Access to the market: the big challenge for biologicals start ups

After renewing distribution agreements with Syngenta and raising US$ 6 million in fresh capital, the Chilean firm Botanical Solutions seeks to globalize its quillaia-based fungicide and increase its product supply. Their ambition is to reach US$100 million in annual sales by 2030. 

F. Aldunate M. 

Among the huge number of companies making discoveries in ​​biological inputs for agriculture, there is a common challenge: market access. How to bring your innovative solution to farmers in need. "There are many cases of companies that have failed or have not been able to grow, despite having good products, despite having good technologies," says Gastón Salinas, executive president of the Chilean firm Botanical Solutions. "They fail because they don't have adequate market access".

The Chilean, whose firm has just closed a financing deal of US$ 6 million to expand the production of its fungicide made from extracts of quillaia, an endemic tree from Chile, explains the natural difficulty that firms that make their first discoveries have. “When you are a single-product company it’s difficult to go to the producer, to the farmer, to sell them a solution, because what they want is a complete solution,” he says from the company's office in California. "In this area there are no super products." This, he points out, happens because farmers do not buy a product, they buy a strategy, which implies a combination of different products.

"Despite the fact that you can offer a product with great value, the farmer wants to have access to the entire palette, to all the possible tools to help cope with the season".

Gastón Salinas, CEO of Botanical Solutions

This is what leads new innovators in the area of biologicals to quickly seek distribution agreements with large firms in the field. That is what Salinas and his team did: with the first data from their fungicide trials, they began knocking on large agrochemical companies’ doors, including the Swiss giant Syngenta, which has annual sales of around US$25 billion. They began evaluating the product in 2015, the first contract was signed in 2019 and they have just been renewed for the next five years. "They are our exclusive distributor in Chile, as of last year in Peru, we are expecting as of this year in Mexico and we are in conversation with them in other regions," says Salinas, who also states that he is in dialogue with other large agrochemical firms. “We have developed a very good and close relationship with Syngenta, but we are also building relationships with other companies that have different interests and motivations. In this industry, even from country to country, the products have different distributors, but we believe that in the end these decisions will be the consequence of doing things the right way. And surely if we work with someone who is not Syngenta, it will be because that someone is better and different in the areas that we are interested in promoting in order to have different opportunities.”

The US$ 100 Million bet

With distribution agreements already signed, Botanical Solutions is undertaking two major initiatives. On the one hand, they are seeking to globalize their initial product. Known as BotriStop, the fungicide that is made from an extract of quillay grown in laboratories is undergoing major surgery, including changing its name to Quillibrium, as a result of mixing the word Quillay or Quillai in English with Balance. “When we talked about BotriStop, everyone understood that it was a product for botrytis, but the product is much more than that, it has a broader use for other pathogenic fungi that also affect multiple crops. The name Botristop was too small for us,” says Salinas, who adds that in some markets the brand name was already being used. “This gave us the opportunity to build a global brand. Quillibrium not only includes the wide spectrum use of the product, but also makes our way of working internally in the laboratory, without touching any wild quillay, without leaving any environmental footprint, more tangible”.

In addition to globalizing its fungicide, the firm aims to evolve from being a single-product company to being a company with a portfolio of products supported by its technology in advanced active ingredients applied to new plants. "Today we are working with palqui, boldo, other endemic plants, and other national plants," says Salinas.

"Our goal is to launch four new products between 2023 and 2026, aiming at a business plan that will allow us to reach US$100 million in annual sales within ten years."

This is an ambitious goal considering that the firm anticipates sales of "just over a million dollars" in 2022.

Most of the US$ 6 million will be used for this purpose, financed by the Otter Capital fund, one of the early investors of AgraQuest, the legendary biological company that was bought out by Bayer for about US$ 500 million in 2013.

Focus on biocontrol

This fresh money, after previous investments of 1.5 million that the company received in different stages, gives the firm's executives confidence. Nevertheless, they continue to see their fungicide, now under the brand name Quillibrium, as the company’s main product. This quillaia-based fungicide is expected to account for about a third of the company's sales, in a growth driven by the new properties and new uses that are being associated with the product.

In this diversified portfolio, the focus will remain on biocontrol. “We are going to fill vertical markets with other uses, such as fungicides, bactericides, nematicides, either with quillaia or with the other plants that we have in the pipeline", says Salinas. “The biocontrol area is where you can really capture the value of having a strong, scientific, proprietary, intellectual base, with regulatory processes that are perhaps much more demanding, but in the end are entry barriers to get into those markets. And we think that we have what it takes to participate there, unlike the biostimulant market where you can sell pretty much anything."

“The biocontrol area is where you can really capture the value of having a strong, scientific, proprietary, intellectual base, with regulatory processes that are perhaps much more demanding, but in the end are entry barriers to get into those markets"

In addition, there is the option of entering the pharmaceutical sector: thanks to QA21, a compound that is obtained from quillaia and that can be used in vaccine formulas for COVID-19. "This year we are going to produce the first grams of the pharmaceutical compound," says Salinas. “But this is not a one-man race. We are allying with key players in the industry to make it a reality”.

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