Pivot Bio Realigns Resource Allocation
Breaking down Pivot Bio news and what it means for the company.
A Letter from the CEO of Pivot Bio - Pivot Bio
This week Pivot Bio CEO Chris Abbott shared a letter citing operational updates.
A portion of that included the following (emphasis mine):
We will be reallocating and focusing our resources on the products that deliver the most value to our growers and investing in core centers of excellence throughout the Midwest, closer to the epicenter of agriculture in the United States. These changes include an update to our teams and how we resource against our key initiatives and investments. To make these investments requires adapting some areas of our business and our employee footprint. We don’t take these decisions lightly, but we believe these changes will help us deliver the innovation growers expect from us. We expect these moves to help us more than double our manufacturing capacity to meet our forecasted demand.
A softer approach to stating employee layoffs.
It isn’t clear the number of layoffs, however, seems unlikely that it would be mentioned if it wasn’t 10%+ of staff. According to LinkedIn, they have 477 employees— using my assumption this would likely indicate it’s above 50 layoffs total.
The news comes a week after AgBiome suggested they will have to make significant layoffs.
Notably, these are the two biological agriculture companies that have raised the most venture capital, with Pivot Bio raising $617 million and AgBiome raising $250 million (both according to Crunchbase).
The difference, though, is that Pivot Bio has product-market fit, announcing that they have over $100 million in revenue for 2023 earlier this year. It is unclear whether AgBiome has any meaningful revenue through its two commercial products.
The high revenue numbers for Pivot indicate the cuts aren’t as dire as AgBiome, but worth paying attention to. Chris Abbott was named CEO in August, and this move is likely the first step in his moving the company forward, consistent with his views of what is necessary for the company.
Given the macroeconomics environment and the stage the company is at (the company is 12 years old), that likely means focused priorities based on their current product offering to manage expenses and profitable unit economics.
Profitable unit economics are important for all businesses. Especially agtech startups in the current environment.
Last month I wrote about Pivot Bio Revenue Numbers Impress. What Products and Partnerships are Next for the Organization?