Losing a corporate headquarters is generally not considered good news.
Yet the announcement that Creve Coeur-based Monsanto is likely to be acquired by Bayer is being viewed by many in the startup community as a positive.
“I have a tear in one eye and have a sparkle in the other,” said Brian Clevinger, a managing director of the ag tech for-profit incubator, the Yield Lab.
Clevinger said losing Monsanto will be hard for non-profits that have benefitted from the company’s long history of philanthropy. On the other hand, he said it will mean new money and ideas flowing into startups.
“Suddenly there will be available massive amounts of ag expertise. They’ll be scientists, there will be business folks, and you just know they have ideas for new companies,” Clevinger said, “and we’ll be thrilled to be there with open arms to help them start up new entities.”
Bayer has said the North American headquarters of the combined company will be located in St. Louis, along with the Crop Science Division. With such a concentration of plant science research based in St. Louis, the expectation is that most research jobs will be safe.
In Monsanto’s corporate offices, early retirements and layoffs are very likely.
“There are going to be a lot of people like that offered severance packages who are going to take them and then think ‘but I didn’t want to go to the beach... so what am I going to do next?'” said Jack Levy, a partner with the venture capital fund ICV.
He said those executives would be valuable assets on the advisory boards of ICV’s portfolio companies. Those discussions are already happening with officials at other big ag companies that are merging, he said.
What about for startups that are already dealing with Monsanto or hope to do so?
NRGene is an Israeli big data genomics startup that opened an office St. Louis this last April. CEO Gil Ronen said two potential customers would now become one very big one. Ronen said that’s a positive for a company like his, in part because there’s very little overlap between Monsanto’s and Bayer’s crops.
“We see as a small company that our customers are getting bigger and bigger; that means our technology is more relevant,” he said. “The bigger our customer is the more cost-saving is our technology. We would save Bayer-Monsanto more dollars than each of them alone.”
For St. Louis residents who have experienced the loss of corporate headquarters many times before, a positive spin on the Monsanto acquisition might be hard to swallow. Jack Levy said he gets it. He was in town staying with friends when the news broke.
“I started out that morning and they said ‘oh Jack, at first it was General Dynamics and then it was Anheuser-Busch,” he said, “and I feel the pain a little bit, but I’m like ‘guys this is an opportunity as much as it is something potentially negative.’”
After all, he said there are young companies starting out today that could be as big as Monsanto in 10 years.