New funding values Semios in excess of $1-billion, chief executive officer Michael Gilbert said.Supplied
SemiosBio Technologies Inc. has raised $100-million to advance its plans to buy up other agriculture technology players globally.
The Vancouver company, which has announced three acquisitions since June – including last month’s nine-figure purchase of Australia’s Agworld Pty Ltd. – said the equity financing was led by its main outside shareholder, Morningside Group. The Boston private equity firm, controlled by billionaire brothers Gerald and Ronnie Chan, heirs to a Hong Kong property fortune, led Semios’s $102-million equity financing in early 2020. The new funding values Semios in excess of $1-billion, chief executive officer Michael Gilbert said in an interview.
It’s the 34th $100-million-plus venture capital funding of a Canadian company this year, obliterating the full-year record of 12 set in 2019, according to research firm Refinitiv.
Semios, founded in 2010, is a specialist in “precision farming” technology that built its business in the past decade by combining artificial intelligence; wireless sensor technology; and a chemistry trick to prevent the spread of insects that damage high-value crops such as almonds, lemons, grapes, apples and pistachios. It is one of several Canadian companies, including Farmers Edge Inc. , and Telus Corp. , looking to digitize the global agriculture business, although Semios is believed to be the world’s largest independent player, up against chemical giants Monsanto Co. and DuPont de Nemours Inc., which have in-house tech units.
Semios’s signature offering is bug-control technology that doesn’t use insecticides to kill pests, but rather non-toxic synthesized chemicals that fool them into not reproducing. The Semios spray mimics pheromones, natural chemical signals that the insects send out to one another. Semios’s simulated pheromones are sprayed at intervals from canisters mounted in orchards and vineyards to confuse males, which fly into a fog of phony pheromones looking for females, and reach the end of their lifespan before propagating. Semios sells its systems on a subscription basis, meaning farmers don’t have to lay out big sums for technology they’ll have to replace at their own cost.
Mr. Gilbert said clients told him they were tired of dealing with multiple startups that help collect data and guide decisions on farm conditions. They encouraged him to buy other emerging players so they could deal with fewer suppliers.
He said Morningside’s funding last year was intended to bankroll acquisitions – and that the investor told him it would continue to finance Semios if he could prove out the strategy. “I knew I had to get a big meaningful one in order to trigger some follow-on capital to keep on growing,” Mr. Gilbert said.
The purchase of Agworld, a provider of enterprise resource planning software to farmers that generates about $10-million in annual revenue, “was enough to satisfy the Morningside team that we could raise more capital and keep growing and do more acquisitions,” he said. Semios announced two smaller deals in June, buying Altrac, a San Francisco-based maker of control systems that turn farm wind machines on and off, and Centricity of Wenatchee, Wash., which helps farmers manage data around compliance and traceability for crop inputs.
Morningside declined an interview request. The firm’s investment manager, Mick Sawka, said in a statement: “Morningside invests in companies committed to tackling pressing global challenges head on” including ensuring the sustainability of food production amid climate change. “Semios is a leader in helping farmers respond to this challenge and we’re proud to stand behind them.”
Mr. Gilbert said Semios is in talks with other potential targets; he expects his company to make another deal within six months. He said Semios is looking for acquisitions that would take it to new markets or broaden the scope of products and services sold to farmers. The CEO expects his 250-person company will roughly double annual revenues to US$100-million within two years, at which point it may go public.
“Semios is on fire,” said Leah Lawrence, CEO of federal agency Sustainable Development Technology Canada, which has provided $12-million in funding to Semios. “We’ve had 100 years of technology advancement and leadership in the agriculture space. Michael is capitalizing on that by taking advanced science and analytics and applying them to what has been Canada’s traditional strength in agricultural production for export.”
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