Australian start-up Loam Bio has developed a microbial seed coating that is able to enhance a plant’s natural ability to store carbon in the soil by harnessing the power of natural endophyte fungi. This week the firm has secured US$72.5 million (A$105mn) in a Series B round co-led by Lowercarbon Capital and Wollemi Capital.
The raise coincides with news that Loam Bio has locally rolled out its CarbonBuilder seed inoculum, which works from the root of a canola crop to draw down carbon from the atmosphere and store it stably within soil.
Loam Bio’s carbon sequestration goals
Founded in 2019 by Guy Hudson, Tegan Nock, Mick Wettenhall and Guy Webb, Loam Bio has dozens of staff working across four laboratories in Australia and the US. The firm’s technology has been designed to increase the amount of CO2 stored within micro-aggregates – a structure in soil comprising of mineral, organic and biotic materials – for the long term. Specifically, Loam Bio’s products will help plants to store recalcitrant carbon in the soil for many thousands of years.
“The reality is carbon has been slowly declining in cropping soil globally, to around 60 per cent since the start of industrial agriculture. Loam now provides a solution to reverse that,” said Loam Co-founder and Global Head of Agronomy Guy Webb.
Fellow founder Guy Hudson added “This year we’re moving from pre-commercial to commercial and launching our products in Australia, working with a limited number of farmers to help them gain value from our products and services in Australia,”
“We’re moving towards commercialisation in the US, which will come in 2024, followed by our expansion into Brazil to help farmers globally access value from carbon markets.”
Co-founder Tegan Nock (proving you don’t have to be called ‘Guy’ to be a founder at Loam Bio) said she was excited to commercially launch the technology and get it into the hands of farmers. “Loam’s CarbonBuilder is the first of its kind. A simple product that farmers can apply in the agricultural system enabling them to capture CO2 from the atmosphere and store it stably in soil,” said Nock, adding “There’s not been a technology like it in the marketplace before, and it presents a unique value proposition for farmers.”
Formerly known as Soil Carbon Company, Loam Bio raised US$30 million 18 months ago with backing from Shopify founder Tobi Lütke and TIME Ventures – a venture capital fund run by Salesforce CEO and founder Marc Benioff, as well as existing investors Grok Ventures, the CEFC and Main Sequence.
This latest raise was also backed by Horizons Ventures, Acre Venture partners, Main Sequence, Grok Ventures and the Clean Energy Finance Corporation (CEFC) – a government-owned green bank that committed A$9 million to the round.
What are Endophytes?
Endophytes are microorganisms that live inside plant tissues without causing any apparent harm to the host plant. They can be bacteria, fungi, or other microbes. Endophytes have been found in virtually every plant species studied to date, and they can have a variety of beneficial effects on their host plants.
Some of the functions that endophytes can perform include:
- Protection: Endophytes can produce natural antibiotics and other compounds that can help to protect their host plants from diseases and pests.
- Growth promotion: Endophytes can help to promote plant growth and development by producing plant growth regulators and other compounds that can enhance nutrient uptake and improve stress tolerance.
- Environmental adaptation: Endophytes can help their host plants to adapt to different environmental conditions by producing compounds that protect against drought, salinity, and other stresses.
- Mutualism: Endophytes can have a mutualistic relationship with their host plants, providing them with beneficial services in exchange for nutrients and shelter.
Overall, endophytes are an important component of plant-microbe interactions and have the potential to play a significant role in agriculture and biotechnology.
Loam Bio is specifically coating seeds with an endophytic fungus that helps with soil carbon sequestration. As the resulting plants soak up CO2 from the atmosphere they produce sugars in the soil through photosynthesis, the endophyte fungi convert these sugars into melanin – a complex and longer-lasting carbon compound.
