Welcome to Q4. As usual, I’ve dug through my last three months of emails and bookmarked articles to synthesize what happened in the food and ag startup world over the previous quarter.
Gotham Greens raised $310 million to build greenhouses across the United States. Switzerland’s Planted cashed $72 million to launch whole-cut vegan chicken breasts and regenerative companies such as Yard Stick and ReGrow have benefitted from the United States Department of Agriculture’s (USDA) Partnerships for Climate-Smart Commodities initiative.
Instead of giving a detailed rundown of the largest deals in those sectors, I’m picking up two recent developments in sub-sectors that I’ve written about less but merit attention.
Mushrooms are awesome. I love eating them, seeing them sprout in random places after a rainshower and reading about their magical underground networks supporting vibrant forests. In my view, mushrooms are already phenomenal, and still, an increasing number of startups are trying to build on one of nature's greatest inventions.
A popular startup venture is the mushroom-to-meat pipeline. Innovators use mycelium, the root-like structure from which fungi grow, to develop plant-based proteins that have a similar structure and texture to meat. MyForest Foods opened a new vertical farm in Green Island, N.Y., that can produce nearly 3 million pounds of its mycelium-based bacon per year. Colorado-based Meati Foods closed a $150 million Series C to expand its sales and launched in retail stores this summer. Meati replicates whole-cut meats such as cutlets and steaks — a holy grail the industry needs to crack to compete with meat consumption.
Will these mushroom meat newcomers be able to capture a more health and natural-focused consumer segment for plant-based foods?
Over in Europe, Meati’s competitor Adamo Foods raised $650,000 to hone its proprietary fermentation process that also aims to produce whole-cut steaks from mycelium. And Mushlabs announced a partnership with Bitburger Brewery Group, one of Germany’s largest beer manufacturers, to upcycle byproducts from its beer production to protein.
The promise of this rapidly growing alternative protein sub-sector is to create a more natural offering with better taste, texture and a cleaner ingredient label compared to the engineered products from Impossible and Beyond that currently dominate the market. I haven’t tried enough of them to get a good sense of how good the mycelium-based products are or could be. But based on increasing worries about a plateauing plant-based market, I’m curious to see whether these newcomers will be able to capture a more health and natural-focused consumer segment.
Going back to nature’s original version of the product that perhaps merits the biggest hype, I was excited to see Brussels-based Eclo raise $4.6 million to scale its production. Eclo upcycles brewery and bread waste into a substrate that can grow exotic mushrooms and microgreens in urban farms. I’d love to have one of those in my neighborhood.
Fresh fertilizer formulas
Fertilizers have come under sharper focus this year as Russia’s war in Ukraine interrupted global supply chains of traditional fertilizers such as potash, urea and ammonia — and prices subsequently spiked.
Investors and startups reacted, supporting alternative solutions. Aqua-Yield cashed in a $23 million Series A to scale its "nanoliquid" technology. The product helps plants better absorb liquid inputs such as fertilizers, herbicides and pesticides. According to the startup, the innovation allows farmers to cut their inputs by 25 to 50 percent without sacrificing yield.
In San Francisco, Nitricity has developed a technology that produces nitrogen fertilizer from only air, water and renewable energy and raised $20.8 million. It promises to decentralize and electrify nitrogen production and operates two pilot facilities in California.
Pivot Bio also delivered an innovation on the nitrogen front. It launched a new class of nitrogen fertilizer that’s added directly onto the seed before farmers purchase them. According to the startup, this innovation leads to more efficient applications and healthier, more resilient crops. It could help farmers worldwide move away from synthetic nitrogen fertilizers that often leak into the surrounding environment.
In a circular move, Finnish cleantech startup Tracegrow derives certified organic fertilizer from used alkaline batteries. It welcomed an undisclosed funding round from Nordic Food Tech VC this summer. The circular innovation will feed right into the EU’s strategy to increase organic production.
I’m excited to see these new fertilizers originate from such different starting points and believe we’ll see a much bigger focus on this sector in the coming years, especially as a more holistic approach to cultivating healthy soils is gaining ground via the regenerative agriculture movement.