The fall armyworm is considered by many to be the most destructive and costly pest that farmers battle around the globe, especially for smallholder farmers. With limited access to inputs or a lack of financial means to purchase the right products, controlling the fall armyworm is often a losing battle. Novel pest management startup Provivi is teaming up with the Bill & Melinda Gates Foundation to make the fight a little fairer for smallholder farmers in developing countries.
“The reason that we want to work with the foundation is because we have always had, as an internal goal, the idea of doing ‘one acre for one acre,’” Pedro Coelho, co-founder and CEO of Provivi, told AFN. “Meaning, for every acre that we develop in sales, we will be developing one acre on a non-profit basis for smallholder farmers in developing countries.”
The Santa Monica, California-based startup recently added $10 million from the Bill & Melinda Gates Foundation to its $45.5 million Series C2 round, which it announced in December 2020. It closed an $85 million Series C in October 2019.
In exchange for buying shares in Provivi, the startup commits to developing versions of its product that it can sell to smallholder farmers in Kenya, Bangladesh, and India. The products that it develops will be used to combat pests that have a disproportionate impact on their farming operations. It has already been working in Kenya for over two years.
Essentially, Provivi hopes to achieve something similar to TOMS shoes; if you buy a pair of shoes, TOMS donates another pair for a child in need.
To date, the startup has attracted $160 million in total funding. Its investors include Pontifax AgTech, Temasek, Spruce Capital Partners, Vivo Capital, Lanx Capital, Tybourne Capital Management, and Kairos Ventures.
Provivi produces pesticide alternatives for farmers based on insect pheromones. Pheromones are naturally-occurring chemicals that animals secrete to find one another for mating. Applying specific pheromones to a field confuses the pests and prevents them from finding one another. The result is a non-toxic pest management system that is preventative in lieu of a chemical-based approach that is reactive to pest infestations that have already likely caused crop damage.
And unlike chemical pesticides that kill a wide variety of living organisms, the pheromones are only relevant to the specific pest species for which they’ve been tailored. Its current offering is a direct-to-farmer product that combats the fall armyworm. It also provides products to the orchard industry for high-value crops like apples and grapes.
Its flagship product is a pheromone for the fall armyworm, which plagues corn crops in Mexico and overtook Japan last year, according to Coelho.
Getting the Gates Foundation on board was no simple task, according to Coelho. The due diligence process was extensive and involved around nine months of work.
“We couldn’t find a better partner to develop this idea than the Gates Foundation,” Coelho says. “The countries in this project are countries that are very much in the strategic scope of the foundation and they have a lot of experience in piloting these initiatives that then become self-sustaining. The whole philosophy of the foundation is to not subsidize an initiative forever, but to seed something that pays for itself and is sustained by its own merits.”
Some of the foundation’s investment will go towards helping to educate the target smallholder farmers about the product, for example, as well establishing a relationship between the farmer and Provivi to continue purchasing the products at cost.
In addition to pursuing the Foundation-backed project, Provivi is continuing to explore new applications for its technology. Coelho is tightlipped about any details but mentioned the corn rootworm, which affects corn production in the US corn belt and other parts of North America.
“The corn rootworm is the most important pest in the US. We are doing some exploratory work there. We’re planting some seeds there that I think will take at least a year before we learn anything.”
The startup is facing some challenges when it comes to production due to its dependence on third-party producers. It does not own its own factory and instead relies on third parties in Europe and the US. With customers in Mexico, Indonesia, Brazil, and Kenya, the supply chain is long and complicated, according to Coelho.
Despite the bottlenecks, he is pleased with Provivi’s performance over the last six months including new regulatory approvals in Brazil and Indonesia.
“The focus for 2021 and 2022 will probably be how quickly we can scale production to meet the emerging demand. That’s the first thing.”
The Gates Foundation has invested in at least one other crop protection startup: Massachusetts-based Enko, which uses pharmaceutical discovery techniques to advance promising modes of action for fighting crop pests. It also backed India’s dairy-focused Stellapps, which marked the foundation’s first equity investment in India.
The Gates’s were also recently named as the largest private farmland owners in the US.