By Nick Van Osdol
Earlier this week, I was in a slightly less-than-positive mood. Many folks still talk about holding global warming to 1.
To that end, there were several high-profile investments this week in companies that are doing just that. One of the most significant adaptation needs and opportunities is in food and agriculture. As the world’s climate changes, ensuring food production is minimally disrupted is a paramount concern. Building more resilience can take many forms, whether improving seeds and crop strains or creating entirely new food production environments. Here are deals that caught my eye this week:
- Soli Organic raised $125M in Series D funding to commercialize soil-based, indoor farming facilities
- Inari raised $124M in Series E funding to scale gene editing aimed at enhancing seed diversity
- Switch Bioworks raised $2.3M in additional pre-seed funding for its synthetic biology-based nitrogen biofertilizer
These fundraising rounds run the gamut of adaptive agriculture. On one end of the spectrum, Inari uses its SEEDesign™ platform to engineer and re-engineer seeds, hoping to optimize them further for factors like drought resilience and crop yield. The ‘how’ of their platform wades into synthetic biology, which I’m not the most well-equipped person to cover. The discipline broadly involves designing new and redesigning existing biological entities.
On the other end of the spectrum, Soli Organic deals with constructing controlled environments for seeds to grow in. The company builds indoor facilities that allow for a more controlled growing environment, enabling adoption of more sustainable processes. Indoor farming also hopes to unlock business efficiencies by growing closer to where end-consumption occurs, eliminating emissions and costs from transportation in the process. As a point of differentiation, other indoor growers use hydroponics, while Soli still uses soil.
In the future, with a changing climate, indoor farming may become more critical. For now, plenty of folks have their doubts about the business model; vertical farming has been talked about for a long time, but growing anything is a competitive, low margin business, and many of the first vertical and otherwise innovative indoor farming facilities are still cropping up just now.
The third deal sits between manipulating seeds biologically and building controlled growing environments. Switch Bioworks brings a synthetic biology approach to manufacturing nitrogen fertilizer. The traditional process for creating synthetic nitrogen fertilizer is energy and emissions-intensive and hasn’t changed much in 100 years. On farms, overuse of synthetic fertilizers also drives nitrous oxide emissions, which have a high global warming potential, and leads to nitrogenous runoff that pollutes waterways.
They’re earlier in proving out their process, but Switch Bioworks is a company to keep an eye on. To keep things simple, they aim to genetically reprogram naturally occurring microbes to make a fertilizer that indexes higher on environmental concerns without sacrificing benefits for crop yields.
In case nitrogen fertilizers and synthetic nitrogen fertilizers are foreign to you, they’re the reason the world has been able to support rapid population growth. You can make organic fertilizers from waste, but there usually isn’t enough to create as much fertilizer as farmers need, hence synthetic production techniques. Sans crop yield gains from synthetic fertilizers, half the world wouldn’t have enough to eat. So while they’re not always great for the environment, re-inventing them to be more sustainable is critical, as not using them at all can be catastrophic. As a note, Soli also makes nitrogen fertilizer to valorize organic waste from its facilities, another way to reduce the emissions intensity of fertilizer production.
There’s a decarbonization opportunity inherent to all of these agriculture companies, too. The food & agriculture sector is one in which I see this overlap showing up the most. Making more resilient food and farming practices often drive emissions reductions and environmental benefits in the process. Reducing the intensity of energy needed, land use, or fertilizer required to increase yields makes agriculture processes more resilient and sustainable.
Zooming back out, as adaptive measures across the world become more critical to deal with a changing climate, I also anticipate more niche venture funds to crop up to serve them. Last week we saw Convective Capital raise a $35M fund specifically for wildfire management and mitigation start-ups. Expect to see a lot more granular focus from funds investing in adaptive and preventative tech; there will be no shortages of opportunity.