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Sound Agriculture raises $22m Series C to save fertilizer costs and ramp up on-demand plant breeding

May 19, 2020

“A lot of growers have been saying to me they have to be laser-focused on the bottom line now. They want to protect the planet but they aren’t going to do something unless it makes them more money,” Adam Litle, Sound Agriculture’s recently-appointed CEO tells AFN. He joined the Bay Area startup on April 1 as the pandemic began to take hold and is now announcing a $22 million Series C round of funding led by S2G Ventures. Existing investors, Cultivian Sandbox, Fall Line Capital, Cavallo Ventures, and Syngenta Ventures also participated in the round.

“As we likely head into a recession, we don’t know how long it will last or how it will affect agriculture. We wanted to make sure we have a runway going into the future,” Litle adds. “We are working on some things that already fit quite well into this post-Covid-19 world.”

Sound has mostly made a name for itself by developing crop solutions that help plants make better use of nitrogen and phosphorous in the soil while giving farmers an eight to 10-bushel boost per acre (~25%) without requiring additional fertilizer. It launched its flagship product, Source, in 2019. It doesn’t quite define its product as a biological input but rather ‘bio-inspired’ because its mode of action is a chemistry, but it reduces grower dependence of synthetic fertilizers because it stimulates the soil microbiome around the crop’s roots, enabling the crop to manufacture fertilizer at the root zone. This results in up to 50lbs worth of nitrogen fertilizer replacement, while increasing yield per acre, says cofounder and CTO Travis Bayer who calls it “a new approach to replacing nutrition.” Helpfully the product comes in a jug, is shelf-stable, and can be loaded in a regular tank for foliar application.

In a modern field, the beneficial microbes in the soil that do nitrogen fixation are effectively turned off due to the synthetic inputs used,” says Bayer. “Our product acts as a signal to turn them back on. It’s a natural chemistry that excites the bugs [microbes] to produce more nitrogen; it mimics a signal to establish symbiosis.”

A hard sell during Covid-19?

Selling growers non-traditional inputs, even if they still use some form of traditional chemistry, can be an uphill battle. Throw in a global pandemic causing severe supply chain problems, and growers grip their pocketbooks even tighter. The new reality is not daunting for Sound, however, which has simply shifted its messaging to highlight a different side of its input offering.

“Yes, our product increases yields but it’s also saving money on input costs and reducing the use of nitrogen and phosphorous. The ROI conversation is very front and center now. We have promoted that big time,” Litle says.

Now, Sound is making a foray into a new universe, which it describes as on-demand plant breeding. With the new offering, it hopes to improve the nutrition, taste, and sustainability of food without relying on gene editing technologies.

“Our technology is really based on some fundamental discoveries in the field of epigenetics,” Bayer tells AFN. “What this allows us to do is to change the attributes or traits of a plant but do so by guiding its natural functions without adding anything new or editing its genes. It’s very fast.”

As food producers adjust their sails to cope with the pandemic’s changing tides, the ability to achieve desired trait adjustments in a short time frame will come in handy, he adds. While a CPG company may have been fine with a five-year timeline for a new product or ingredient launch, the world is changing too quickly now for that timeframe to continue being successful especially in the Covid-19 market.

“I love how Sound is at the intersection of the producer and the consumer,” says Litle. “This is a tech platform that can play on both sides; we have an initial grower product but we also have tech that can address consumer tastes and preferences.”

The brand is seeking partners to co-develop and produce new food traits. A few examples include non-browning potatoes, tomato varieties, or seedless watermelon. They’re taking a broad approach to identifying opportunities to apply their technology, as well. 

“As we look into opportunities, it’s very broad on the plant side, including even nutritional supplements as well as produce and CPG. Anywhere we can look at plants as ingredients and how to shift them through gene expression. That’s exciting,” Litle says.

From Granular to Sound

Litle joined Sound from Granular, the digital ag startup that sold to DuPont for $300 million in 2017, where he was chief revenue officer. Before that, he worked at Solum, the soil science company that was focused on getting better measurements about fertilizer efficiency. Solum was acquired by The Climate Corporation in 2014. But his core focus has always been on “the potential for science to impact sustainability,” he tells AFN. 

Sound was founded over seven years ago as Asilomar Bio from research in the UK around how to improve the health and wellbeing in agriculture in a smallholder farmer setting, specifically focusing on a few critical problems in Sub-Saharan Africa.

“This really led us to develop our first crop enhancement platform and to thinking about how to use bio-inspired products for farmers to use to increase their yields and efficiency,” says Bayer. The company got funding from the Gates Foundation in the early days and its first round of venture funding in 2015 when both Cultivian Sandbox and Fall Line Capital invested.

Offering his biggest learnings at Granular, Litle says the core DNA of Granular was “about creating a really good product and customer experience more than anything else. We were known for having the best customer experience bar none. We also didn’t go all over the map from a software perspective; in digital it’s important to choose a beachhead instead of saying you’re going to serve everyone. We have to be careful about keeping focus.”

But isn’t Sound’s offering diversifying quite a bit with the breeding tool aimed at consumer preferences and the crop enhancement product?

“It’s a very similar core competency on the R&D side,” says Litle. “We want to keep that tight so then it’s about managing complexity and different markets from that beachhead.”

Litle also drew parallels between the two startups: not accepting the status quo of things. “Where Granular took a leap of faith was to say that farmers will stop using pen & paper in favor of cloud software in five to 10 years because it’s so easy and makes life better. That was controversial but [there was] the willingness of the team to stick their neck out and create that future that the rest of the industry drafted into.” What Sound Agriculture is doing in the biologicals space is similar and will ultimately be better for the bottom line than the continued chemical approach, in the long run, he adds.

Additional reporting by Louisa Burwood-Taylor

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