Tropic Biosciences banks $28.5m in Temasek-led Series B round


Losing a crop to a pest or disease is a devastating outcome for a farmer. If that farmer is based in a developing country without the promise of subsidies or crop insurance, it’s even direr. And in a pandemic world where food supply chains have tightened and been disrupted, the idea of losing whole fields of crop to disease seems unconscionable as many consumers across the world struggle to get hold of their usual staples.

The humble banana has been at risk for many years now from a virulent strain of Panama disease. Since it was first identified in Asia in 1989, this TR4 strain has devastated production of the widely grown Cavendish banana, a cultivar, which was itself ironically introduced due to its disease-resistant qualities in the wake of an earlier Panama outbreak. It was discovered to have spread to the Americas last year. As bananas play such a crucial role both economically and nutritionally worldwide, a race is on to develop new varieties that can withstand TR4.

One such company is Tropic Biosciences, a UK-based ag biotech startup, that has today closed a $28.5 million Series B round of funding led by Singapore state fund Temasek.

The Norwich-based startup uses plant-breeding and gene-editing technologies to develop high-performing varieties of tropical commodity crops. To date, it has been focusing on bananas and coffee, which it claims have a combined annual market value of over $50 billion and generate employment for more than 500 million people around the world.

Other new investors to come on board for this round included Japan’s Sumitomo Corporation Europe, Genoa Ventures from the US, Agronomics from the UK, and Switzerland’s Skyviews Life Science.

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Tropic’s existing backers Five Seasons Ventures, Pontifax AgTech, Tekfen Ventures, Emerald Technology Ventures, Bits x Bites, and the UK Science & Innovation Seed Fund also participated in the Series B raise.

As well as working on combatting TR4 strain, Tropic has been working on problems such as lengthening the shelf life of bananas, and creating coffee with reduced caffeine and increased solubility – features that could significantly reduce the need for chemical processing of the product.

Novel gene editing and RNAi approach

To do that, the company has built its own computational discovery and genetic engineering platform that combines gene-editing tools like CRISPR with RNAi technology called GEiGS to alter the characteristics of crops. Gene editing has been lauded as an advanced breeding and non-GMO route to making changes to crops without entering into the negative connotations of being classed as in many countries globally. Ironically, the European Union decided that gene-edited crops would be classed in the same way and are therefore banned in the region, although research may continue.

There are a few startups using gene-editing tools like CRISPR, and that’s where Tropic Biosciences made its start in 2016. But the company soon realized the limitations of a pure gene-editing approach to solving certain crop challenges, Gilad Gershon, CEO tells AFN.

“Very early on we realized that while CRISPR is fantastic for certain tasks, like reducing caffeine in coffee or ethylene in banana [the compound that causes it to rot], it was not so effective for challenging traits like crop protection.”

The reason is that CRISPR is mostly used for what’s called “gene knock-outs.” As the name suggests, that’s when certain crop characteristics are eliminated by removing their associated gene; genes can be bred out of a crop over several months and years and this has happened for millennia via natural selection.

“But it’s hard to make a plant resistant to a pest or a fungi through a knock-out,” explains Gershon. “It’s like cutting off a limb to save a patient and isn’t a very robust approach.”

So to address that, around two years ago, Tropic developed GeIGS, which combines CRISPR — or another gene-editing tool — with RNA interference technology. RNA are the messengers sent out by a species’ genes telling its cells to produce certain proteins, for example to produce caffeine in a coffee bean but not its root. Directing those RNA are non-coding genes, which Gershon describes at the “brains behind the coding genes telling them how much to work and regulating the function of others,” such as silencing the caffeine-producing genes in a coffee plant’s roots. Tropic edits those non-coding genes to redirect their existing silencing activity elsewhere, such as towards a virus or pest. “Instead of silencing a plant’s own genes, it can silence virus or fungal genes,” says Gershon.

Gershon argues that the main reason they came upon this novel combination and approach, which he says is protected by IP and various patents, was their location in Norwich, UK, where they could move fast and find plenty of talent among the city’s booming plant genetics scene — it’s home to renowned institutions such as the John Innes Centre and the Sainsbury Laboratory. But also the influence of one of their core advisors Sir David Baulcombe, a world-leading geneticist who discovered RNAi more than 20 years ago.

Gershon adds that this proprietary platform and its unique focus on tropical crops means it doesn’t run into too many competitors, although he references several very good companies operating in the agricultural gene-editing space, such as Benson Hill and Pairwise, [where] the relationship is largely one of mutual support and collaboration as we together lead the industry in an exciting new direction.

Capital in a Covid-19 world

Tropic was fortunate its funding round was not impacted by the Covid-19 pandemic that’s seen valuations of some startups slashed. It’s understood the terms were already set with the lead investor Temasek before the pandemic hit and were left unaltered.

“We are fortunate to have the support of a strong and sophisticated group of investors who recognize the necessity of implementing cutting edge agricultural innovation to address critical food challenges, and the events of the last few months only strengthened the need. With that, the process was not trivial and was greatly supported by the leadership of the Temasek team and our existing Series A venture capital investors who all participated in the round,” said Gershon in a statement.

But has Covid-19 impacted operations?

“The first few weeks were stressful, but the team truly pulled through and gave us the confidence needed to make quick yet thoughtful adjustments to our operations in line with the UK Government’s guidelines. Very early, we split our technology teams into two compartmentalized shifts, and were able to not only maintain but also significantly progress our work during the last few months,” said Gershon. “We did experience some external delays, for example the logistics of shipping plant material to Latin America and Southeast Asia are more challenging today, but we are finding new ways to overcome these and expect that the long-term impact will be minimal.”

The proceeds from the Series B round will go towards further commercialization of the GEiGs platform and scaling it “for use by a growing number of clients across a variety of agricultural segments.”

While Tropic decided to focus on tropical crops as a gap in the gene-editing market, clients can license its technology and use its computational platform on other crops and even livestock.

The capital will also be used to conduct field trials of its novel banana varieties in Latin America and Southeast Asia, and broaden the startup’s focus to begin working on rice cultivars that are less susceptible to climate change while maintaining the crop’s nutritional profile. According to Tropic, more than 3.5 billion people rely on rice to provide at least 20% of their daily calories – so it could well prove to be the company’s most high-impact area of research yet.

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