What happened: Terramera raises US$45m in funding round led by American investors
Why it matters: This follows a new RBC report detailing how Canada could unlock billions more in economic growth with more investments in agricultural technology
Tech firm Terramera Inc. is cleaning up with investment capital following a funding round that has managed to cultivate US$45 million.
The Vancouver-based company has developed technology it says could significantly reduce the amount of chemicals used in agriculture over the next decade.
CEO and founder Karn Manhas told Business in Vancouver the capital investment allows Terramera to commercialize and license its technology at a much greater scale.
“We have the opportunity here to change the paradigm on how agriculture is done,” he said Thursday (September 5), the day the Series B funding round was announced.
Terramera’s flagship chemistry technology, Actigate, can be licensed to producers of both natural and synthetic pesticides.
“It significantly improves the efficiency, and uptake and performance of the active ingredients in crop protection products so that we can get more out of using less,” Manhas said.
“We can increase the performance of the materials we spray on farms while dramatically reducing the amount required and reducing the environmental impact.”
The company’s goal is to reduce synthetic chemicals used in agriculture globally by 80% by 2030.
“Terramera was founded when I was at UBC [University of B.C.] on the argument that natural and organic materials that are used in agriculture and for pest control could never really be scaled widely because they couldn’t be as effective as synthetics,” Manhas said.
“That makes really no sense from a biological or evolutionary standpoint, and we initially tried to deconstruct why that was the case.”
Prior to the company’s founding in 2010, Manhas said scientists did not have access to the technology and tools needed examine immense amounts of data and understand why that was the case.
Since then Terramera has been fusing computational chemistry and biology with artificial intelligence and machine learning to better deconstruct the science.
He said the pesticide industry is aware that regulatory changes and shifts in consumer demand will soon be putting pressure on them to reduce chemical loads, which will open up the market significantly for Terramera in the coming years.
But he added that the agricultural sector has often been a laggard when it comes to technology adoption.
A report released late last month from the Royal Bank of Canada (TSX:RY) revealed that the sector’s GDP output could grow by $11 billion to $51 billion by 2030 if the right investments are made in people, skills and technology.
The report also pointed out a number of deficiencies in technology adoption for the sector, including the fact that Canada’s global share of agricultural technology investments amount to 3.4%.
That’s behind India and Brazil, despite Canada’s more abundant access to land, water and capital.
Terramera currently has about 130 employees spread out between its Vancouver headquarters, a test farm, greenhouses and two labs.
Manhas said the investment capital is also going towards expanding its facilities as it sets out to create more partnerships with manufacturers that would license its chemistry technology.
Ospraie Ag Science LLC led the latest funding round along with previous investor Seed2Growth Ventures.
Both investors are based in the U.S.
Meanwhile, the company announced it was adding longtime Vancouver technology leader Jeff Booth, founder of BuildDirect.com Technologies Inc., as its board chairman while Ospraie Ag Science’s Carl Casale would join as a director.