Trendlines highlights investment rationale concerns for animal health start-ups
17:39 PM | February 8, 2021 | Joseph Harvey
Later this month, the Animal Health Innovation Europe 2021 conference will provide a platform for the industry's leading start-ups. The event's innovation showcase is put together by a selection committee full of industry experts. Sarai Kemp of Israel-based Trendlines Group is one member of the committee. She spoke to IHS Markit's head of animal health Joseph Harvey about the firm's current approach to investment.
Trendlines’ interest in the animal health sector falls largely in the aquaculture segment. The firm keeps a keen eye on any nascent opportunities linked to feed, health and equipment.
Sarai Kemp is vice president of business development for Trendlines Agrifood and vice president of deal flow for the Trendlines Agrifood Fund. She told IHS Markit Animal Health robotics with the ability to decrease reliance on manpower in intensive sectors, as well as precision tools to increase yield and decrease cost, are particularly prominent areas under Trendlines' purview.
The company’s strategy and desire to support innovation in the aquaculture industry remained unabated during the turmoil of 2020.
"The pandemic mainly emphasized the areas we focused on, e.g. alternative protein, aquaculture, lack of manpower or robotics," Ms Kemp remarked. "We did look in the past into supply chain management solutions and the pandemic highlighted this sector even more, so we are now actively looking for technologies in this space.
"Luckily, the pandemic didn't hurt our capabilities much. The parent company had its ninth exit during the pandemic, so that gave us a lot of confidence in what we are doing. With our new fund, which had its first close at the end of 2019, we made three investment in 2020. We anticipate our investment activity will continue in 2021."
Ms Kemp said lockdown restrictions have not hindered the company's ability to meet and evaluate potential prospects. Trendlines still tries to meet start-ups face to face in countries where it has a ground presence, such as Israel and Singapore. Ms Kemp also pointed out the firm likes to work alongside with co-investors and trusted partners around the globe. This strategy allows Trendlines to have a third-party connection with some of the start-ups it is interested in.
Trendlines invests across the medical and agricultural industries. Ms Kemp believes the technological advancements occurring in certain parts of the animal health space stand up to the quality of investment opportunities elsewhere.
She stated: “In pharma and feed solutions, I think the technology level in animal health is very high, and is matched nicely with other agri-food sectors.
”I do feel precision tools and specifically software such as artificial intelligence, machine learning and application programming interfaces are more advanced in agri-food’s other sectors than in animal health.
"Another concern we have for animal health is the industry is relatively small from the amount of potential acquirors for a start-up operating in this field, which may limit the M&A future of such a company. In other sectors, we see new players taking an interest in agri-food, such as the large tech companies, or initial public offerings taking place, which expands the horizon of an exit scenario."
Ms Kemp said the main characteristics she looks for in potential investments in the animal health and agri-food sectors are a clear and significant market need, a unique technology/solution that is scalable and initial market traction.
Among Trendlines’ portfolio companies are AquiNovo, Insectta and ViAqua Therapeutics. Ms Kemp will be assessing the start-ups attending the Animal Health Innovation Europe this month. These include:
- Algenex – baculovirus-based technologies for production of recombinant biologics;
- Animab – orally administered antibodies for livestock;
- Armenta – non-antibiotic treatment for cattle diseases using acoustic technology;
- AuxThera – weight loss compound and technology for pets;
- Biotangents – rapid diagnostic tests for infectious diseases;
- Cattle Eye – autonomous livestock monitoring technology;
- Ceres Tag – animal monitoring platform through a smart ear tag;
- Dalan Animal Health – vaccines for honeybees;
- Digitail – veterinary practice digital application;
- DiploVets – online platform for connecting veterinarians with board-certified specialists;
- Emollivet – topical spray for companion animal skin disorders;
- Exubrion Therapeutics – radiotherapies for pets;
- FarmTrace – cloud-based software for farm suppliers and vets;
- Faromatics – smart robotics for farms;
- MabGenesis – companion animal monoclonal antibodies;
- MBF Therapeutics – gene-based immunotherapies for cancer and infectious diseases in pets and livestock;
- QSM Diagnostics – quorum sensing-based testing for bacterial infections;
- Rejuvenate Bio – gene therapies for companion animals;
- Telenostic – technology for identifying and measuring fecal parasites; and
- Vetbiobank – stem cell-based drugs for inflammatory diseases in pets.
To find out more about the upcoming Animal Health Innovation Europe event and register, click here.