Phosphorus is a key element for plant growth and a critical piece of modern agriculture. But excessive use is hazardous to the environment, contributing to greenhouse gas emissions and waterway pollution. Supply chain disruptions, war and other factors are also making phosphorus fertilizers harder for farmers to obtain.
Enter Phospholutions, a US-based agtech company that wants to promote more efficient phosphorus fertilizer usage with its fertilizer additive that improves phosphorus delivery to plants.
The company has just raised a $5.3 convertible note to commercialize its additive, RhizoSorb, in the US row-crop market. Ospraie Ag Sciences, Bunge Ventures, the for-profit, global investment arm of Bunge, and crop protection company UPL Ltd participated in the investment, which will be convertible in Phospholuthions’ forthcoming Series B round.
On background
Phosphate fertilizers are highly inefficient, says Phospholutions founder and CEO Hunter Swisher. Only about 10% to 30% of the conventional forms we apply to crops get taken up by the plants in that first year. “The rest remains in the soil, tied up in a very unavailable form, or gets lost in our waterways,” leading to pollution and degraded water quality, he told AFN.
Phospholutions’ RhizoSorb additive can be applied with phosphate or added to phosphate fertilizers during the manufacturing process. The additive can help farmers reduce phosphorus fertilizer applications by 50% without compromising crop yield, according to the company.
So far, RhizoSorb has been tested on a variety of crops including corn, soybean, wheat, barley, sunflower, chickpea, rice and turfgrass. Swisher told AFN that since the company is chiefly concerned with addressing the phosphorus issue on a global scale, it is focusing first on making the technology work for large commodities like corn.
In 2021, Phospholutions expanded its field trial with St. Louis-based digital ag company IN10T to include 12 US states, bringing its total number of state trials to 14.
The company says it also tripled in size last year thanks to a $10.3 million Series A investment led by the Continental Grain Company’s CGC Ventures.
Why it matters
“Our solution is to help reduce the unnecessary over-application of fertilizer that leads to added expense or input costs and that really isn’t needed to achieve the same yields,” Swisher says.
It’s a timely benefit to offer, given the soaring cost of fertilizer. Phospholutions is one of a number of companies developing fertilizer additives or alternatives that can reduce some of Big Ag’s reliance phosphate, nitrogen and other chemical inputs.
Apart from immediate price volatility, new ag-inputs are necessary for both environmental reasons and because phosphate is also a finite resource. Some reserves may have only a few decades of mining remaining, says Swisher. “We [enable] these global ag companies and fertilizer manufacturers to take half [their normal] amount of fertilizer and service the same number of acres.”
What’s next
“We decided to raise $3 million to get us through the end of the year and ended up actually oversubscribed and raised almost 5.5 million instead,” Swisher says of the recent financing.
The company hasn’t begun working on its Series B round yet, but Swisher isn’t concerned about the current downturn in tech financing that’s impacting many startups.
“The second-largest nutrient needed for food production [aka phosphorus] isn’t going anywhere, and inefficiency [of fertilizer use] is something that’s worldwide,” says Swisher. “In terms of the macro climate right now and current fertilizer prices, I think there’s never been a better tailwind. It’s actually a strength for us right now to be raising.”
“In general, I think the thesis behind our businesses is not going anywhere long term and we still need to manage these resources more efficiently, regardless of the VC climate,” he adds.
Phospholutions will continue its partnership with IN10T, expanding its field trial to reach up to 130 additional corn fields in the US in 2022.
Additionally, the company will add New Zealand to its list of global RhizoSorb trial locations planned for this year. That list also includes Canada, Turkey, India, Brazil, and parts of Africa.
Source: https://agfundernews.com