Mitti Labs raises $3m seed round to tackle methane emissions in rice farming

• Mitti Labs—a startup working on projects to tackle methane emissions in rice farming—has raised a $3 million seed round backed by Lightspeed Venture Partners, Voyager Ventures, Overview, and angel investors.
• The firm recently launched five projects across 30,000 hectares in India, with 10 more in the pipeline, and is working with Syngenta Foundation and Tilda rice maker Ebro Foods to train farmers in techniques it claims can reduce water use by 30% and methane emissions by 50%.
• These are measured using AI models trained on ground data and remote sensing to generate carbon credits, says the firm, which has been collaborating with Cornell University, the International Rice Research Institute, and USDA on methane abatement and measurement technologies.
• In its first rice season, Mitti Labs started collecting data, training and calibrating its models, says cofounder Xavier Laguarta. “This season is the first where we officially onboarded farmers into our carbon programs and so the first batch of credits should be issued around July, August, 2025.”

Rice is responsible for >8% of anthropogenic methane emissions

While it doesn’t produce as much methane as livestock, which account for almost a third of anthropogenic (caused by humans) methane emissions, rice production accounts for an estimated 8% of emissions, according to the UN’s Food & Agriculture Organization.

Some of this is generated from burning rice stubble after the crop is harvested, although the bulk comes from an abundance of methane-producing bacteria that thrive when rice fields are flooded, Mitti Labs cofounder Xavier Laguarta told AgFunderNews.

“The season starts with land leveling and then farmers set up a nursery for seedlings which are then transplanted into the field. The standard practice is continuous flooding throughout the season. And then after harvesting farmers usually burn the stubble so the leftover biomass acts as organic manure for the following season.”

Methane mitigation strategies for rice farmers

Mitti Labs—founded last year by Xavier Laguarta, Devdut Dalal and Nate Torbick—is working with local partners on established approaches to tackle methane emissions in rice farming, from DSR direct seeded rice (planting seeds directly into rice fields, which don’t have to be flooded all the time, rather than transplanting seedlings) to alternate wetting and drying (AWD), where fields are periodically allowed to dry vs being continuously submerged.

“There’s no silver bullet; it’s a menu of options,” says Laguarta, who notes that the goal is always to help farmers increase yields and improve productivity, which will in turn reduce emissions per kilo produced. “In each region, different approaches will work better. But the lowest hanging fruits are different seeding practices, water management, and no-burn at the end of the season.”

With AWD, he says, ‘For the majority of the season weeds are not an issue, so you don’t need to have constant water on the field. AWD is essentially letting the field dry down to a certain point throughout a big portion of the season. But for the last quarter or third of the season, you do want to have that water layer or you will have weed problems and yields will go down.”

As for implementation, he says, direct seeded rice (DSR) doesn’t necessarily require specialist equipment, although machinery is helpful, but it does require that farmers buy different seeds that are slightly more expensive.

“There are advantages to DSR for the farmer as it shortens the season slightly and means they don’t need to do the transplanting of the rice, which is usually a process that requires them to hire outside support for at least a week, which is pretty costly.”

AWD, he says, “is the easiest to implement, but it needs to be done well, meaning you need to let the field dry down to the right points and you also want to make sure you’re doing it at the right points of the season. But all you need is a pipe where farmers can observe what level the water is at, so that’s probably the lowest hanging fruit.”

For the no-burn strategy, he adds, “That requires a bit of a business model so the biomass needs to be collected and processed; it’s not enough to just say to farmers, hey, don’t burn the biomass.”

Monetizing methane reduction

But is there a clear ROI for farmers in engaging in these methane-mitigating measures, or will that only come from generating carbon credits? And if so, how credible are these credits in a voluntary carbon market that has come under increasing scrutiny?

According to Laguarta: “We’re always thinking what other levers can we pull to support farmers outside of carbon credits? DSR can deliver cost benefits in the form of reduced cultivation time, water and labor costs, and no-burn can potentially generate revenue if you find a market for the biomass, but AWD is purely offering an environmental benefit.

“And all of these programs are opex-intensive; we’ve got 120 field agents on the ground working with thousands of farmers and that means education, hand-holding, and training. So we need the carbon markets to come into the picture.”

Measuring and validating methane reduction in rice farming

And for that to happen, he says, Mitti Labs needs to both determine whether the claimed methane mitigation practice (no burn, DSR, AWD) was implemented, and if so, reliably quantify what that means in terms of reduced methane emissions in order to generate carbon credits that can be trusted?

“Say a farmer in a particular place went from continuously flooded fields to doing three dry downs this season and also practiced dry seeded rice: what does that mean compared to last season?”

Right now, he notes, “We’re only in our first year and we’re already working with 30,000 farmers each with one-hectare plots spread across India, so you can imagine the nightmare of tracking what each farmer is doing every week of the season. So that’s where we leverage satellite imagery and remote sensing. But it’s challenging because of cloud cover to accurately detect rice growth above water levels, how much water is on the field, soil moisture, and what type of seeding was done at that resolution. But if you’re able to do that, it provides that layer of transparency that’s so critical.”

Next, he says, “We need to measure the ground truth, so we have test and control sites with ground water level sensors and gas chambers where we take measures of methane, nitrous oxide, and carbon emissions to get an understanding of what’s happening in a given region where we can assume the soil types are relatively similar.

“Finally we use machine learning and process models or greenhouse gas models to come up with estimations that factor in all this data: what we’re getting from our satellite imagery, the gas chamber measures, soil organic carbon samples, water level sensors, and information from weather conditions in that season in that region so we can determine the water reduction that took place and the change in greenhouse gas emissions that took place.”

It’s not perfect, he says, “But it gets you as close as possible to a result without directly measuring every single field because that would not be viable.”

The evolving carbon credit market

To translate this into carbon credits, says Laguarta, “We currently work with Gold Standard, which is one of the larger carbon registries, although we might start working with Verra since they’re releasing a new methodology for rice methane reductions. But they define a minimum standard for what they believe will allow a credit to be issued.

“We view that as the minimum benchmark,” he adds. “We could be issuing credits with them without doing a lot of the work I’ve just outlined, but we’re doing it because high quality buyers in the market are relatively sophisticated in analyzing what constitutes a good project in their mind, and we want to prove to them that in the smallholder context in India, we can prove that these are high quality projects with real impacts on the ground.”

As for how credits generated from these projects will be valued in the voluntary carbon market, he said, “There is confusion over converting methane into CO2 equivalents and different ways of measuring methane. But what I hear from a lot of buyers of these credits is that their biggest concern when analyzing a project is its permanence.

“If I buy this credit now because you’ve planted some trees, what happens if someone cuts down those trees in 10 years’ time? It’s the same with soil. If someone tills your field, and sequestered carbon is released, what happens to that credit?”

What is attractive about what Mitti Labs doing, he claims, is that, “Even if a rice farmer engages in methane mitigation practices for three years and then goes back to the old way of doing things, that’s still a quantifiable amount of methane that hasn’t been released for three years.”

He adds: “What’s challenging with rice and methane is that honestly, it’s less mainstream [than other projects that generate carbon credits]. Corporate sustainability teams are not super large and they don’t have all have teams that can get into the science and understand what makes a high quality project for every single type of product.”

Methane reduction measurement technology as a service

So how do investors look at what Mitti Labs is doing given the uncertainty and skepticism around the voluntary carbon market?

Says Laguarta: “One thing that appeals to investors is that aside from just using this technology on our own projects, we are now able to use it on other people’s projects as well. I think they also appreciate that we’re realistic about the carbon markets in terms of expectations and we’re also leveraging other levers of demand to help farmers make changes.”