By now many of you may have heard the news that in November 2024 Ferris Genomics was acquired by Solis Agrosciences, thereby diversifying Solis’ customer offerings and strengthening their position as a leader of agricultural services. 39 North sat down with Solis CEO Charlie Bolten to chat about the ‘buy versus build’ mentality and hear his thoughts around agtech trends.

Buy Versus Build

Founded in 2022, Solis Agrosciences has quickly established itself as a reliable and innovative partner in the agtech sector. Specializing in gene-editing, plant transformation, and phenotyping services, the company serves a diverse clientele that ranges from ambitious startups to multinational corporations. Following the successful licensing of the Pairwise FulcrumTM platform earlier this year, the addition of Ferris Genomics – a company known for its expertise in whole-genome sequencing and genomics-driven breeding programs – represents a thoughtful and strategic expansion of Solis’ offerings. According to Bolten, the move brings “immediate benefits, with Ferris’ existing services projected to contribute significantly to Solis’ revenue.”

“Growth by M&A has always been part of the Solis business plan.”

– Charlie Bolten, CEO of Solis Agrosciences. 

The timing of this acquisition highlights the growing importance of genomic services in crop and livestock agriculture. Advances in sequencing technology and genomic modeling have made these tools more accessible, allowing companies to integrate genomic data into their breeding programs and accelerate innovation. “Maturity of the technology, price, and impact have reached the point where it makes sense to customers across a range of species and scale,” Bolten explained, reflecting the exciting momentum behind this shift. 

By incorporating Ferris’ sequencing capabilities, Solis can now guide customers through the entire breeding process, from deep sequencing of germplasm collections to identifying targets for genome editing. According to Bolten, this end-to-end approach helps companies improve agronomic traits, such as yield and disease resistance, as well as consumer-facing traits like enhanced flavor and nutrition. “A ‘buy versus build’ strategy makes sense since Solis can provide a complete solution that the customer can turn on and off, or up and down, without the complexity of scaling staff or internal footprint.”

Service companies are becoming increasingly prominent in the agtech sector, and are delivering significant value to customers through: 

Access to advanced expertise and technology. Service companies enable access to specialized tools, technologies, and expertise that may be prohibitively expensive or time-intensive for their customers to develop internally, or only needed for a short time in the product development cycle. This additional competency can lead to acquisitions. 

Cost and resource efficiency. By outsourcing complex processes, startups can remain lean, allocate capital more efficiently, and focus on building their core innovations while enabling other projects to be explored. Similarly, multinational corporations use service companies to reduce internal costs while exploring new markets and technologies. 

Scalability and flexibility. Service companies enable customers to scale operations up or down based on immediate needs. As Bolten notes, this gives companies flexibility without committing large amounts of capital to equipment and staff. 

Accelerated time to market. Leveraging the capabilities of service providers allows both startups and corporations to shorten development timelines and bring innovations to market more quickly. 

Service Companies and Their Role in the Changing Face of Agtech Investing:

Over the past decade, venture capital (VC) in agtech has evolved, shaped by the promise of transformative technologies and the realities of scaling innovations in agriculture. The early 2010s saw a surge of VC dollars, predominantly driven by innovations in precision agriculture, biologics, and alternative proteins. This decade was marked with high valuations and ambitious growth expectations, both in agtech and in the tech sector overall. While some investment returns met or exceeded expectations, others have had mixed results. Learnings about agtech investing from this period include: a better understanding/recognition of long product development cycles, often contingent upon annual agricultural seasons; a deeper appreciation for the ever-present, capital-intensive nature of biotechnology innovations. 

In response, venture capitalists have recalibrated expectations and valuations in agtech looking to stretch risk capital further. One way is to have companies adopt a virtual or semi-virtual business model, which allows for companies to reduce physical operating costs. Another is partnering with service providers like Solis Agrosciences and Ferris Genomics to enable innovation. By offering fee-for-service models, service companies help customers achieve their goals while maintaining capital efficiencies, particularly earlier in the product development cycle. Here, customers can explore R&D efforts for projects that may not otherwise be pursued in the short term due to capacity constraints.   

Oliver Ratcliffe, Co-Founder & CEO of genXtraits, a Solis customer and San Francisco Bay Area startup developing new traits, said “Being able to access Solis’ state of the art development capabilities is a game changer for a new biotech firm like genXtraits. It will allow us to rapidly accelerate our programs without significant capital expenditure; instead, we can focus our financial resources and expertise into the development of highly valuable new varieties and IP for commercialization.”

“Complementing organic expansion, the right M&A opportunity can accelerate growth.”  

Charlie Bolten, CEO Solis Agrosciences.

Bolten, who was the President and Senior Managing Director of BioGenerator Ventures prior to his position as Solis Agrosciences, feels that operating models and their impact on capital efficiency deserve greater attention. Drawing on insights from his venture capital mentor, John McKern of RiverVest Venture Partners, Bolten advocates for a hybrid operating model that strives for the strategic use of internal resources balanced with some outsourcing to achieve key value inflection points. 

The past decade has also seen a recalibration of exit expectations. While initial strategy was often aimed at billion-dollar acquisitions or IPOs, the focus has shifted to smaller valuations. Service companies can play a role by offering customers the tools and expertise needed to de-risk their technology with less risk capital. Moreover, through scaling pilot projects and proving out product efficacy, service providers can help customers hit critical development milestones more quickly. This acceleration can reduce the time to exit and help customers become more attractive to potential acquirers.  

As for the growth of service companies themselves, Bolten notes that, “service businesses typically grow by M&A, often fueled by private equity investment.” While acquisitions by early-stage agtech companies are not as common as such acquisitions in the broader tech sector, Bolten views them as a critical component of growth for service-oriented businesses. “Big companies like Eurofins are usually very active in growing by M&A,” says Bolten, adding, “Solis is following an established pathway, but there has just been less historical activity in agtech.” 

Proximity:

Both Solis and Ferris are not only both located in St. Louis, but are housed at the Helix Center Biotech Incubator within the 39 North AgTech Innovation District. Proximity can significantly streamline the M&A process, particularly in sectors like agtech where collaboration, infrastructure sharing, and operational synergies are critical. Face-to-face interactions can speed up due diligence and post-acquisition integration enabling the easier transition of teams, technology/equipment, and a better alignment of culture. 

As a global agtech innovation hub, 39 North AgTech Innovation District can, and does, play a vital role in fostering local M&A opportunities. Proximity within an innovation district creates frequent, organic touchpoints—whether through shared facilities, networking events, or collaborative projects—which can reveal synergies that might not otherwise be apparent. As 39 North continues to grow, we hope to share stories about more companies located within the district or throughout our region thriving, collaborating, and coming together to create value. 

“Given that Ferris was a local company, integration is more efficient than in most deals.”

– Charlie Bolten, CEO Solis Agrosciences.