Since 2012, agriculture-related gene editing startups have collectively raised over $2.7 billion, according to AgFunder data. This sector, although recently impacted by a downturn in venture capital, is showing promising signs of recovery in 2024. The first half of this year saw these startups raise just over $161 million across six deals, a significant leap from the same period in 2023, which only garnered around $46 million. Notably, even when removing a single $40 million deal, the remaining sum still reflects a 206% year-over-year increase.
This resurgence in funding activity is accompanied by a rise in deal count. The first half of 2024 matched the total number of deals seen throughout 2023, indicating a renewed investor interest. Furthermore, H1 2024’s funding figures surpass those of H1 2022 by 140%, although it remains to be seen if the full year will eclipse the $241 million raised in 2022. Despite these positive trends, the current investment levels are still far below the pre-Covid highs, with only 2017’s $58 million being lower than the present figures, a dip that followed a substantial $374 million spike in 2016.
Historically, the distribution of deals between the first and second halves of the year has been relatively balanced. For instance, in 2022, six out of twelve deals occurred in the first half, while 2021 saw six out of fourteen, and 2020 had seven out of fifteen. This trend suggests that the sharp intra-year decline observed in 2023 is unlikely to repeat in 2024.
The industry has seen remarkable advancements in precision and cost reductions, pushing the boundaries of research. Companies like Ohalo Genetics and Tropic are at the forefront with their innovative technologies. Ohalo Genetics’ “boosted breeding” technology effectively switches off the gene-splitting mechanism in each parent, while Tropic’s gene editing-induced gene silencing (GEiGS) employs RNA interference to combat various crop diseases and pathogens.
Gene-editing technology holds the potential to revolutionize agriculture by developing new crop varieties that outperform existing ones. These crops can be engineered to resist pests and drought or adapt to previously inhospitable environments, such as rice that can grow in salty waters. Additionally, gene editing can enhance crop yield and quality. Importantly, gene editing offers a regulatory advantage, as it doesn’t introduce foreign genetic material into a crop’s DNA, avoiding the “genetically modified” classification by the USDA.
However, the European Union still regulates gene-edited products as genetically modified, creating a less favorable environment for these innovations. This regulatory landscape likely contributes to the geographical distribution of funding, with the Americas leading the industry, capturing 81.9% of the funding ($2.23 billion), followed by Asia with 13% ($354.31 million), and Europe with only 5% ($136.69 million).
Despite these regulatory hurdles, European institutions are increasingly recognizing the importance of gene editing technology. In July, the Ancient Environmental Genomics Initiative for Sustainability (AEGIS) project received $85 million, with $72 million from the Danish nonprofit Novo Nordisk Foundation and the remainder from the UK charity Wellcome Trust. This project aims to map the entire planetary genome using ancient DNA fragments, potentially providing a foundation for developing new crop varieties based on evolutionary data.
Examining the deal activity in 2024, the largest rounds were secured by American companies. Inari raised $103 million in January, Ohalo Genetics secured $40 million in a Series A deal, and BioConsortia raised $15 million in April. Israeli startup GeneNeer also raised $1 million in a seed deal. In contrast, 2023’s top deals included Elo Life Systems’ $24.5 million and Inscripta’s $4.4 million, followed by seed deals for Brazilian Symbiomics ($2.15 million) and Chinese Sanmi Biotechnology ($1.4 million).
Overall, the 206% year-over-year growth in investment for H1 2024 indicates a potential recovery and new momentum for the agriculture gene editing sector, hinting at a promising future for this transformative technology.