Reducing pesticides by communicating with nature
Pesticide reduction and climate change mitigation are values at the heart of PheroSyn. It’s a company on a mission to facilitate change in food production and is doing this by enabling integrated pest control strategies through pheromone technologies, enabling farmers to better target insect pests or reduce their impact on crops.
PheroSyn was spun-out from agricultural research institution Rothamsted Research in 2020 as a specialist supplier of synthetic insect pheromones, explains Dr Mary Ellis, CEO of PheroSyn.
“Around 80% of pheromones on the market are for moths and these are very simple in structure. PheroSyn is making nature-identical pheromones for other types of insects which are structurally much more complex.
“The genesis of the business was initiated after its founding scientists were approached by companies with an interest in pheromone chemistry. This led to the realisation that they could use their chemistry knowledge to develop complex synthetic pheromones that other companies couldn’t make.”
Pheromones can be used in a number of different ways – the most common being mating disruption where plumes of pheromone are released into crops, confusing the males and preventing them from finding a mate. But they are also used to monitor pest numbers in crops so that farmers can time control measures to ensure they’re only applied once a threshold for economic damage has been reached.
“We use pheromones to communicate with nature. One of the most critical factors in reducing the use of pesticides is to time the application correctly. We also encourage farmers to intervene more with biological controls than synthetic pesticides,” says Dr Ellis.
Farmers already have an obligation to consider pesticide application as a last resort according to integrated pest management (IPM) principles and using pheromones to guide application decisions can support farmers to minimise insecticide use. With government support for farmers not to use insecticides now available under the Sustainable Farming Incentive (SFI), other means of managing pests are much needed.
PheroSyn’s recent trials in peas have shown that simply by ‘communicating’ with nature in this way, farmers can bring their yield losses down from 30% to 3%, gaining them a much better return while spending less on pesticides and helping protect the environment.
Sustainability isn’t just an external ambition, it’s a core value of the company. “Pheromones have a light carbon footprint but we strive to produce them in an ever more sustainable manner by adopting the 12 Principles of Green Chemistry.”
Aligning these core values with external funders is a crucial part of a company’s evolution and making a success of this is no easy task as evidenced by the 60% failure rate of UK startup tech companies in the first four years following incorporation.
Dr Ellis highlights the commitment that’s required to become more investable. “You really need a goal other than making millions to be successful in a startup; you have to have a desire to see change in the world. And I think that’s what we managed to harness really well.
“We were quite reliant on bootstrapping and grants early on and we put in a lot of sweat, equity and hard work that we weren’t compensated for at the time. Investing in the right people has enabled us to build on those efforts and we’ve created a culture where everybody’s working towards the same goals.”
In its first year, PheroSyn benefited from funding and mentorship under the SHAKE Climate Change accelerator programme which Dr Ellis believes was invaluable and helped form relationships which have become the bedrock of the company.
Becoming investable
Dr Ellis has also worked as a SHAKE mentor for other companies within its portfolio and she believes the business skillset that the accelerator brings to startups, particularly very early-stage startups, set it apart.
“I’ve been involved with a variety of different accelerator programmes and SHAKE stands head and shoulders above the rest because of the consistent mentoring it provides over a long period, usually a year and the fact that this occurs at such an embryonic stage of a company’s development. It’s the perfect amount of time and the support is tailored to the startup’s needs,” she says.
With many agri-tech solutions emerging from academic institutions, the mentorship of SHAKE provides access and support for founders through the maze of commercialisation.
“Under SHAKE, a company gets time with mentors to prepare their pitch. It’s usually the first time that founders have been in that environment and being able to hone their pitch with people they’ve come to know is really useful. By the time the company presents to the investment panel, they have a good story and have really thought through how they will implement their strategy.”
Recognising the qualities that attract investors has been fundamental in PheroSyn’s growth over the past four years and Dr Ellis has been able to use her experience working in North America to good effect. “North America is further ahead regarding how things should be structured, particularly the company’s IP and ownership. Investors are looking for a company that post-investment will provide sufficient rewards for the right people in place, including the founders and themselves.”
Attention to the structure of the company has made PheroSyn and its capitalisation table, in particular, much more investable,” she believes.
Funding sources
Government funding from Innovate UK has been crucial to many startups and Dr Ellis describes the grants available as ‘extremely useful’. The downside is that they can be very rigid and although changing direction under them is possible, it’s not necessarily a simple process. Other sources of funding as a business develops can provide more flexibility as a startup pivots to find its strong commercial niche.
“PheroSyn has benefited from angel investment from Angel Academy, which invests in female founder companies and brought a whole different viewpoint to the table. We also had investment from Sustainable Ventures, who are sustainability focused and really support that angle of our business. We are also part of an investment group that invests in agri-tech businesses and that has given us good technology validation, and we’ve just brought onboard some Canadian venture capital.”
However, Dr Ellis still feels there is a gap in funding opportunities for UK businesses, particularly during scale-up.
When seeking private investment, carrying out due diligence on any potential candidates is crucial, she stresses. “It’s a mistake lots of startups make because they’re desperate for the money but it’s wise to speak to companies they’ve already invested in to make sure you understand the type of investors you’re getting involved with.”
Startup hurdles
Startup companies face a number of hurdles other than funding. For PheroSyn, one of these is protecting its intellectual property (IP). “We use a hybrid approach, patenting some technologies – although a patent is essentially a disclosure because it describes how you do things, so the wording is very important – and we’re aggressively protecting our IP within the company.
“We also source IP from Rothamsted staff. We have a great relationship with them – some of our founders remain as Rothamsted scientists and we’re able to use their expertise to help bolster our IP. One of the SHAKE mentors was also hugely helpful in building the company’s subsequent relationship with Rothamsted by building trust that we were trying to do the right things for the right reasons.”
The approach taken to startups in North America is something Dr Ellis believes the UK government could learn from. “Encouraging universities to take note of what organisations like Stanford University [in California] do in terms of ownership of startups would be a phenomenal step forward. In the US, IP ownership is with the institute and at Stanford, the university can have no more than a 10% equity share in a company. That leaves a good chunk for the founders and entrepreneurs.”
That leads Dr Ellis back to her earlier observation that it’s the people within the company that are its greatest asset. “A startup is going to go through the normal rounds of financing, and it’s the people putting the hours in during those crucial early days that the company needs to hang on to by rewarding them. Investors aren’t there to run the company.”
She points out that young companies can sometimes be held back by the institutions that helped found them. “Universities can be too risk averse and perhaps overvalue their impact on the company. A startup has to pivot so many times and often a different technology is commercialised than the one the university initially envisaged.”
Regulating fairly
Dr Ellis would like to see the UK government take a serious look at the regulations governing pheromones. Currently, pheromones are regulated under the EU legacy regulations the country adopted on exiting its membership of the EU. For monitoring purposes, pheromones come under GB-Biocidal Product Regulations (BPR) and those used for mating disruption are viewed as plant protection products.
“In GB and EU, the timeframe is around five years to get products to market, whereas in the US it’s much shorter, taking just 2-3 years to gain regulatory approval,” she explains.
The timeframe to commercialise a product is especially important for startups and the current regulatory framework imposes significant costs at a crucial time in a company’s evolution. The regulatory environment in the UK and EU has encouraged PheroSyn to broaden its horizons and Canada has now become a focus area because of the strategic fit and quicker route to market.
“We have the opportunity now to set our own path in the UK and produce regulations that make a lot more sense. Pheromones are used in vastly smaller quantities than pesticides so they shouldn’t be regulated in the same way. Instead, there should be a fast track for pheromones and the regulatory bar should be lowered because they are much more specific and environmentally benign than pesticides.”
With the significant IP PheroSyn has generated, the company is on a mission to bring integrated pest management solutions for insect pests in a broad range of crops, reducing pesticide usage and the carbon footprint of farmers in the process. The company’s core values may be a good fit for the world’s need to reduce carbon emissions and address climate change, but PheroSyn’s successful genesis has been down to its people, believes Dr Ellis.
“We’ve invested properly in innovation, but we’ve also invested in the right people and in the right partnerships,” she concludes.