US-headquartered environmental nonprofit The Nature Conservancy (TNC) has invested in five agrifoodtech startups, it announced today.
“We’ve been working around initiatives to rebuild soil health in North America aggressively since 2016 and [we want] to move the needle on 50% of US cropland and put it under adaptive soil health systems by 2025,” TNC director of agriculture innovation Renée Vassilos told AFN.
“This is the first time we are looking for technology and innovation solutions in support of that goal.”
However, TNC still has some way to go to meet its “audacious” target, as Vassilos puts it. Work is being done directly with farmers, through agronomics, at the policy level, and by building the economic case for soil health; but traction is still slow when it comes to the adoption of soil-focused ag practices.
“We realized that if we didn’t start thinking outside the box and going after innovation and technology solutions, then we would never get there,” Vassilos said.
“And then, we weren’t seeing the tools that farmers needed necessarily getting backing. So we felt it would be particularly impactful for us to actually be sitting at the investor table and looking at investments using an impact filter.”
Selecting startups is one of the trickiest tasks for investors, accelerators, and incubators. To make the process more manageable, TNC worked with iSelect, a St Louis-based venture fund manager focussing on critical global issues, to identify companies that met its requirements. It then made an undisclosed investment in each of the five they picked through the iSelect Fund.
Analyzing over 100 startups, TNC sought out teams that can scale the regenerative ag practices that it has identified as building soil health. Those practices include cover cropping, no-till drilling, increasing rotations, and input optimization.
The final cohort of five startups which recevied funding from TNC demonstrates the diverse opportunity that exists to help farmers with soil health practices, Vassilos said.
- Growers Edge: A fintech company that is hoping to deliver farm enterprise income assurance through data-driven products and tools. It aims to reduce the financial exposure for farm operations adopting new tech or practices through warranty-backed crop plans and financing solutions. US-based Growers Edge raised $40 million in Series B funding from investors including Cox Enterprises and Bunge in July 2020.
- Kula Bio: This US firm is developing a biological nitrogen fertilizer that minimizes run-off. As an alternative, or partial replacement, for synthetic nitrogen fertilizer it has the potential for significant positive impact for farm profitability and the environment. [Disclosure: Kula Bio has received investment from AgFunder, which is AFN‘s parent company.]
- PatternAg: This US company provides soil microbiome analysis and recommendations for farm input optimization, and is focussed on specific pest and disease pressures faced by corn and soybean farmers. PatternAg raised $15 million in an October 2020 funding round.
- Stony Creek Colors: Based in the US, Stony Creek Colors is developing sustainable, plant-based dyes for the textile, cosmetics, and food markets. It works directly with growers to bring greater profitability and improve soil health with an alternative row crop to help farmers diversify crop rotations. This month, it raised $9 million in a Series B round led by Lewis & Clark Agrifood.
- SwarmFarm: This Australian startup builds farming robots and autonomous vehicles that enable precise and effective application of nutrient and crop-protection inputs, allowing for optimized herbicide and fertilizer application that reduces their negative environmental impact. It raised $3.2 million from Tenacious Ventures, Artesian, and others in October 2020.
TNC has the capacity to invest in four to five additional companies, Vassilos said. There are a few areas of technology that she would like to see added to the mix, including creative equipment solutions to help farmers plant their cash and cover crops more efficiently, and increased innovation around alternative crops used as covers.
“We are exploring what catalytic capital and innovation might mean for other ‘foodscapes’ around the globe,” she said.
“The US has a robust venture community, but it is also kind of unique. Venture capital may not make the most sense in other communities.”
Some of TNC’s other soil health initiatives include its reThink Soil report, as well as its work with agribusiness giant Cargill to support Nebraska farmers in adopting greenhouse gas-mitigating soil health practices through the BeefUp Sustainability program.