investment group's ability to reap returns from investments in agriculture and other growth sectors will sway its performance.

Temasek has also stepped up investment in advanced medical fields such as biopharmaceuticals in the past year, with stakes in 10 companies revealed in 2020 so far.

Vertex Venture Holdings, a Temasek unit that oversees a fund specializing in the medical field, has invested in more than 20 healthcare-related startups, including American drug developer Elevation Oncology in July.

"COVID-19 has shone a light on the importance of continued R&D investment," said Lori Hu, managing director of Vertex Ventures HC. "It has revealed critical unmet needs in the health care industry. We continue to actively look at new deals."

Leveraging its broad network, Vertex took a stake in Israeli telemedicine platform operator Datos Health in April and invested in India's IVF Access Hospitals, which specializes in infertility treatments, two months later.

Through its investments in the medical field, Temasek is also involved in the global race to develop coronavirus treatments. It was part of a group of investors to pour $250 million into Germany's BioNTech, which is jointly developing a COVID-19 vaccine candidate with Pfizer. South Korean drugmaker Celltrion, in which Temasek holds a roughly 10% stake, has brought a diagnostic kit to market in the U.S. last month.

Investments in biopharmaceutical developers carry high risks, but the payoff can be large when a treatment successfully reaches the market. Holdings in unlisted companies accounted for 48% of Temasek's portfolio as of March-end, up six points from a year earlier.

Lead photo: Courtesy of Unfold - Vertical farms use hydroponics to grow crops inside buildings.

Agtech Sector Blooms As More Dollars And Startups Rush In

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Christine Hall | August 20, 2020.

Twitter: ChristineMHall

Farming has been around for thousands of years, but investments and startup activity in agricultural technology, commonly known as “agtech” or “agritech,” have only exploded over the past five years.

In fact, in each of the last two years, venture capitalists invested $4 billion in startups in the agtech space, according to Crunchbase data. Based on the $2.6 billion already given out as of Aug. 14 of this year, 2020 is poised to repeat or even exceed the previous years.

Better Food Ventures Partner Seana Day began tracking agtech startups more than five years ago. She said that farming is an area that isn’t typically tech-enabled. In fact, COVID-19 reminded the world about the food supply chain, she added.

“There was a disconnect between demand signals and supply, which is why you saw empty grocery shelves,” she said. “At the same time, the dairy farmers were dumping milk because they didn’t have a process in place to massively produce small consumer packaging.”

Day estimates that global food and agriculture fund managers have about $130 billion in assets under management, which is driving a surge in investments as well as a shift in thinking.

Farmers have historically been resistant to change, Day said, but at the end of the day, they are rational business people. That means that if a startup can show a farmer a product or service that will boost the return on investment—increasing revenue or decreasing costs—the company will have a better chance of making the sale.

The challenge comes in for tech companies that offer apps meant to save time and increase job productivity, areas that aren’t necessarily needed for farmers, she added.

There is also a shift in legacy food companies thinking digitally. Day points to Tyson Foods as an example. The meat producer earlier this month promoted Dean Banks to CEO. He joined Tyson as president last December from Alphabet’s high-tech incubator X.

“That is a huge signal from a company making bold moves, saying ‘we want to be a leader in this space,’” Day added.

New investments

This year has been particularly busy for the agtech innovation sector, as startups secured both big and small investments.

One of the largest went to Farmers Business Network, which raised $250 million in Series F funding earlier this month. Day said the San Carlos, California-based company was one of the pioneers in e-commerce models, helping farmers optimize their financial performances by finding demand for supply.

Meanwhile, Berkeley-based Pivot Bio announced a $100 million funding round in April, led by Breakthrough Energy Ventures and Temasek, to scale its microbial nitrogen technology. The company said the technology increases crop yields, and in turn, farmers’ revenues. Biodesign startup Geltor brought in $91.3 million in a Series B round in July, led by CPT Capital, to make proteins, such as collagen and elastin, but without animals. The startup’s products are used in beauty, and food and beverage products.

One of the newest is iFarm, a Finland-based startup providing indoor farming technology for growing fresh greens, berries and vegetables. On Thursday, it announced that Gagarin Capital led its $4 million investment with other investors including Matrix Capital, Impulse VC, IMI.VC and several angel investors.

iFarm, founded in 2017, has more than 50 ongoing projects with clients in Europe and the Middle East for 2020, Max Chizhov, co-founder and CEO, told Crunchbase News. The company will use the funding to develop its iFarm Growtune tech platform; expand into new regions in Eastern and Northern Europe and the Middle East; and will experiment with growing strawberries, cherry tomatoes, sweet peppers, radishes and other crops.

“We think this is an interesting time to be in agtech, and we think we are in the right time and right place, especially as there is more attention on food and agtech and a pipeline of investments,” Chizhov said. “We are focusing on how to change the supply chain, and we believe we are one of the solutions to solve this problem.”

Last week, we also reported on a new company, Unfold, which is focused on vertical farming. Bayer’s investment arm, Leaps by Bayer, and Singapore-based investment firm Temasek infused $30 million into the new company.

Unfold’s President and CEO John Purcell said he is bullish on the farming sector, seeing a need for genetics in vertical farming. The company has an agreement for certain rights to germplasm from Bayer’s vegetable portfolio that includes lettuce, spinach, tomatoes, peppers, and cucumbers.

“Technology has to catch up with the promise,” he said. “There has been an overall trend in produce moving toward vertical farming and greenhouse, but the hard part is you have to have the tech to make it feasible.”

The “tech” in question is lighting, mechanics and a system in place. Then it has to be competitive with the other forms of production so potential customers will see its value, Purcell added.

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New areas of agtech

Purcell sees three promising areas for the agtech industry:

• Major urban areas, where there is a desire for local, fresh food;

• Self-sufficiency, or helping places where there is limited arable land; and

• Produce supply chains, or getting food from the farm to fulfillment centers.

Ashley Tyrner, founder and CEO of Farmbox Direct, thinks there should be one more area: food as medicine. She is in the process of raising $10 million for her East Coast-based organic and natural produce delivery service.

Tyrner said she saw her business grow more than 2,000 percent during COVID-19. In that time, Farmbox also began working with Medicare to provide box services to patients identified as those who need to eat healthier to manage chronic disease.

“The climate has changed in Silicon Valley, and VCs are welcoming because we are doing food as medicine,” she added. “We were the first to find an insurance company to work with us to help patients change their eating patterns. We are creating a new space here.”

In the area of crop protection is Canada-based MustGrow Biologics, an agricultural biotechnology company taking natural compounds from mustard seeds and turning them into pesticides that fortify the soil.

The pesticide industry is valued at $65 billion, but most are synthetics, Corey Giasson, president and CEO of MustGrow, told Crunchbase News in an interview. The biologics side of the pesticide industry is growing, but is still worth only about one-sixth that amount, he said.

The slower growth is due to biologics in the past not being as effective as synthetic fertilizers, so MustGrow has been doing a lot of studies to show that its product works.

“Farmers want to use products that are healthy and safe, but need something effective to grow a crop that will suppress pests,” he said. “We also have a growing population globally, and we need to feed people, doing it in a safe, environmentally sustainable way.”

New opportunities

Crunchbase data shows that is the most active agtech venture investor, having made 20 venture investments in the agtech space since it was founded 10 years ago. It was most recently involved in India-based Intello Labs’ $5.9 million Series A round. The company uses image matching and machine learning to measure the quality of crops.

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A new player is FTW Ventures, led by Brian Frank, who on Thursday announced he is raising his first “problem-focused fund” aimed at early-stage food and agricultural startups.

Frank already raised the $4 million fund, in which he will invest in 15 to 20 deals at about $200,000 to $250,000. He has already made five investments, the most recent in April as a part of Plantible Foods’ $4.6 million seed round. He was also an investor in Plantible’s pre-seed round. The San Marcos, California-based B2B food technology company is developing plant-based protein.

Frank predicts some of the hotter areas will include hardware and automation, software and SaaS, novel products–such as Plantible–and personalized nutrition. He also said that consumers are driving the way food makes its way from the farm to the fork.

“I came into this sector from mobile technology, artificial intelligence, and machine learning, with a deep-seated passion for food,” he said in an interview. “There is a major shift in consumer trends as they look for more resilient and sustainable food. Climate change is both an effect of food and it impacts food. Plants can’t just move to a new climate, so we need to help them.”

Illustration: Dom Guzman

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Temasek Backs US $30m Firm For Vertical Farming Innovation to Boost Singapore's Food Supply

Temasek Is Partnering With A Unit of Bayer To Form A US $30 Million

Company To Develop Breakthroughs In Vertical Farming.

August 12, 2020

SINGAPORE - A new US $30 million (S$41.2 million) company has been formed to develop breakthroughs in vertical farming, a move that will help to further reinforce Singapore's food supply.

Called Unfold, it is a tie-up between Singapore state investment firm Temasek and a unit of German pharmaceutical and life sciences giant Bayer.

The Straits Times understands that they will have an equal share of the company, which is incorporated in the United States.

Its primary focus is on improving the quality and variety of food as well as boosting the efficiency of its production, including that of popular vegetables such as lettuce and spinach.

In doing so, it will ensure the safe and reliable supply of food, something that is vital for countries with little arable land and in times of crisis like the Covid-19 pandemic, said Bayer on Wednesday (Aug 12), when announcing the union between its investment unit Leaps by Bayer and Temasek.

Temasek's head of agribusiness, Mr. John Vaske, noted that food security is a priority for Singapore, pointing to the country's "30 by 30" goal, which is to produce 30 percent of its nutritional needs locally by 2030.

He also told The Straits Times that Singapore has been formative in developing vertical farming. "So, we have insights and knowledge of the industry that Unfold can benefit from through the set-up of its commercial, research, and development operations here."

These operations will also be established in California, where Unfold will be headquartered in the city of Davis.

The focus on the genetic potential of vertical farming also sets the company apart from most vertical farming start-ups, which invariably concentrate on developing more efficient infrastructures, Bayer said.

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The aim of the venture is to improve the quality and variety of food as well as boost the efficiency of its production. PHOTO: BAYER STOCK PHOTOS

Unfold has already entered into an agreement for specified rights to germplasm, or seed genetics, from Bayer's vegetable portfolio, a move that will enable it to develop new varieties of seeds. It also plans to come up with agronomic advice that is tailored for growing crops in the unique indoor environment of vertical farms.

These farms, also known as indoor farms, leverage on artificial light to grow crops, are less dependent on man-made chemicals, and optimize the use of water.

The company's chief executive officer is Dr. John Purcell, who was previously Bayer Crop Science's head of vegetable seeds research and development, said Bayer in its statement.

Dr. Purcell said that Unfold's investment in germplasm and crop growth models is timely as the two fields are "largely underserved"."

Some technology companies do not have access to germplasm resources. The power of Unfold is that we will combine the expertise and 100 percent focus on the genetics for vertical farming, with access to the best in class germplasm of the Bayer vegetable seed business," he added.

www.bayer.com
www.leaps.bayer.com
www.temasek.com.sg
unfold.ag

Lead Photo: PHOTO: BAYER STOCK PHOTO

Temasek, Bayer Form Joint Vertical Farming Venture In California

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Jovi Ho

 August 12, 2020

Temasek Holdings is partnering with German multinational pharmaceutical and life sciences company Bayer AG to create a new vertical farming venture headquartered in California, as part of Singapore’s plans to boost the city-state’s supply of sustainable, locally grown produce. 

The joint venture between Temasek and Leaps by Bayer, the impact investment arm of Bayer AG, will be a US entity with commercial and research and development operations in both California and Singapore. 

The new venture, Unfold, will focus on innovation in vegetable varieties with the goal of lifting the vertical farming space to the next level of quality, efficiency, and sustainability.

Instead of focusing on external infrastructure to support plant growth, Unfold will look within the plant itself. 

“By utilizing seed genetics (germplasm) from vegetable crops, Unfold will focus on developing new seed varieties coupled with agronomic advice tailored for the unique indoor environment of vertical farms,” says Bayer. 

Unfold has raised US $30 million (S$41.19 million) in its initial funding round and entered into an agreement for certain rights to germplasm from Bayer’s vegetable portfolio. 

Global food challenges are forcing countries to rethink traditional farming practices, says John Vaske, Head of Agribusiness at Temasek.

“We need to ensure secure farm-to-fork supply chains in urban settings while we also work to reduce the overall environmental impact of farming. Reducing food waste and improving the safety, traceability and nutritional value of food are all the more important as populations grow and demand for food expands. Investments in companies such as Unfold allow us and our partners to support innovative, sustainable solutions that will benefit all of us over the long term,” says Vaske. 

Back in 2018, Temasek acquired a 3.6% stake in Bayer for 3 billion euros (S$4.85 billion), bringing its total stake to about 4% with 31 million new shares. The share sale to Temasek was part of Bayer's efforts to fund its planned US$62.5 billion takeover of seed maker Monsanto.

However, according to the latest Bloomberg data, Temasek no longer appears to own a substantial stake in Bayer. 

Unfold’s President and CEO Dr. John Purcell will move from his role as Head of Vegetables R&D, Crop Science at Bayer. 

“As a company fully focused on the vertical farming industry, Unfold will combine leading seed genetics with the best agtech experts in order to dramatically advance productivity, flavor, and other consumer preferences,” says Purcell.

“We look forward to serving the market through partnerships with vertical farming operators, technology providers, and others across the produce supply chain.”

Prior to joining the food and agriculture industry, Purcell was a post-doctoral researcher at the United States Department of Agriculture from 1987 to 1989. He earned his Ph.D. in Molecular and Cellular Biology from the University of Massachusetts. Purcell is also part owner of a family ranching operation in Montana.

Vertical farms, also known as indoor farms or plant facilities with artificial light (PFAL), help crops grow more quickly while using less space and fewer natural resources.

Investment in the vertical farming market has increased significantly in recent years mainly due to decreasing arable land, increasing market demand for local, sustainable produce, and migration towards mega-cities.

Singapore’s "30 by 30" agriculture goal aims for 30% of our nutritional needs to be produced locally by 2030, though this figure is smaller than 10% currently. 

According to the Singapore Food Agency (SFA), the 77 leafy vegetable farms here accounted for 14% of total consumption in 2019. 

Lead Photo: Credit: Bayer stock photo