Groundwork BioAg recently announced the close of a Series B round with previous investors ICV in addition to Middleland Capital’s agriculture technology venture fund, SRK Management Company, and F&C Climate Opportunity Partners. Groundwork BioAg develops, produces, and commercializes highly-effective mycorrhizal inoculants for mainstream agriculture.
Natural mycorrhizal fungi have been proven incredibly effective when it comes to helping plants absorb nutrients in the soil. According to Groundwork BioAg, mycorrhizal inoculants increase crop yields and reduce fertilizer requirements. The company has specialized in providing highly-concentrated mycorrhizal inoculants for agriculture producers.
AgFunderNews recently had the chance to speak with Groundwork BioAg’s vice president of sales and marketing, Dan Grotsky, about the recent funding, mycorrhizal inoculants, and what may be next for the bioag company.
How would you describe mycorrhizal inoculants to a layperson?
Mycorrhiza is a symbiotic relationship between fungi and plants. The mycorrhizal fungi latch onto the plant roots and effectively extend the root system in a microscopic underground web (hyphae). They break up soil nutrients and mobilize them into the plant root. Mycorrhizal plants are “better fed.” Therefore, they are healthier, provide higher yields while using less fertilizer, and are more resilient to stress.
How did Groundwork BioAg get involved in manufacturing mycorrhizal inoculants for agriculture?
Israel’s Agricultural Research Organization (Volcani Center) has been developing these technologies for 25 years now. Yossi Kofman, our CEO, and I saw the potential in the plant nutrition market, and we actively sought an idea to found a venture in this space. I heard a lecture given by Danny Levy, our vice president of research and development who at the time was working at the Volcani Center on mycorrhiza, and approached him afterward. The more the three of us explored the technology and the business model, the more we realized that we’ve found a potential market disruption. The bioagriculture market is estimated at $2.8B, and growing at 15% CAGR—perhaps the fastest growing segment in agriculture. From that point on, it was full steam ahead and we never looked back.
Are the inoculants currently being sold on the market?
Yes, we have already begun with some direct sales, mostly as a proof of the business concept. We are currently building our sales channels in several territories worldwide in order to scale.
Are there any other products like this on the market?
Mycorrhiza exists in nature for over 400M years. Mycorrhiza has been extensively researched for over 50 years. Mycorrhizal inoculants are sold on the market today. However, mycorrhizal fungi are difficult to produce cost-effectively, and thus have not penetrated mainstream agriculture, such as row crops. Groundwork employs a disruptive production method, resulting in inoculants that are 10-100X more potent than competitive products (in terms of propagules of glomus intraradices per gram of inoculant). Our low production cost allows us to deliver a cost-effective product and successfully penetrate mainstream agriculture markets. Field trials have demonstrated double-digit yield increases in major crops, including corn, sunflower, bell pepper, banana and potato.
What are some of the challenges to this technology?
Our production method is unique, and is considered a core competence. Reaching a high quality, highly-concentrated, highly-effective mycorrhizal inoculant is no small feat. Producing such a product consistently within the price point of row crop growers is an even greater one. Groundwork has proven that it can meet this challenge, and continues to improve and further develop its product offering.
How will this recent funding be used?
This funding will be used for further product development, production ramp-up, and development of sales channels.
What is the regulatory landscape surrounding manufacture of mycorrhizal inoculants?
Mycorrhizae are prevalent in natural soils worldwide, but are destroyed by modern agricultural techniques. Our products are 100% natural, are not considered pests or otherwise harmful in any way, and have been extensively researched. To that extent, most countries require a simple registration process for importation, no more.
What’s next for Groundwork BioAg?
Groundwork is scaling production and building sales channels, and we’re moving fast. 90% of all plant species in the world benefit from mycorrhiza, which translates to enormous market potential. Of course, as a new venture, focus is key. Our initial focus is corn and soybean in the United States, two crops in one territory that cover 180 million acres alone, representing a one billion dollar opportunity for us. We are also actively targeting territories where crops suffer from stress, where mycorrhiza can increase plant resilience and have a significant impact.
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