A capital-raising for Australian agritech hopeful Soil Carbon Company has raised $10 million for the new business and hooked a number of high profile backers, including the investment vehicle of tech billionaire Mike Cannon-Brookes and the federal government’s Clean Energy Finance Corporation.
The Soil Carbon Company (SCC) is behind a microbial treatment for seeds that has the potential to increase the level of organic carbon in soil, enabling it to retain more water and produce more hardy crops, able to withstand extreme weather conditions.
The CEFC said on Thursday that it had tipped $1.7 million into the fundraising – marking its first investment in the sometimes controversial area of biosequestration.
It said the investment, made via its Clean Energy Innovation Fund, aimed to help Soil Carbon Co. to further develop its “exciting biotechnology” with the potential to improve soil health and farm productivity while also reducing atmospheric carbon.
“Australian farmers are keen early adopters of technology and look to science to improve the productivity of their land,” said CEFC chief Ian Learmonth in a statement.
“By increasing the amount of water that can be stored in soil, the SCC technology could significantly bolster crop health and drought resilience.
“Healthier farms are also more valuable farms – by reducing fertiliser use, this technology could also help improve soil health and increase farm value.”
Other investors in $10 million capital raising included Cannon-Brookes’ Grok Ventures and prominent Hong Kong investment group Horizons Ventures, a VC fund backed by Li Ka-shing with early investments in companies like Spotify and Zoom.
The investments follow the November 2019 partnership between Grok Ventures and the CEFC to establish an $8 million cornerstone investment in a new venture capital fund focused on improving the sustainability of Australia’s agricultural sector.
The Tenacious Ventures fund, Australia’s first venture capital firm dedicated to sustainable innovations in the agrifood sector, was set up to seek opportunities to invest in up to 20 early-stage tech start-ups in the agricultural and food supply chains, as RenewEconomy reported here.
It will manage a total of $30 million in funds to serve as venture capital for agricultural businesses that can reduce their emissions and increase climate resilience.
Soil Carbon Co co-founder and CEO Guy Hudson conceded, in a statement, that carbon was difficult to store in soils in the long-term, due to the fact that it naturally reacts with oxygen or water and is released back into the atmosphere.
“Our technology aims to overcome this by storing the carbon in more stable forms,” he said.
As well as working to reduce atmospheric carbon dioxide and increase agricultural productivity, Hudson believes the technology can also offer another revenue stream for farmers through carbon trading.
“Carbon offset trading has the potential to become one of the largest and most important markets in the world. We want to make sure farmers have the tools to add to this market and the platform to benefit from it,” he said.
“To rapidly develop these markets, we need to bring together a cross-industry community with the goal of accelerating our transition to a low carbon economy. That’s why we are so excited to be working with the CEFC.”