July 10, 2017

Spokane-based, family-owned Cowles Company has led a $6.95 million funding round for agricultural biotechnology company, Phytelligence. The round also included WRF Capital, and is the first closing toward a potential $16 million Series B.

Seattle-based Phytelligence, which was founded in 2012 when it was launched out of Washington State University by Dr. Amit Dhingra, Associate Professor of Horticulture Genomics and Biotechnology Research, is the developer of MultiPHY™- a proprietary, non-GMO method of growing crops including apples, cherries, peaches, pears, grapes, hops, berries, and nuts up to five times faster than traditional methods while using fewer inputs. The company also provides genetic analysis services to growers who wish to confirm existing varieties or patent new ones, and repository services to growers who are looking to store their plant material in a sterile environment, according to the company’s website.

The rootstock produced by Phytelligence is confirmed to be free of viruses, is genetically confirmed to be the proper variety, and have less than a 1 percent mortality rate compared to common mortality rates of between 10 and 40 percent. The MultiPHY tissue culture process enables Phytelligence to supply nurseries and agricultural producers with higher quality plants at a lower cost at a rate that enables farmers to scale up production of new varieties at a faster pace.

“The decision to invest in Phytelligence was an easy one to make once we saw the tremendous gap between the current nursery capabilities and the needs of the modern grower,” stated Steve Rector, CFO of Cowles Company. “The current system of providing plants to growers is antiquated and simply can’t keep up with the changing customer preferences the growers are trying to satisfy. Phytelligence has the technology, the capacity and the expertise needed to completely revolutionize the food crop industry. We look forward to being a part of that mission.”

Investment Potential

Agricultural and alternative investors are beginning to realize the potential for disruption, the need for innovation, and potential for return on investment in tissue culture and the production and commercialization of crop stock. In December 2016, Bahrain-based alternative investment manager, Investcorp, announced it has completed the acquisition of a majority stake in Agromillora Group – a leader in the production and commercialization of permanent crop stock

Since its founding in Barcelona in 1986, Agromillora has expanded its operations across North America, Latin America, Australia, and the Middle East, and has diversified its portfolio of plants through tissue-culture propagation, developing rootstocks for high-density planting scenarios.

Phytelligence currently has a tissue culture lab in Portland, Oregon, an R&D facility in Pullman, Washington, and greenhouse space in Burien, Washington, through which the company uses advanced genetic applications to deliver value addition to growers by providing accurate trees and plants, screening services for disease, securing intellectual property, and co-developing new food crop varieties.

Since the new management team was put in place in 2015, the company has seen significant growth, expanding its team from 12 to 70 full-time employees. However, it plans to use the capital gained from this round to further expand its footprint and capabilities.

“The success of our company validates the demand for our proprietary technology and the need for a change in the current nursery system,” said Ken Hunt, CEO, Phytelligence. “We’re looking forward to expanding our footprint and providing growers with the highest quality, true-to-type plant material and compound solutions for agronomic and consumer benefit.”

The closing of this $6.95 million indicates the potential for an additional $9 million in funding to be made available to the company on August 4 of this year, making for a total raising of $16 million – the largest funding round for the company to date.

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.