Biological revolution in agriculture
On a mission dedicated to food security
Aphea.Bio is a fully integrated microbial product development company building the agriculture of the future. They emphasise food security, a safe and healthy food chain, and novel, science-based solutions. CEO Isabel Vercauteren clarifies: “We are on a mission to enable sustainable, reliable, and profitable farming, solving critical global challenges. Microbial alternatives are cutting-edge products that help reduce on the one hand the use of harmful chemical crop protection products, and on the other hand the use of synthetic fertilizers. We are addressing all product segment types a farmer is more or less acquainted with: bio-stimulants or products that promote the growth of crops, and biocontrol products like bio-herbicides, bio-fungicides, and bio-insecticides”.
Ground-breaking platform
Unique for the Aphea.Bio approach is the fully integrated, cost-efficient platform branded as APEXÔ, which bundles different technologies in bioinformatics and microbiome mapping, state-of-the art microorganism culturing, high-throughput crop phenotyping and data analysis. Isabel explains: “Our platform covers discovery to market. It allowed us to develop a well-advanced candidate-product portfolio. Last summer, we entered a key phase for the company through a distribution partnership with Syngenta, one of the world’s leading agriculture companies, bringing a wheat-stimulant to market. With this milestone, we have demonstrated that the platform is working efficiently.”
Series C: from R&D to commercialising
After successful series A and B financing rounds that supported the development of a stable product portfolio, the series C aims to transition and transform the company from R&D to commercialising the products. According to Isabel, the process was long: “With an objective of bringing approximately 30 products to market, we initially calculated that an amount of 55 million would be needed to break even. Eventually, we oversubscribed for 15 million. We capped it to 70 million along the desire of our lead investor. I can say that each round has been lengthy and tough, but with the series C there was pressure on valuation. We needed to prove more than ever that our product was unique, while VCs were more risk-conscious than usual. Once we reached a critical mass of investors, the others followed.”
From Europe to the Americas
The money raised will serve four purposes, each being allotted around 25% of the total amount:
- Launches of well-advanced large acre products like winter wheat and maize in Europe, and complying with European regulatory and registration requirements;
- Expansion to become a global player, by entering the US and Brazilian markets;
- Starting new product developments to keep the R&D machine running; and
- Growth of the team and capabilities. The current 55 team members should grow to 75 in 2025. In terms of facilities, Aphea.Bio just opened a pilot production-unit plant in November, enabling to scale up products for commercial production.
Isabel also points out the importance of having acquired the Certified B CorporationÔ label: “It’s a golden standard for demonstrating high social and environmental impact standards. That, and Europe’s Green Deal policy, are playing in our cards of sustainable agriculture. Farmers need biology-based products like ours to fertilise and protect crops in a more sustainable way.”
Mix of existing and new shareholders
Aphea.Bio received strong support from returning investors and other existing shareholders. “The fact that the existing investors joined the consortium massively, meant that they were still standing behind us, and that we were in line with the promise we made”, says Isabel. The main investor is Dutch venture fund Innovation Industries, while Korys, FPIM and BNP Paribas Fortis are also coming on board. In addition, the Bill & Melina Gates Foundation joined as a new investor. Isabel also said that while previous investment rounds were more focused on technology and innovation, the last one had more focus on commercialisation and long-term impact, which is normal in this phase of the company.
From a LinkedIn message to developing crops in poorer countries
Isabel tells us how memorable it was to get the Bill & Melinda Gates Foundation on board: “It all started with a simple LinkedIn message checking on a possible alignment between our strategy and the mission of the Foundation. Long story short: after several meetings and visits, we got the opportunity to get their funding to address the unique needs of smallholder farmers in Sub-Saharan Africa and South Asia. We will start field trials for cassava, rice, sorghum, and poultry millet. We want to ensure accessibility and affordability to our technology in low-income countries.” Getting the Foundation on board is very impactful, as their eligibility criteria are stringent.
Aligning shareholders
One of the bigger challenges in the financing round was to align all shareholders along the projected opportunities. “While VCs and other investors mainly look at financial returns, we had to explain to the others that having an investor with a charitable purpose was not about ‘giving money away’. We see it as an opportunity to disseminate our technology worldwide. Africa and South Asia were initially not the markets we were going after, however, it gives us new opportunities, as the products launched there can be developed anywhere else in the world. And when you are supported by a huge network like the Foundations’, the opportunities are enormous,” she testifies enthusiastically. With the help of detailed side letters to the shareholders agreement, eventually everyone got aligned on the use of funds.
Ghent, tech capital
What about the success of Ghent as an epitome of world-class ‘agritech’? Isabel looks back at some historic facts: “Aphea.Bio has been created as a spin-off of the Flanders Institute for Biotechnology (VIB). One should remember the success of Plant Genetic Systems, a ground-breaking biotech company in Ghent, followed by many other memorable ones, including DevGen and CropDesign. There’s also the link with the universities, underpinning the scientific evidence for R&D. In addition, Ghent has positioned itself as one of the biggest hubs for innovation and technology, including green biotech. And a great city to live in. All that, works as a magnet to attract talent from all over the world. New talent multiplies into further developments and innovation, everything is interconnected.”
What should others know?
Isabel gives some advice to other companies starting their funding journey: “Be ready for the biggest rollercoaster of your life! Come very well prepared to the table with a business case that no single investor wants to miss. Show how unique you are and how they will earn their money back. Support your solution with great technology. Investors value a company based on their IP (Intellectual Property) position, which you need to protect. Surround yourself by a solid, credible team. Finally, make sure you align your priorities with those of the investors: make sure you understand their way of working and timelines.”
A guide amazed by the M&A Award
We conclude our conversation with the leadership style of Isabel as a CEO: “I think I’m quite a down-to-earth person. You should ask my team if I’m a good leader, but I think I’m more a guide to them than a controller. I trust they say, “she knows what she’s talking about”, thanks to my knowledge in science and the agricultural sector.”
Isabel admits she was amazed to get the M&A Award for Best Venture Capital Deal in Life Sciences: “It was a surprise. It’s a great recognition of all our efforts and achievements to bring a sustainable product to the market. I can humbly say that it’s the biggest and most successful round in our sector in Europe, and probably also one of the biggest in the US.”
Aphea.Bio emerged as the winner at the M&A Awards 2023 in the category of Best Venture Capital Deal – Life Sciences 2023.
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