By Lynda Kiernan, Global AgInvesting Media

Australian early stage agtech investor Tenacious Ventures has made its first investment by co-leading an $8 million Series A for Goterra, a waste management startup that uses maggots in robot-automated systems to convert food waste into fertilizer and animal feed. 

Grok Ventures, the investment fund of Atlassian billionaire Mike Cannon-Brookes, was the co-leader of this round, which also included new investor Eleanor Venture and existing investors CAGES Foundation, Giant Leap, and Rampersand.

Goterra was founded by Olympia Yarger with the mission to change the way waste is managed by offering a streamlined approach to a complicated challenge. Having worked with cattle and sheep, Yarger had ambitions to break into farming, however, when costs proved prohibitive, she turned to maggots.

Yarger developed a tech-enabled solution, creating a closed-loop system that uses robot-controlled modular capsules to house a fully-automated process by which maggots decompose food waste into high quality fertilizer, while the maggots themselves eventually become high-protein animal feed. 

“The use of insects as [a] feed source is not new,” said Yarger in an interview in October 2019. “Asian nations have been doing this for centuries. What is new, and what Goterra does differently, is think about how we can get robots to manage waste, or get insects to do jobs.”

These low-impact  capsules provide a rapid on-site solution for hospitals, food supply chains, venues, and hospitality clients, among others, that cuts CO2 emissions from food waste decomposition by 98 percent per ton and generates a stronger ROI compared to traditional systems. 

“Let’s be honest,” said Yarger, “…waste is way more difficult than we’ve ever given it credit for. It’s a big challenge and there are exponentially increasing issues with emissions, build up, hygiene, and maintenance. Every industry that produces waste has been pressing up against the limits of current systems for a while now, and the demand is here for a stronger alternative in the marketplace that is more agile in its application than capex-intensive, centralised solutions. Goterra is already delivering that alternative.”

Food waste accounts for 18 percent of cropland, 19 percent of all fertilizer, and 21 percent of freshwater, as well as 21 percent by volume in landfills, according to ReFED, a multi-stakeholder, non-profit comprised of influential leading business, foundation, non-profit, and government leaders committed to reducing food waste. 

The financial burden generated by food waste, largely shouldered by consumers, is also astounding – costs totaling $218 billion, of which $144 billion fall squarely in homes are the result. And not only is this food waste costly to humans, it also inflicts a heavy toll on the environment, releasing an estimated 3.3 billion tons of CO2 equivalent from decomposition in landfills. 

Yarger and her startup caught the attention of Matthew Pryor and Sarah Nolet, co-founders and general partners of Tenacious Ventures, Australia’s first dedicated agrifood tech VC firm. 

Tenacious was launched with a mission to invest in early-stage agrifood tech companies with bold founders committed to solving some of our most challenging issues through technology and transformational insight. The firm closed on A$20 million earlier this year toward its goal of A$30 million to create a profitable agricultural system that is carbon neutral, climate resilient, and enables farmers to proactively respond to consumer needs. 

“We are thrilled that Goterra is our first investment, reinforcing our thesis that solving today’s most pressing challenges will require novel business models and world class founders like Olympia who truly know the industry,” said Nolet.

Two of Tenacious Ventures’ cornerstone investors are the Clean Energy Finance Corporation (CEFC), which invests in clean energy on behalf of the Australian government, and Cannon-Brookes’ Grok Ventures, who together invested A$16 million in the fund in Q4 2019. 

“As a major food exporter Australia has an opportunity to be at the forefront of innovative technology solutions that can address these challenges,” said Ian Learmonth, CEO, CEFC. “With this investment, the CEFC is supporting an exciting Australian industry of the future with the potential to make a meaningful contribution to lowering global emissions while supporting our agriculture sector.”

Mike Cannon-Brookes added, “Innovation in agriculture is desperately needed across the world to make our planet more sustainable… There’s no doubt that new ideas in agriculture will play a massive role in reducing carbon emissions, while also delivering return on investment. The upside for Australia’s economy is also huge.”

“Sarah and Matt have a solid track record of finding those new ideas,” continued Cannon-Brookes, “…and then making them work. I can’t wait to see the innovation in food tech and agriculture that they deliver.”

 

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.