Kitchener-Waterloo-based AgTech startup Ceragen has secured $2.7 million CAD ($2 million USD) in seed funding to grow its portfolio of “probiotics for plants” products and operations.
Ceragen develops soil microbes to help greenhouse growers boost fruit and vegetable production.
“These are plant growth-promoting microbes that are supplied to the roots of plants to help increase crop yields,” Ceragen co-founder and CEO Danielle Rose told BetaKit in an exclusive interview.
Ceragen plans to use some of this capital to fuel its expansion into Mexico and the Netherlands.
The startup currently has one product on the market for lettuce and one for tomato plants, with commercial pilots underway in Canada and the United States. Ceragen plans to use this capital to develop offerings for cucumbers and strawberries at a new 5,000-square-foot Kitchener facility and support its expansion into Mexico and the Netherlands.
Ceragen’s seed round was led by Colorado-based existing investor the 1517 Fund and New York’s Divergent Capital, with support from fellow new backer, Germany’s Ajira Ventures.
Half of this capital consisted of two new simple agreement for future equity (SAFE) financings from 1517 and Ajira. The rest was equity capital from Divergent. This brings Ceragen’s total funding to $4.8 million CAD ($3.5 million USD) from a group including the University of Waterloo-backed Velocity Fund and the Ontario Centre of Innovation.
Most greenhouses use water-based hydroponic systems to grow crops, but these systems may not include the bacteria and fungi found in healthy agricultural soils that help plants process nutrients, respond to environmental stresses, and combat pathogens, Ceragen said.
Founded in 2021 by Danielle Rose and her brother, CTO Matthew Rose, Ceragen aims to optimize greenhouse fruit and vegetable production by bringing “the natural healthy microbiome” present in soil systems “into soil-less agriculture.”
Ceragen aims to make it possible for greenhouse growers to produce more food using the same heating, gas, electricity, and land inputs.
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The startup aims to do this at a time when climate change has created new challenges to growing fruits and vegetables.
“It is getting harder to produce food in fields,” said Danielle Rose. “We’re seeing increasing disease pressure, we’re seeing increased pest pressure, we’re seeing erratic weather conditions, heat waves, floods, [and] climate shifts … every year this gets worse, and every year, we’re going to see more and more impact on our food supply.”
According to Danielle Rose, today, most tomatoes, cucumbers, and peppers purchased in Canadian grocery stores are already grown in greenhouses across the country, and she expects to see a greater share of fruits and vegetables being produced in greenhouses as global temperatures continue to rise alongside food demands as the population grows.
The company has been based at the University of Waterloo’s Velocity incubator for the past three years. This summer, Ceragen plans to move out of the startup hub and into a facility of its own in Kitchener that will give it the space it requires to research, develop, and produce new products.
CORRECTION (07/16/24): A previous version of this story incorrectly stated that Ajira provided equity capital alongside Divergent. The article has been updated to clarify that Ajira contributed towards the SAFE portion of Ceragen’s financing.
Feature image courtesy Ceragen.