In Canada, Agrisoma Biosciences closed its $15.4 MM Series B financing round, co-led by new investor Groupe Lune Rouge and current investors Cycle Capital Management, and BDC Venture Capital. This Series B round is used to support the global expansion of Agrisoma’s business.
The company raised $8 million in its Series A investment round in 2014. That round was led by Cycle Capital Management and included participation of BDC Venture Capital. In April 2015, we reported a group led by its management team made an equity investment in the company that gave it a 22 percent stake in the company. The group includes key members of Agrisoma’s senior management, board members and advisors.
Agrisoma Biosciences management acquires 22% stake via equity investment
The Carinata backstory
Resonance Carinata is certified sustainable by the Roundtable on Sustainable Biomaterials — one of only four crops in the world to achieve that status. Resonance Carinata meal has recently received regulatory approval as an animal feed, further underscoring the value of this crop to meet the increasing demand for renewable fuel and providing meal for the production of livestock. Additionally, Resonance Carinata is grown on semi-arid farmland, creating new economic and production opportunities for growers.
Agrisoma expansion
As CEO Steve Fabijanski noted, the investment round is about expansion, both in scale and geographic footprint, and with Latin America in mind. “The Series B funding was used,” he commented, “to develop and execute our new commercial programs in South America, as well as to initiate deliveries of commercial scale volumes of Carinata feedstock to new customers around the world.”
The feed co-product is in focus, too. “The funding was also used to develop key markets for the non-GMO, sustainable animal feed co-product,” Fabijanski elaborated, “positioning the Carinata business for rapid expansion and scaling of production servicing both the biofuels industry and the growing demand for sustainably produced protein in the animal feed industry.
Not every Agrisoma is quite yet lit green for “expand rapidly”. We reported in May 2016 that Agrisoma was able to supply European demand for carinata oil as a feedstock for HVO through farmer contracts in the Southeastern US but it doesn’t yet need to scale up to Western Canada, North Dakota or Montana this as demand hasn’t picked up enough. The company is also talking to farmers in Brazil and Uruguay to scale up production later on but it says a slowdown in capital investment for biofuel production is tempering plans for expansion.
Agrisoma doesn’t yet need Plains farmers to producer carinata
Agrisoma yields and grower income
The company had commenced expansion to North Dakota in 2015, contracting for 6,000 acres, which yielded an average of 30 bushels per acre.
Overall, the company expected 2016 production to finish up at 10,000 tons — and expansion is in the cards for 2017.
Statistics Canada reported a 10-year average yield (in Western Canada) of 27 bushels per acre — but that data is now more than 10 years old. More recently, North Dakota canola averaged 31.6 bushels per acre in 2016. The crop has been selling in the $8.50-$13.50 per bushel range.
North Dakota Canola Variety Trial Results for 2016 and Selection Guide
Carinata sells for about the same price as canola but the seeds are cheaper, providing lower cost of production at the same income levels farmers are accustomed to getting for including canola in their rotations.
The investors
Very much a Canadian group.
The least known in industrial biotech circles is Lune Rouge — founded by Quebec visionary and philanthropist, Guy Laliberté, it is developing in-house projects and is also investing in companies in technology, entertainment, arts and real estate as well as in initiatives that have a positive social impact. Both BDC and Cycle Capital Management are well-known Canadian venture funds active in energy/cleantech.
Catherine Vu, CFO at Groupe Lune Rouge has joined the Board of Directors at Agrisoma, concurrent with the closing. Having spent most of her career at Cirque du Soleil in Corporate Finance and Investments, she brings deep expertise in financing, operations and management of global businesses.
The aviation angle
“Agrisoma represents the future of the aviation industry,” says Andrée-Lise Méthot, Cycle Capital Management Managing Partner and founder. “By growing Carinata and producing oil for bio jet fuel, it demonstrates how a technology-based company can have a global impact by reducing GHG emissions in an industry known for its significant carbon footprint. Cycle Capital is very proud to be part of this green revolution.”
Why aviation? Frankly, the airlines want no part of traditional food feedstocks such as corn and soybeans — leery of getting enmeshed in a food vs fuel debate. But waste feedstocks such as used cooking oil are limited in volume, and pricey. So, dedicated energy crops are a preferred approach — even though Agrisoma has also been gaining on approval of carinata meal.
The Multi-Slide Guide
The Carinata Kings: The Digest’s 2017 8-Slide Guide to Agrisoma