A startup born in the lab of University of California, Berkeley, is aiming to replace synthetic fertilizers that contribute to greenhouse gases and so-called 'dead zones' in the ocean.
Pivot Bio's products use microbes to create and feed nitrogen to corn and wheat crops. It said on Monday it has raised $430 million in a funding round led by Silicon Valley venture capital firm DCVC and Singapore's Temasek Holdings, bringing total funding to $600 million.
The company's valuation is now near $2 billion.
"Our pitch to growers today is, instead of spending a dollar on nitrogen fertilizer, spend a dollar on Pivot's nitrogen," said Karsten Temme, Pivot Bio's co-founder and CEO about how their products are already cost competitive.
He said that while synthetic fertilizers have to be separately applied during the growth of the crop, adding to extra labor costs, Pivot's liquid product is applied with the seed at the time of planting and the microbes do the work from there.
That's helped Pivot triple its sales this year, with U.S. corn and wheat farmers using it on millions of acres of fields, said Temme. He declined to give the exact number of acres covered but said this year the acreage was four times larger than last year.
Pivot Bio says its products take microbes that naturally occur in crop soils and use them to convert atmospheric nitrogen into ammonia and feed it to plants, a process that synthetic nitrogen has shut off.
What makes identifying that microbe possible today is cheaper, faster computing power, said Matt Ocko, Co-Managing Partner of DCVC, which was one of the first investors in Pivot Bio. "We don't fund raw science bubbling away on a bench top. We need to see the commercialization path," said Ocko, who has several other deep tech investments that have also been made possible with computing developments.
While synthetic nitrogen was also a breakthrough in science and a profitable business when it was developed over a century ago, it came at a cost to the water, air, and soil, said Ocko.
According to the International Fertilizer Association's 2017 report, about half of the world's synthetic nitrogen is used for fertilizing corn, wheat and rice, a roughly $60 billion market. Pivot is developing a fertilizer product for rice as well.
Crunching numbers from a U.S. Environmental Protection Agency report, Pivot Bio says 7% of greenhouse gases are produced by synthetic nitrogen fertilizer, when considering manufacturing and nitrous oxide emissions from the fertilizers on the farm. Its run-offs have also harmed water supplies.
The new funding will help Pivot Bio expand to other countries as well as continue to improve the efficiency of the liquid microbe products, said Temme.
(Reporting by Jane Lanhee Lee, Editing by Rosalba O'Brien) ((email@example.com; +1-415-344-3912; Reuters Messaging: firstname.lastname@example.org))