Agriculture technology startup Indigo has raised $100 million in a new round of funding, bringing its total financing to more than $150 million, a sign of growing investor interest in new ways to ease food scarcity.
The $100 million investment led by the Alaska Permanent Fund, a $54.3 billion fund owned and managed by the state of Alaska, is believed to be the largest single financing round into the private ag-tech sector, Indigo said on Thursday.
The $156 million raised by Indigo so far will support the Massachusetts-based company's efforts to create resilient crops that can better withstand water shortages.
Indigo, which declined to give its valuation, restructures seeds by adding microbes to farm crops. This helps crops to be more resistant to insects, drought, severe weather and nutrient-poor soil, the company said.
Microbes are a diverse group of microscopic organisms found in humans, plants and animals, and living everywhere from the surface of rocks to bottom of the ocean. Some cause disease, but others are essential to life - they break down waste, for instance, and help humans digest food and plants grow.
According to Indigo, the microbes in plants have changed as more pesticides have been introduced to agriculture. Indigo has sequenced the genome of more than 40,000 microbes, building a massive database, Chief Executive Officer David Perry told Reuters.
He said the company has identified microbes that may help plants survive more stressed conditions, particularly those brought by climate change.
Indigo has not yet earned any cash from sales of the new technology and the results of its efforts are not yet known.
The company's revenue will come from future payments at harvest, based on a farmer's increased earnings as a result of the higher yield from Indigo's seed technology.
The company's cotton seeds were planted this spring on more than 50,000 acres, primarily in western Texas, Perry said. It is the company's first commercial product.
"Ultimately we will judge our success on the yields at harvest, Perry said.
Trials have shown a 10 percent greater yield of cotton when water was scarce, he said.
Farmers will plant Indigo's reformulated wheat seeds, which the company said will grow better in water-scarce environments, this fall. Indigo has identified more than 20 million acres of wheat on parched land in states including Oklahoma, Kansas and Colorado.
Indigo aims to also re-engineer soy and corn seeds.
"They are also big economic opportunities," Perry said.