Australia cleantech start-up secures $7m

Soil Carbon is developing a microbial coating for seeds that could improve the ability of plants to absorb carbon dioxide from the atmosphere and support farm fertility by storing it in the ground. The technology is also hoped to enable soils to retain more water and help crops withstand extreme weather conditions. Further emissions reductions could be achieved if the technology reduces the amount of nitrogenous fertilizer used by farmers.

The Australian government's Clean Energy Finance Corporation (CEFC), which launched a A$1 billion VC fund earlier this year, also participated. It was joined by local VCs Artesian Venture Partners and Grok Ventures, a firm set up by Mike Cannon-Brookes, a co-founder of enterprise technology player Atlassian. Chris Sacca, a US investor known for his early investments in Twitter, Uber, and Instagram, participated via his firm Lowercase Capital.

Much of the plan is based on developing a system that is cheaper than existing carbon capture technology. The company is said to be targeting a rate of less than $20 per ton, which would be around one-fifth the cost of other CO2 capture systems. This would in turn incentivize uptake by farmers and corporations seeking carbon credits, with Australia and the US expected to be the initial target markets. Soil Carbon is currently developing a system in the US that would be suited to local growing conditions.  

"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," Guy Hudson, co-founder and CEO of Soil Carbon, said in a release. "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."

This is CEFC's first investment in bio-sequestration, or natural carbon capture. It typically invests in clean energy and other infrastructure, as well as agribusiness innovation such as green farm vehicles. Last year, it agreed to commit A$100 million to a fund created in partnership with Ironstone Capital. Its Clean Energy Seed Fund is managed by Artesian.

Agriculture-focused Artesian launched a A$50 million fund last year with the government-backed Grains Research & Development Corporation. The vehicle, known as GrainInnovate, invests in grain industry start-ups with a focus on improving operations in genetics, cultivation, and storage. Artesian's Soil Carbon commitment this week coincides with participation in a $3.2 million round for Singapore's TurtleTree Labs, which is developing cell-cultured milk.

Horizons is an active investor in food technology and biomaterials. Portfolio companies include Impossible Foods, a US-based vegetarian meat brand targeting Asia. Previous investments in Australia include Varden, which is developing sustainable food packaging that can replace plastic and aluminum. Last year, Horizons led a $35 million round for V2Food, which provides plant-based meat for Australian fast-food chain Hungry Jacks.

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• Topics
• Australasia
• Cleantech
• Industrials
• Early-stage
• Australia
• Horizons Ventures
• Agriculture