August 30, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

There are multiple types of “good” fungi that establish relationships with plants that are mutually beneficial – these relationships are called mycorrhizae, and the microorganisms are called mycorrhizal fungi. However, over time these naturally occurring and beneficial microbes have been destroyed by modern farming practices including tilling, pasteurization, and over fertilization. 

Israel’s Groundwork BioAg manufactures mycorrhizal inoculants, which are made through a natural symbiosis between fungi (myco-) and plant roots (-rhiza). These mycorrhizae are a cornerstone of regenerative agriculture – used agriculturally to improve nutrient uptake in crops, increase yields, reduce fertilizer inputs, increase soil carbon sequestration, and reduce harmful soil-borne pathogens.

To accomplish this, these specialized fungi use mycelium, or long, microscopic filaments called hyphae, to extend a plant’s root system up to 100 times the plant’s original root itself – this allows for greater absorption of nutrients and water, while improving soil health.

Markus Solibieda, managing director at BASF Venture Capital GmbH, noted, “AgTech is one of our key global investment priorities. Groundwork BioAg’s founders have developed a highly effective product for widespread use in agriculture that can substantially reduce fertilizer dependency by making phosphorus available to the plant roots. Furthermore, it has the potential to convert and store CO2.”

Following years of research and product development, Groundwork BioAg is the first company to unlock the ability to mass produce high concentrated, cost-effective mycorrhizal inoculants, and born of this ability, has established commercial operations throughout the world’s breadbasket regions including the U.S., Brazil, China, India, Canada, Ukraine, and countries in Europe, Asia, and Africa.

Dr. Yossi Kofman, co-founder and CEO of Groundwork BioAg, noted, “Building upon our proven science and trusted network of distributors, Groundwork BioAg’s Mycorrhizal BioPlatform, which delivers ROI to both conventional and regenerative farmers while permanently sequestering carbon in their fields, is uniquely positioned to help farmers around the world manage mounting economic and environmental pressures.”

In support of Groundwork Bioag’s work improving the efficiency of major crop production of corn, soybeans, grains, fruit, and vegetables, Climate Innovation Capital has led an $18 million Series B for the company that also included HSBC Asset Management, BASF Venture Capital and climate-focused fund Edaphon, along with individual investor John Abele, co-founder and former CEO of Boston Scientific, and all previous investors in the company, including MoreVC, Middleland Capital, and Ibex Investors.

This round follows Groundwork BioAg’s $11 million fundraising in May 2021, demonstrating the demand that exists for biologicals that increase yields while also mitigate carbon, provide sequestration, and offer regenerative solutions. 

“We search for commercial solutions that can deliver the greatest amount of decarbonization in the shortest period of time, and Groundwork BioAg fits that profile squarely,” said Nelson Switzer, co-founder and managing partner, ClimateIC. “Groundwork BioAg has the technology, team, expertise and network to help farmers leverage a cost-effective solution to reduce fertilizer use, increase crop yield, and restore soil health while mitigating and sequestering an extraordinary measure of carbon.”

And because Groundwork BioAg’s Mycorrhizal BioPlatform is based on naturally robust strains of mycorrhizal fungi that are symbiotic with 90 percent of plant species, the company’s products can easily be integrated into local planting regimes and fertility programs.

Reflecting on what drives investors to commit to businesses such as Groundwork, Idan Mor, iInvestment director, Climate Technology Ventures, HSBC Asset Management, concluded, “As demand for nature-based climate solutions accelerates, investing in businesses with a strong potential climate impact is aligned with our sustainability goals.”

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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