Xtrem Biotech, which develops, produces and commercializes biostimulants, biofertilizers and pesticides of biological origin, grew out of a university research group with a combined total of 30 years’ experience.
The startup was the result of a bold venture by a group of friends, family, investors and professors of the University of Granada, who were convinced of the huge potential of the technology that could be generated with microorganisms for the benefit of the environment.
"The idea of setting up a biotech startup came at the beginning of 2013 among a group of people, including the University of Granada research group BIO-188 (Microbial Exopolysaccharides), in which my mother had been working for a long time," Borja Torres Béjar, Xtrem Biotech's CEO and founder, told CompassList at the 2019 Smart Agrifood Summit.
His mother, Dr Victoria Béjar Luque, leads the research group and is a professor at the university. She is currently one of the advisers to Xtrem Biotech.
In addition to fungicides for the agricultural industry, Xtrem Biotech develops biosurfactants for cleaning products and bio-gelifying products for the cosmetics industry as well. It also provides microbial identification services by molecular techniques, phylogenetic analysis, antimicrobial activity assays and microbiologic analysis.
“The knowledge and expertise within the company came from the research group, which not only worked in the laboratory but also scaled to a production plant for the cultivation, formulation and packaging of biostimulants, primarily for the agricultural sector,” said Torres, who has a bachelor’s degree in Business Administration and a master’s in International Trade.
Extremophile microorganisms
Located in the Technology Park of Health Sciences of Granada (BIC Granada), Xtrem Biotech also markets extreme microorganisms for industrial use. The company has an exclusive collection of use-patented extremophile bacterium, such as XT1, which is used in major agricultural markets.
"Extremophile microorganisms are those that live in extreme environments. These bacteria, which come from soils all around the world, have been isolated in the laboratory and selected for being the most promising,” Torres said. They were also the inspiration behind the name of the company.
"Salinity, one of the main causes of soil impoverishment, is a growing problem in agriculture due to the recurrent use of mineral fertilizers. Extremophile microorganisms are good candidates for poor and dry soils."
Plant strengthening and fertilization with bacteria is nothing new. It has existed in nature for billions of years. However, the challenge is to add biotechnology to traditional fertilization for sustainable soils and to grow quality food.
“Microorganisms function as a biofertilizer providing nutrients. That is, fixing nitrogen and stimulating the plant. When the soil is rich, plants can grow properly. Microorganisms also carry out a biocontrol activity preventing other aggressive pathogenic microorganisms from entering and reducing plant yields,” Torres said.
However, extremophilic microorganisms won't necessarily replace fertilizers; they can be used with fertilizers in what is called co-formulation.
“It is estimated that 40% of the fertilizers in the soil is blocked and not available to the plants. Using co-formulation, the microorganisms transform those fertilizers making them available to the plants. In the end, what microorganisms do is to transform the chemical materials that exist in the soil, naturally or artificially, making them available for the roots,” Torres added.
Investors over grants
Xtrem Biotech has 13 partners, all friends and family of Torres, except for a local chemical fertilizer company, Herogra Especiales, which the startup started working with in 2014.
Herogra Especiales has a non-exclusive distribution agreement with Xtrem Biotech’s products that the two companies developed together. This includes the Heroprotect Micro, a biostimulant that, among others, promotes the optimal development of the roots of a plant and helps to improve the assimilation of nutrients.
Xtrem Biotech has received grants and funding for innovation from the European Commission and the Spanish Government’s Centre for the Development of Industrial Technology (CDTI). It has also participated in two acceleration programs. One was with BIC Granada and the other with TERRA Food & AgTech last year, coming in as the only Spanish startup among 17 most innovative spin-offs in the world.
The company is now looking for investment to enable its continued growth. “We are very focused on looking for professional investors and to stop looking for subsidies,” said Torres.
“Sometimes, excessive focus on subsidies and projects, makes you stop looking for investors, who are people that you will really need in the medium and long term.”
Torres is one of the three full-time staff of Xtrem Biotech; the other two are biologists, who left the research group of the University of Granada to work in the startup.
Seeks global partnerships
According to Xtrem Biotech, the bio-stimulants market is worth US$2.9bn with a CAGR of 10.4% and the bio-pesticides market is worth US$6.6bn with a CAGR of 18.8%. Another report put the global biotechnology market as surpassing US$775bn by 2024 while the bio-agriculture segment was valued at US$40bn in 2017.
However, in order for Xtrem Biotech to expand further, it needs to partner with major global players in the agtech sector. “We are a small B2B company working in biotechnology. We need alliances with other companies so that our developments can reach consumers worldwide,” Torres said.
He is particularly interested in global giants that command both an extensive market reach and strong investment capacity. Bayer Crop Science and Syngenta, for example, could be investors or partners of Xtrem Biotech, he said.
"Our goal is to license our technology to a big player. In fact, we are already working on it. But if that operation is not successful, we think that this possibility will be repeated with some other company." He did not provide more details.
The company has had to overcome logistics hurdles to send microorganisms overseas. "On one occasion, customs stopped a shipment and prevented us from doing a test with the largest sugar producer in Mexico," Torres said.
Microorganisms are replacing chemicals because they cost less and are easier to register than chemicals, but to proceed to the registration stage there is a need for strong investment. To be able to sell their products, phytosanitary registration certifying that the products are free from harmful pests and plant diseases is required. This is the most complex and expensive procedure in the sector.
So far, the partners have invested about €100,000 in the company. They have also received soft loans from public institutions and won about €200,000 in public grants.
“Although in Spain, we are technologically good, in my opinion, they [Spanish investors] are not big enough or lack biotechnology expertise," Torres said. "I've seen very good projects fall over time due to lack of traction. We need to establish some kind of tools to recover these companies’ assets and acquired knowledge to give them a new opportunity."
