March 28, 2017

Inocucor Technologies, a Montreal-based producer of sustainable microbial crop accelerators, announced the finalization of a C$38.8 million (US$29 million) Series B led by TPG Alternative and Renewable Technologies (TPG ART) – a late stage, growth equity venture vehicle managed by alternative asset firm TPG.

Other investors included in this first Series B round are Closed Loop Capital – a venture capital firm focused on early stage funding of agtech and food system innovations; Desjardins Innovatech, the venture capital unit of Desjardins, one of the top cooperative financial groups in Canada with more than $200 billion in assets, and Montreal-based Cycle Capital Management – a clean tech venture capital firm that has been an early investor in Inocucor since 2013.

Inocucor uses technology similar to that used in winemaking, incorporating multiple strains of yeast and bacteria to produce biological solutions that improve seed germination, shorten necessary growing time, and improve crop yield through the building of healthier soil.

At the turn of the year, Inocucor received approval from the Canadian Food Inspection Agency to register Synergro™ and Synergro Free™ – two biological products in the company’s pipeline, after two years of working with the agency. At the time, Inocucor was in the process of raising a Series B that was expected to be between $10 million and $12 million.

This larger-than-expected Series B follows not long after Inocucor announced the completion of an extended Series A in June 2016 following the addition of $6 million into a new round that included Cycle Capital Management; Desjardins Innovatech; Michigan-based family-run office Red Metal Capital; and Philadelphia-based early stage agtech and food fund Closed Loop Capital.

Products

Synergro™ is a U.S. rebranding of Inocucor’s flagship product, Garden Solution®,  and is a live cell formulation of Inocucor’s patented fermentation technology used to boost production of high-value produce such as tomatoes, peppers, squash, strawberries, broccoli, and melons, among other crops.

Initially, the product was introduced to organic growers of high-value produce. “They’re the fastest to adopt a new product and they understand microbial-based biologicals,” Donald Marvin, Inocucor president and CEO told GAI News in January.  “Plus, they have limited tools in their toolbox to treat crops because they are organic farmers,” adding that when conventional growers began noticing the yield pops among their organic peers they too started asking for the product. “Now Synergro is used by both organic growers and traditional growers alike,” he said.

Synergro Free™ is a commercial bio-fertilizer with the microbes removed, that is added to existing nutrient products as a biological additive designed to boost plant growth and to increase yields of crops such as corn, wheat, cotton, and soybeans.

Both products are the first microbials of their kind to be granted registration in Canada, while in the U.S, Synergro™ is national OMRI-listed, and OIM-listed in the state of California for organic production. Synergro™ is approved and registered for use in 22 U.S. states, and Synergro Free™ is registered in 16 U.S. states.

“With these approvals, we can move forward with the commercialization of the company’s Synergro Free product targeting commodity row crops this coming growing season,” Marvin told GAI News in January. “Synergro, our product for high-value produce, we can begin selling immediately,” adding that the company has back orders to fill.

Growth Through Expansion

The funds from this Series B will be allocated toward supporting the opening of Inocucor’s U.S. headquarters and commercialization office, lifting the company’s production capacity at its pilot production and R&D facility in Montreal, and expanding the company’s team in a way that would strengthen its managerial and scientific expertise.

However, Inocucor also has an eye abroad, as is evident through its dynamic plans for expansion into South America and Europe.

“Our corporate strategy includes staking our claim as a market leader in this emerging segment by growing organically with our own proprietary microbial consortia technology while also pursuing strategic acquisitions and product development partnerships in North America, Latin America and Western Europe,” Marvin said in a recent press release announcing the successful Series B.

“Between Argentina, Brazil, and the U.S., those three countries supply 85 percent of soybean demand around the world. A lot is going on in the soybean area for us,” Marvin told GAI News, adding that the company’s Western Europe expansion is expected to be in Spain’s high-value produce market. “Bio-stimulants are well accepted and adapted in Western Europe and also heavily used in Spain’s high-value produce growing regions,” he noted.

This adoption is being driven in part by independent studies that show Synergro™ increasing strawberry yields by as much as 30 percent or more, and Synergro™-based treatments showing increases in yields of between the high single digits up to between 40 and 50 percent for other high value crops.

For this coming year, Inocucor is currently organizing both internal and external field trials based on data gathered through crop field trials conducted in partnership with commercial partners located in both North America and Latin America.

-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.

-Gerelyn Terzo contributed to this article