TechAccel: Animal health is an under-appreciated investor target
US agricultural investment firm TechAccel has underlined the need for more venture capital investment in animal health – music to the ears of many start-ups in the industry.
The firm's manager of investments, Brett Morris, said: "We believe animal health and nutrition is an under-appreciated sector in terms of venture funding. Most life science investors focus on the human space due to the larger market, while some dedicated agtech venture capital funds are restricted by their limited partners from investing in animal health altogether.
"The industry also requires specific expertise that most generalist investors do not possess. TechAccel believes there are niche opportunities to leverage the application of human health technologies in animals. If the investment structure is clearly defined up-front, investors can obtain synergies from the data collected, and use a shorter, less costly animal health opportunity to generate liquidity."
TechAccel has highlighted a common gripe among young animal health companies – a lack of dedicated investors comfortable with the characteristics of the animal health sector.
The firm also pointed out some of the leading opportunities for venture capital firms to direct some of their investment.
Mr Morris added: "Orally available vaccines, medicated feed and other novelties like bacteriophage cocktails, provide an effective solution to the spread of global disease and the rise of antibiotic-resistant bacteria.
"They also help counter decreases in feed efficiency and animal growth rates as producers reduce the use of sub-therapeutic antibiotics. In addition to animal health benefits, these technologies can have a profound impact on food safety. Integrating health benefits directly into feed or drinking water significantly reduces the cost of goods, improves the ease of manufacturing and decreases the odds of additional dosing."
Animal biotech map
The investment firm has published a map (below) detailing the leading companies in the animal biotechnology space. According to TechAccel's research, agricultural biotech companies have raised around $3.4 billion in total funding since they were founded. Of this, $500 million was in animal biotech and $2.9bn in plant biotech.
Animal Pharm's Funding Database highlights the leading investment deal sin the animal biotech area.
TechAccel's map highlights the adjacent areas that are fast becoming accepted parts of the animal health industry. No longer is the animal health space, solely antibiotics, antiparasitics and vaccines. New spaces are developing rapidly with diagnostics, gene editing and data analytics now on many leading firms' R&D agendas.
This growing toolkit was one of the topics broached as part of the recent Animal Pharm and Kisaco Research webinar on innovation.