June 6, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Leading sustainable food chain investor Paine Schwartz Partners has made an undisclosed strategic growth investment in Elemental Enzymes, a specialist in enzyme, peptide, and biological chemistry that is developing naturally occurring enzymes and biochemicals for use in commercial agriculture. 

Previous funding secured by Elemental Enzymes came from the Missouri Technology Corporation TechLaunch Funds Program, St. Louis Arch Angels and Centennial Investors Angel Investor Network in 2012.

A shrinking base of arable farmland, tight supply of traditional agricultural inputs over the past five years, a rapid emergence of regenerative ag practices leading to willingness by farmers to adopt new systems that can result in higher yields while being environmentally safe, and consumer sentiment calling for cleaner supply chains and less agrochemical usage, have increasingly brought the biologicals category onto the radar of conventional global giants and investors, resulting in more significant funding rounds.

Agricultural pests are the root cause of social, economic, and health damage that account for $70 billion in crop losses in the U.S. alone. However, not only are traditional pesticides broadly harmful to beneficial insects alike, but also present significant harm to our environment and human health, while targeted pests continue to become more resistant to our tools at-hand.

On a global scale, more than 600 species of pests have developed a resistance to traditional agro-chemicals on some level – sometimes to entire “families” of pesticides, cutting a swath through what farmers have available to work with to protect their crops.

Considering that 75 percent of food crops depend on insects for pollination, it is of the utmost importance to develop successful, targeted, and safe solutions to this problem. 

Co-founded in St. Louis in 2011 by  CEO Dr. Brian Thompson, COO Dr. Katie Thompson, and CSO Dr. Ashley Siegel, Elemental Enzymes is tackling complex agricultural issues including abiotic stress, Asian Soybean Rust, Citrus Greening, and more, through products that are high-potency, but with a low-volume use rate, allowing for higher margins and lower capex requirements. And by leveraging its large B2B customer capabilities for market access, its go-to-market strategy can deliver fully integrated solutions for growers.

This year, the company will have 17 products on the market that are sold through global commercial partners across five geographies, with 345 total active patent applications. By 2027, plans are to launch 115 products across nine Active Ingredients, positioning Elemental Enzymes to lead the fast-growing, $9 billion biologicals segment of the crop protection market. 

The company’s products are siloed to address three main uses:

Nutrient Use Efficiency –  to increase the effectiveness of fertilizer by preventing the absorption by, and binding to, soils; volatilization; leaching, and surface water runoff.

Stress Mitigation – to mitigate plant stress by reducing water vapor loss, increasing protein stability and content, and enabling quicker plant recovery and sustained growth.

Pest Pressure – to complement fungicide resistance management programs by providing new crop spray timings that prevent disease earlier and more effectively.

“This strategic investment in Elemental Enzymes is directly aligned with our long-term thesis of identifying companies that sustainably increase productivity in the agriculture space,” said Kevin Schwartz, CEO, Paine Schwartz.

“The Company has an impressive suite of products, a robust R&D pipeline, blue-chip customer relationships and a track record of accelerating growth.”

This investment by Paine Schwartz builds upon its longstanding and impressive track record as an investor in the input and distribution segments of Crop Productivity and Sustainability, adding Elemental Enzymes to its current portfolio including AgBiTech, Advanced Agrilytics, AgroFresh, Axiota, and HGS Bioscience.

“We are excited about this investment from Paine Schwartz, which marks the next phase in our effort to build the world’s leading supplier of sustainable agricultural inputs,” said Brian Thompson, CEO and co-founder, Elemental Enzymes. 

“The Paine Schwartz team brings significant expertise and resources that will help us across our business including launching new products, expanding our technical and R&D capabilities, and entering new markets and segments. We look forward to working closely with them to build on our strong foundation and capture new growth opportunities by addressing some of the most complex issues in agriculture head-on.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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