5 ways Monsanto wants to profit off Climate Change
Global warming could mean big business for controversial agriculture giant Monsanto, which announced last week it was purchasing the climate change-oriented startup Climate Corporation for $930 million.
Agriculture, which uses roughly 40 percent of the world’s land, will be deeply affected by climate change in the coming years. In 2007, the Intergovernmental Panel on Climate Change predicted that warming will lead to pest outbreaks, that climate-related severe weather will impact food security, and that rising temperatures will hurt production for farms in equatorial areas. (In areas further from the equator, temperature rise is actually estimated to increase production in the short term, then harm production if temperatures continue to rise over 3 degrees Celsius in the long term.) Meanwhile, increases in the global population will make it crucial for farmers to be efficient with their land, says UC Davis professor Tu Jarvis. “The increase in food production, essentially, in the future needs to be in yields—output per acre,” Jarvis says, even while weather patterns make farming less predictable or more difficult in some places.
Monsanto, meanwhile, has been gearing up to sell its wares to farmers adapting to climate change. Here are five climate change-related products the company either sells already, or plans to:
Today’s big acquisition is a huge agritech exit: Biotech company Monsanto has bought Climate Corporation for approximately $1.1 billion. While the Monsanto press release says $930 million, we’re hearing from investors that the actual price is past the $1 billion mark, because part of the all-cash deal will be paid out over time as an employee retention plan.
Climate Corporation is backed by Founders Fund, Khosla, Google Ventures, NEA, Index Ventures and Atomico. The company uses machine learning to predict the weather and other essential elements for agribusiness.
Monsanto focuses on providing seeds, biotechnology traits and crop production products for farmers around the world. The acquired company will continue to operate as the Climate Corporation, and Monsanto will leverage its big data expertise to optimize farming globally.
This is a pretty cunning move. It comes on the same day that Monsanto — one of the world’s largest argibusiness companies — reported a larger-than-expected, increased 4th quarter loss, of $249 million, or $0.47 per share.
And Monsanto is positioning this acquisition as part of a longer-term recovery plan, hoping that Climate Corporation’s climate change monitoring technology will help Monsanto manage future risk better. Monsanto has weathered (pun intended) a lot of bad PR over the years around issues like genetic modification and the general trammelling of smaller agricultural enterprises, so it will be interesting to see how Climate Corporation fits into that mix.
The Climate Corporation is a San Francisco-based company that examines weather data to provide insurance to farmers who can lock in profits even in the case of drought, excessive rains or other adverse weather conditions.
The company was founded as Weatherbill in 2006 by two former Google employees, David Friedberg and Siraj Khaliq.
On October 11, 2011, the company changed its name to The Climate Corporation and announced that former Senator Byron Dorganhad joined its Board of Directors.
In October, 2013 Monsanto announced that it was acquiring the company for approximately $1.1 billion.
Prior to founding The Climate Corporation (formerly WeatherBill) in 2006, David was with Google, where he joined as one of the founding members of the company’s Corporate Development team. David managed a number of strategic projects for Google, including identifying and leading several of Google’s largest acquisitions. David also served as a Business Product Manager for AdWords—Google’s primary revenue source. Before Google, David spent several years working in private equity and investment banking. He has invested in and advised dozens of companies in the technology industry. Earlier, David worked at the Lawrence Berkeley National Laboratory, where he led several projects as a mathematical programmer. He has a degree in Astrophysics from UC Berkeley.
big business and big government love the meme of climate change and all that it entails..they are ready to cash in on the biggest cash cow of all time..monsanto will be leading those companies with the 5 reasons noted above..just like all the energy companies who are now “green”..monsanto wont give you insurance for your farm unless you have its seeds..count on it..
the fingerprints of google..the company who wants to rule the world..are all over the climate corporation..friedberg is the jewish man who founded it..after spending years in investment banking..such a noble job eh?