A consortium of agriculture industry experts has launched a new “Ag Playbook” designed to provide a foundational framework for the development of agricultural technologies. This initiative, spearheaded by Leaps by Bayer, brings together insights from a diverse group of companies including Bayer, Oerth Bio, Enko Chem, Citi, and Cleveland Avenue Ventures. The playbook aims to establish a standardized nomenclature and a common understanding among startups, investors, and agribusiness incumbents about the complexities of bringing agtech products to market.
Paimun Amini, senior director of venture investments at Leaps by Bayer and the editor of the playbook, emphasized its collaborative nature. “It’s not just the Leaps by Bayer AG playbook,” he told AgFunderNews. “This is an industry playbook with the goal of raising all tides.” The involvement of various industry players aims to create a baseline that the next generation of entrepreneurs can build upon, fostering innovation and collaboration across the sector.
One of the key challenges identified in the playbook is the lack of a shared understanding of what it takes to bring agricultural technologies to market. As Amini noted, many startups face a significant hurdle once their product reaches the commercial launch phase. Scaling a solution to reach millions of acres can be prohibitively expensive without partnerships with established agricultural companies and retailers. This phenomenon has been termed the “Reverse Field of Dreams” scenario, highlighting the misconception that simply developing a product guarantees market acceptance.
The playbook addresses this issue by providing a clearer roadmap for startups, outlining the milestones they should expect, how to budget effectively, and what they need to demonstrate to investors. Amini pointed out that the timelines in agriculture are considerably longer than those in software, making it crucial for investors to understand these dynamics to make informed decisions.
The initial release of the Ag Playbook focuses on “crop protection small molecule products.” Over the last 15 years, the costs associated with developing these products have surged by 99%, and the time required to bring them to market has extended from 8.3 years to 12 years. This trend underscores the increasing complexity of navigating safety and regulatory approval processes, extensive testing, and product registrations. The playbook aims to provide transparency regarding the requirements for developing these products, which could serve as a model for future chapters addressing other agricultural innovations.
Amini highlighted several “consistent truths” in the crop protection space that the playbook outlines: it generally takes between 4 to 13 years to bring a product to market, the capital investment required ranges from $50 million to $400 million, and rigorous testing is essential to ensure compatibility with existing agricultural practices. Moreover, building relationships with partners and farmers is critical for establishing market trust and credibility.
The insights drawn from the pharmaceutical industry serve as a valuable reference point for agtech development. Like crop protection products, pharmaceuticals face significant time and financial hurdles before reaching the market. However, Amini noted that the pharmaceutical sector benefits from a larger pool of experienced professionals who understand the product lifecycle, which is less prevalent in agtech. This disparity can lead to fewer successful exits for agtech startups, particularly in the later stages of product development.
The Ag Playbook represents a significant step toward creating a more cohesive and informed agricultural technology ecosystem. By establishing a common language and framework, it aims to empower startups and investors alike, ultimately fostering innovation and collaboration that can drive the industry forward. Future editions of the playbook are expected to expand on other areas of agricultural technology, including crop improvement, biological products, digital agriculture, and animal agriculture, further enhancing the resources available to stakeholders in the sector.