Fertilizer is one of the most widely sought inputs for agriculture. In 2019, US fertilizer consumption totaled 20.8 million tons, according to the US Department of Agriculture’s Economic Research Service.
But for all the growth-related benefits it brings, there are plenty of problems, too. Fertilizer runoff from US cropland has traveled down the Mississippi River and into the Gulf of Mexico, creating an algae bloom the size of Connecticut, for example. The algae thrives off the waters, nutrient-enriched by the runoff. When the algae dies and sinks to the ocean floor, it creates an oxygen-depleted dead zone, making it impossible for marine life to survive.
Pennsylvanian startup Phospholutions recently raised $10.3 million in a Series A round led by the Continental Grain Company‘s CGC Ventures. Other investors included Maumee Ventures — the VC unit of agribusiness The Andersons — Tekfen Ventures, the Ag Ventures Alliance Cooperative, and 1855 Capital.
Phospholutions’ core technology is a soil amendment or fertilizer additive called RhizoSorb that improves the delivery of phosphorus and other nutrients to the crop, enhancing the efficiency of fertilizers. It can be applied with phosphate, or is added to phosphate fertilizers during the manufacturing process. The startup reports “dramatic declines” of up to 75% in use rates of fertilizer products when RhizoSorb is applied.
“It is unique in the sense that it has a very controlled-release mode of action that is dependent on plant demands rather than environmental conditions,” Phospholutions CEO Hunter Swisher told AFN.
Phospholutions started by targeting turn and ornamental markets and is now shifting towards row crops like corn and soybeans. It will use the Series A funding for general growth, and will focus on building a farmer network and establishing the right partnerships to reach its new target demographic.
“This year, it’s a lot of large-scale field trials with our grower networks, working with a few partners, and getting real farmers to give us real feedback. We are also probably more than doubling our team this year,” Swisher said.
The startup is envisioning two paths to market: one, selling through retailers and distributors that can blend its product with other inputs; two, targeting phosphate producers to incorporate Rhizosarb during the production phase.
Nutrient management technologies
A number of startups are targeting the nutrient space with a range of technologies designed to help plants do more with less. California’s Sound Agriculture, which raised a $22 million Series C round last year, offers a molecular biology-backed line of crop inputs, as well as a platform to rapidly create new seed traits without gene-editing techniques. It recently signed a China distribution deal with Syngenta.
Vancouver-based Ostara recovers phosphorus and nitrogen from industrial, agricultural, and municipal water treatment facilities and transforms them into Crystal Green, which the company describes as a premium, sustainable fertilizer.
Swisher doesn’t see these as directly competitive with Phospholutions’ offering, however.
“If there is any activity in phosphate fertilizer efficiency, it is probably around microbials, and that space is more concentrated on nitrogen,” he suggested. “If we are talking about legacy competitive technologies, it’s probably more about the polymer-coated technologies that have been used to enhance the efficiency of fertilizers. The downside of those is that they are purely based on environmental conditions and very independent of plant uptake and growth.”
There is probably room for plenty of players given the never-ending demand for fertilizer. Still, challenges lie ahead for Phospholutions. It needs to get closer to farmers, and keep an eye on the regulatory landscape – which might view the startup’s simple, additive-based approach favorably.
“As with anything in ag, folks are skeptical, and there’s a pretty long adoption curve as you have to get quite a bit of data and have to align with the right partners,” Swisher said.
“We have actually found it to be pretty successful, I think due to the straightforward nature of what we are trying to accomplish.”