Agronomics Share Discussion Threads

[1chrism] 12/7/2024 08:46

Clothing giant Inditex (owner of Zara) buys a stake in Galyhttps://cultivated-x.com/investments-finance/zara-inditex-invests-galys-cultivated-cotton/

[peterrr3] 11/7/2024 12:51

Nick Good Meat are using 5000litre bioreactors, Liberation Labs will use 4 x 150000 litre and their CEO thinks full cost parity will come at 4m litres ( which he has built previously as a biomass reactor for biofuel). The feedstock can be very cheap where it is a waste product such as sugar mulch in Australia or corn waste in the US.In the meantime a minority product is fine to gain audience for these start ups prior to scale. It is also a fallacy to think precision fermentation cannot be profitable. It is the most profitable line for Aijinmoto who provide most of the global food add ins for amino acids, msg and similar. They turn over 240b yen at 30 percent margin in the division. These start ups can target more niche value add markets too such as cosmetics and health products.

[1chrism] 11/7/2024 06:24

Thanks for the copy and paste Nick. Worth noting that Good Meat (non ANIC) are the opposite of quiet, their comms on the opening of a fridge and $300m fundraising are a testament. If their CEO wasnt the only individual in the industry Jim Mellon openly complains about Id say ANIC should sign him up!The 3% idea however may be the most sensible thing they do. Lab meat will be an ingredient before it is a singular product - at scale. And despite the media attention we are still 5-10 years away from scale in terms of it being an ingredient. Not only because (at present) this is most acceptable culturally but as yyou say the cost of media remains prohibitive. ANICs portfolio is 1/3 reliant on meat.

[1chrism] 10/7/2024 09:07

Lab grown meat in the Daily Mailhttps://www.google.com/amp/s/www.dailymail.co.uk/sciencetech/article-13615493/amp/lab-grown-meat-Scientists-korea.html

[peterrr3] 09/7/2024 02:55

Nice new interview with Solar Foods and a promo video of their plant. It looks like they have ironed out the bugs and are fully operational.https://solarfoods.com/news-and-blog/

[1chrism] 07/7/2024 15:13

Article on Meatly with Owen Ensor interview. Most interesting is discussion of cooperation with FSA. He notes how the FSA finds it difficult to work with under current regulatory proceses; insofar as they are not set up to work with cell. ag. companies.On Meatly's own regulatory process Ensor says either a few weeks before or after election, citing August as some kind of deadline. A confident company and one wonders if the FSA dawdles beyond August could they take their operation over the pond.https://www.greenqueen.com.hk/meatly-pet-food-lab-grown-meat-cultivated-dog-chicken-uk/

[1chrism] 05/7/2024 16:37

Nice bit of galvanising withing cell. ag. industry:https://cultivated-x.com/fairs-events/food-innovation-europe-cellagri-portugal-conference-cellular-agriculture-europe-12-members/Also, it seems like somewhere in the universe on a trading floor, someone took a day off from selling

[1chrism] 01/7/2024 09:11

Interesting to see Upside's free food protest in Florida getting some headlines. Although not ANIC there has yet to be a 'right to reply' on the everyday press until now.As the sector is still very much in the lab there is understandably not very much of marketeering approach, this will need to change otherwise the banning will go on with impunity.https://www.yahoo.com/news/lab-grown-meat-maker-hosts-193558025.html

[peterrr3] 30/6/2024 17:57

I agree nano, liberation is building a pilot plant for this stage, just a big one. I am kind of hoping though they are currently beefing up their accounting team because the finance director is doing what the main role of the job is, which is finding cheap debt.

[nanopayments] 30/6/2024 13:58

I disagree. I'm sure Liberation Labs upcoming Series A will involve some equipment financing, but expect the majority of it to be equity. Let's see.

[peterrr3] 30/6/2024 08:52

Liberation Labs thinks cost parity needs a 4m litre plant, which Warren has built before in Brazil. You are not going to do that on equity if you can help it but debt based on your pilot operations. I am used to mining pilot plants using new tech scaling up before profitable, but with an off take. In my thinking this is no different, same risk, same reward.

[peterrr3] 30/6/2024 08:16

Having done a couple of crashes with very large privates debt is actually a very good form of capital because if you have enough of it you have the bank by the balls, not other way around. If you show them a glimmer of light they always extend. For major delays I've bridged extras under my protest at 20 plus percent because the owners didn't want to dilute, they proved right. Apart from those wanting to lift profile I don't know anyone who hasn't hit the banks up before going to the vultures.

[nanopayments] 29/6/2024 13:34

It doesn't particularly surprise me that Meatly is projecting EBITDA b/e to be as far out as 2030. Once regulatory approval has been secured, the next major milestone will be profitability for these companies and I that only comes when revenue ramps, which means the product will have to be at price parity, which in turn will require scaling and mass production, and that will require more capital, probably a lot more. So we are circling back to the earlier discussion. The fact that Agronmics is unlikely to participate materially in this (and shareholders benefit) with the share price trading so far below the NAV is extremely disappointing, and while I see currently valuations as attractive, there is also an important negative implication to cheap shares.

[mjneish] 29/6/2024 10:48

I messed up the previous link, excuse me.

[mjneish] 29/6/2024 10:29

Meatly's products are being sold at a massive loss. They don't expect to achieve EBITDA break-even until 2030 or so, according to one of their presentations earlier this year. If they're making it they might as well sell it, and in the meantime they can start getting customers used to this new paradigm as from now and gauge how the market is reacting.

[1chrism] 29/6/2024 07:22

Interesting article in Yahoo. An interview with Owen Ensor, CEO of ANIC founded Meatly (lab chicken pet food). The article says Meatly's first product will be available this summer. Meatly are working with Omni and have created Omnifeast. Pets at Home invested around £4m last year. If this is true it will be the first win for an ANIC backed product. However, we still have yet to hear about regulatory approval, so we shall see.Also equally interesting (perhaps even more so) is the news that Meatly are seeking regulatory approval in the US working with an R&D partner. The article also mentions another ANIC portfolio company, Bond Pet Foods who are based across the pond. https://ca.style.yahoo.com/lab-grown-meat-cat-coming-000751383.html

[nanopayments] 29/6/2024 06:56

Debt can be a very unforgiving form of capital, because it needs to be paid back on a predetermined future date (perpetuals are extremely rare), otherwise the company defaults and that makes it virtually impossible to raise new capital. There is no leeway if something unforseen to delay the path to revenue generation. This is why most startups and young companies prefer equity financing.

[quepassa] 29/6/2024 06:09

intelligent and intellectually stimulating posts.

thank you.

[peterrr3] 29/6/2024 05:08

The founders don't want to be diluted unless absolutely necessary or they are being paid too much, which is why they always chase debt if they can get it, then go to vc when they can't. Debt is still historically cheap, despite the complaints. Projected ROE should be at least 20 percent or why bother.

[nanopayments] 28/6/2024 20:21

I agree that the share buyback would have been a waste of money, but interest rates have risen substantially in the last few years and market cap valuations for the likes of Onego Bio and LL have risen recently, so I doubt portfolio companies would want to use debt rather than equity to raise capital. From the recent Mark Warner interview, it sounded like LL won't have any difficulty raising capital, so I think it's unlikely they need Agronomics to bridge the gap. I would be surprised if our stake doesn't get diluted, though I still think the ultimate prize is big enough that it won't make much difference.

[peterrr3] 28/6/2024 17:09

I've raised the lack of accountability and conflict of interest on the Mellon service agreement before, but I don't see much of a ramp up in the NAV in the immediate period. The risk exists the share price will remain at a hefty discount for a few more years and there is not enough institutional muscle to force the termination clause, but I'll take a free carry on the next run up and live with it. I also took the 10 year cash runway statement with a grain of salt.Some of the portfolio companies have built pilot plants on the back of soft loans or grants on top of the series A. Those may be able to use more debt than equity in a scale up, especially if there is existing supply contracts. I also reckon ANIC would cough up a few million and risk a qualified audit to bridge the gap if it meant Liberation Labs could come online next year.Share buyback, sorry what would that have achieved, imo nothing apart from running out of money earlier.

[mjneish] 28/6/2024 14:54

There's also the buyback programme that wasn't.

They were careful not to guarantee that any shares would be bought back, and they must have had good reasons not to, but it would be nice if they could explain themselves.

[quepassa] 28/6/2024 10:57

Very good post and many salient points.

The last two sentences of your first paragraph are particularly interesting.

all imo. dyor.
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