Indigo Ag is World’s Biggest AgTech Startup

July 26. 2018. 6 mins read

The world’s biggest agtech startup appears poised to grow even bigger this year with a multi-billion-dollar valuation just four years after launching out of Boston. (When we say “biggest”, we are using valuation to determine “biggest”. Valuation refers to what investors are willing to pay for shares when they invest, and consequently, these valuations will increase, decrease or stay the same, based on the latest funding round.)

PitchBook Data, a firm that provides research and data on private markets, recently reported that Indigo Ag is looking to raise up to $300 million, which would give it a valuation of $3.5 billion. Founded in 2014, Indigo has already reaped $359 million over five rounds (though the last was technically a continuation of a Series D that reached $203 million last year), according to Crunchbase. Pitchbook actually pegs equity funding slightly higher at $367 million. Either way, Indigo currently carries a $1.4 billion valuation, per both PitchBook and fellow data firm CB Insights.

Credit: PitchBook

Timing is everything. About a week after we published our list of top-funded agtech startups last September, Indigo doubled its war chest to surpass vertical farming startup Plenty Inc. as the world’s most well-funded agtech startup. Plenty has raised a total of $226 million, including a $200 million round in 2017 from free-spending SoftBank. In fact, last year was a good one for agtech, a broadly defined technology sector that includes everything from agricultural robots to Internet of Things aquaculture. Pitchbook says a record $1.8 billion was invested in agtech companies last year over 221 deals.

Update 06/22/2020: Indigo Ag has raised $300 million in Series F funding. This brings the company’s total funding to $1.1 billion to date.

Microbes for Crops

Click for company websiteRiding that wave of investment is Indigo, which produces crop seeds—but not just any seeds. Their seeds are coated with microbes, tiny organisms that live in a symbiotic relationship with plants and soil, helping them stay healthy in less-than-ideal conditions such as drought. Currently, the company focuses on cotton, wheat, rice, corn, and soybeans. We first profiled Indigo in our list of agtech startups keeping us fed.

Indigo doesn’t genetically modify the organisms but goes through a complex process to find the best bugs for the job. It uses sophisticated genomic sequencing and other methods to build an enormous database of genomic information for thousands of microbes. The company then applies algorithms and machine learning to predict which microbes are most beneficial to the plant’s health. The best and brightest bugs are then used in the company’s proprietary seed coatings.

Win for Wheat

Does it actually work? Just this month Indigo released the latest yield data for its second commercial season of growing Indigo Wheat (that’s trademarked, by the way). Across 24 wheat fields in three states (Texas, Oklahoma, and Kansas), Indigo Wheat yielded 13 percent more than its conventional cousin. The numbers are even better when the researchers accounted for high-stress, low-yield conditions like droughts or intense heat. The average yield, in that case, was 19 percent better.

Credit: Indigo Ag

In one of those “meet the farmer” anecdotes, a grower in Oklahoma said Indigo Wheat yielded 33 bushels per acre (we think bushel is roughly equivalent to barrels of beer, but don’t quote us on that), while everything else on the property produced 15 to 20 bushels per acre. And that was over a season that experienced less than two inches of rain over six months.

Starting at the Top

Indigo is led by a man who has had his ups and downs on the startup scene. CEO David Perry was also the chief executive and co-founder of Anacor Pharmaceuticals, a biopharmaceutical company developing small-molecule therapeutics to treat infectious and inflammatory diseases. Pfizer bought the company for $5.2 billion in 2016. Another venture, a company originally called Chemdex that operated a B2B marketplace for the life sciences industry, had what you might call mixed results. It went public in 1999, just before the Dot-Com Bubble burst. The share price soared 60 percent on the first day of trading despite the fact that Chemdex had only made $29,000 in sales in 1998.

A name change to the cool, techy sounding “Ventro Corporation” saw the company’s stock take another 30 percent jump in one day in February 2000. The stock had hit a high of $243 by then, with a market cap of $11 billion. By June 2011, the stock was trading for 39 cents a share. It would be a slow demise for the company formerly known as Chemdex, as it continued to change names and strategies, before finally filing for bankruptcy in 2011.

In 2015, Perry co-founded Better Therapeutics, which basically seems to be a health coaching app that claims to use artificial intelligence and scientific research to help people live healthier lives without turning to prescription drugs, despite the fact that there’s good money to be made from the opioid crisis. The company has raised $8.5 million, with Perry appearing to bankroll the round himself, based on Crunchbase data. Meanwhile, he sits on the board of another health-related startup called Evelo Biosciences, which hopes to turn naturally occurring gut microbes into a new type of medicine, raising $132.5 million in the process.

More Than a Seed Company

Indigo wants to be more than a seed company, as it not only supplies seed to farmers but then buys back the product at a premium price. For example, it plans to pay those growers in Texas, Oklahoma, and Kansas up to a 20 cent per bushel premium on Indigo Wheat. The idea seems to be that Indigo is trying to build a niche market for products that it can claim are produced more sustainably (in other words, without pesticides, thanks to its miracle microbes) and are qualitatively superior, such as higher protein content in wheat.

A comparison of Indigo Cotton versus a conventional cotton crop. Credit: Indigo Ag

Earlier this year, it launched an on-farm storage program for U.S. farmers, who work with the company to store and monitor Indigo Wheat until Indigo picks up the grain and transports it directly to buyers. While some growers have existing on-farm storage systems, Indigo offers to finance grain bagging systems at no upfront cost for those without. The company claims this approach brings direct benefits to farmers, including simplified logistics at harvest, savings on transportation, and payment for any improvement in basis between harvest and grain collection.

Meeting in the Middle

Last month, the company expanded its Indigo Research Partners, a platform that involves more than 50 of the country’s largest growers to evaluate agricultural technologies. Using what it claims are more than a trillion data points gathered daily from sensors, drones, weather stations, and other technologies, the platform will “optimize on-farm decision-making, accelerate the adoption of new technologies, and improve grower profitability.” That sounds an awful lot like what farm management startups like Farmers Edge Laboratories or Farmers Business Network, among some of the better-funded agtech startups, are doing.

AgFunder News reported the company is building what it calls the “world’s largest agricultural lab” by testing third-party digital and biological ag startup technologies on Indigo Research Partners’ 25,000 dedicated acres. The goal, as one company official told AgFunder, is that if a product it tests brings value, Indigo will incorporate it into one of its systems on the commercial side. For example, a farmer who grows Indigo Wheat may also be encouraged to use sensor-based technology that will turn an irrigator on and off to deliver just the right amount of water.


In effect, Indigo is looking to become a digital distributor and marketplace for various agricultural technologies from startups with pockets not as deep as Indigo, according to AgFunder News. That’s particularly interesting given the spectacular failure of Perry’s Dot-Com business, Chemdex, which one analyst said back in 2001 collapsed because it “attempted to get between the suppliers and buyers of mainstream products. Suppliers don’t really want anyone between them and their customers.” Or maybe Perry was just ahead of his time.

Either way, Indigo Ag is building up its coffers, as it invests in its partnerships (and apparently grain silos) and likely eyes some acquisitions in the future to build its digital platforms. That future, Perry has been quoted as saying, will include an eventual IPO.


Leave a Reply

Your email address will not be published.