Agribusiness-focused private equity firm, Metalmark Capital, has made an unspecified investment in Valagro, a global leader in the production and commercialization of biostimulants, micronutrients, foliar fertilizers and fertigators used for agricultural production, industry applications, and home garden use. This investment in Valagro is the first institutional capital commitment in the company since its founding.
Founded in Italy in 1980, Valagro has grown to include 13 global subsidiaries and a portfolio of more than 20 branded product lines. With growing demand from consumers for the adoption of naturally-derived and environmentally friendly agricultural production practices, Valagro specializes in supplying naturally derived biostimulants and nutrients that stimulate the physiological processes of crops resulting in raised productivity – an approach known as Integrated Crop Management.
“Valagro has developed a strong international footprint and a leading position in the natural and sustainable crop input markets,” said Leigh Abramson, Partner, Metalmark Capital.
The biofertilizer market is expected to grow at a compounded annual growth rate (CAGR) of 14.08 percent reaching an estimated market value of $2.3 billion by 2020, while the agricultural biologicals testing market is expected to grow at a rate of 10.4 percent, reaching a value of $1.1 billion by 2021, according to Markets and Markets. In addition, the biostiumlants market is projected to grow at a CAGR of 10.4 percent, reaching a value of $2.9 billion by 2021, with the area of application expected to grow at a CAGR of 11.7 percent, reaching 24.9 million hectares by 2021.
A shrinking base of arable farmland, tight supply of traditional agricultural inputs over the past five years, and a higher level of willingness by farmers to adopt new systems that can result in higher yields while being environmentally safe have increasingly brought the biologicals category onto the radar of investors resulting in more significant funding rounds.
In May of this year, Chicago-based Seed 2 Growth Ventures (S2G) led a $10 million round for agricultural bio-chemical developer, Terramera. Other investors participating in the round include ACA Investments, Bold Capital Partners, Renewal Funds, and Maumee Ventures. Then, in August of this year, Biological insecticide company, Vestaron announced the completion of an oversubscribed $18 million Series D.
“The consumer is changing the US food system,” S2G managing partner Sanjeev Krishnan told GAI News, commenting that Millennials, defined as 18 to 34 year olds, are the main group driving the shift, with their focus on healthy, fresh food. However, Krishnan goes on to add that, “acreage needs to catch up to the consumer while being profitable for the farmer.”
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Lynda Kiernan