Venture capitalists and other private equity investors continue to reshape the plant biotechnology world by investing in biofuel development, the latest example being a deal of undisclosed but assuredly significant size for Hayward, Calif.-based seed developer Mendel Biotechnology Inc.

Mendel has been slaving away in the lab for a decade, largely for seed industry master Monsanto Corp., developing a technology platform and portfolio of genetic information and patents relating mostly to food crops. The company has garnered at least $50 million in research money from Monsanto. But equity capital was scarce as investors, haunted by the specter of frankenfoods, shied away from the public face of genetic seed development, even as Monsanto and other agricultural chemical companies became reborn based on new genetically modified seed crops for animal feed.

It's difficult to say how significant Mendel's financing round from ZBI Ventures and Capricorn Investment Group is without a released number, but compared to the slightly more than $10 million the company raised as a food crop seed developer, it is undoubtedly a life-changing event. Mendel will continue to work with food crops, but primarily in ongoing work with Monsanto, and it, like its peers Ceres Inc. and Targeted Growth, will throw most of its eggs into the biofuel basket.

With a $22.3 million round last February, Targeted Growth signaled that its years of research on forestry and food crops would shift to fuel crops, and Ceres, with its $75 million round in August, did likewise.

The turn of events has been great news for plant biotechnologists, who are sanguine about investment fads and just happy to see increased activity. While biofuels are driving investment now, it was the progress researchers made in feed crops over the last decade that make the current science possible. And whether or not genetically modified crops end up dominating biofuels, investment will surely spur advancement in areas beyond fuel, including food crops and other human uses of plant technology. -- Clifford Carlsen

See Oct. 15 press release from Mendel Biotechnology
See Feb. 8 story from The Deal
See Sept. 27 story from The Deal
See April 20, 2006 story from The Deal