How Maricopa startup Biodel AG aims to revolutionize the agriculture industry
A Maricopa-based regenerative agriculture startup is ready for a growth spurt after raising a new round of funding and participating in a global pitch competition.
Biodel AG, which makes products that help farmers improve soil health, has its sights set on scaling its flagship product, Sequester, in nine Western states and northern Mexico — areas that it says encompass more than 30 million acres of degraded soils. Sequester is a non-toxic soil amendment that helps capture carbon dioxide from the atmosphere to reverse effects of climate change, according to the company.
Biodel aims to generate more than $5 million in sales in 2024, based on field trial performance and customer demand for its products, said Ben Cloud, the company’s CEO.
“We’re seeing great performance and we think that will pick up demand rather strongly,” Cloud said.
Biodel is tapping into an industry that is seeing increasing buy-in from both the public and private sectors.
The U.S. Department of Agriculture recently announced that it was making more than $3 billion available for climate-smart practices through the Inflation Reduction Act, while huge corporations such as Nestlé, Danone, Unilever and PepsiCo are making investments into the sector, according to GreenBiz.
The regenerative agriculture market was estimated at $8.7 billion in 2022, according to a September report from Emergen Research, a business management consultant. That figure is expected to rise to more than $32 billion by 2032 as companies seek more eco-friendly agricultural practices, Emergen estimates.
Biodel AG in September landed an undisclosed series A investment from Pangaea Ventures with participation from Arizona Venture Development Corp., bringing the total amount of venture capital raised by the company to $5 million, he said.
“We were really glad for our most recent financing with Pangaea Ventures,” Cloud said. “They’re really committed to Arizona, to the environment and helping us sequester carbon. We fit into their program quite nicely and we enjoy working with them.”
Biodel is using the funding for product development as well as marketing and sales of its soil amendments, fertilizers and biostimulants.
Pangaea’s investment in Biodel marks its first in an Arizona-based company. The global venture capital firm, which is headquartered in Vancouver, Canada, relocated its New Jersey office to the Valley in 2019.
“Agriculture will play the biggest role in nature based carbon sequestration,” Janelle Goulard, Pangaea Ventures partner and Biodel AG board member, said in a statement. “By investing in breakthrough technologies that reduce water usage and improve food production, we are contributing to a sustainable future.”
Company to boost marketing in 2024
Biodel grows, harvests and processes microorganisms and plant extracts to create its products for landowners and farmers looking to transition to regenerative practices, improve their environmental footprint and sell carbon credits, Cloud said.
Cloud, an Arizona native and farmer for more than 30 years, was prompted to start Biodel after visiting Australia in 2001 with an agricultural leadership group. At the time, he said, a drought brought forth by El Niño was impacting the water level of the Murray-Darling Basin in southeastern Australia.
“It really opened my eyes to the issue and that we needed to be looking for solutions,” he said. “So over the years, I’ve just been very attuned to the issue of carbon sequestration and how we can best position ourselves to restore carbon cycling to our soils.”
Cloud co-founded Biodel in 2015 after discovering an extract from guayule, a desert shrub that’s popular among Arizona researchers due to its rubber content.
The company developed an extraction method to make a plant biostimulant to increase crop yields. From there, Biodel patented its extract and in 2018 began development of regenerative inputs.
Biodel has 12 employees and a facility in Maricopa where it processes material extracted from guayule and makes proprietary blends of cyanobacteria strains that rejuvenate microbes in soil, and a mixture of complex and simple sugars, lipids and proteins intended to reduce the amount of nitrous oxide emitted from soil.
In November, Biodel was among 10 finalists that pitched their companies to a panel of judges in the New Energy Challenge, a competition held in Amsterdam and organized by Rockstart, Shell, Unknown Group, and YES!Delft.
As a finalist, Biodel was a participant in a variety of workshops and training sessions, gaining insight and support from experts to develop its products and company.
Because the company’s product development is progressing at a fast clip, it anticipates opening in the near future another funding round in the $15 million to $20 million range, Cloud said.
While the company’s initial focus is on growing market share in the Western U.S. and northern Mexico, it’s also eyeing expansion nationwide within two years, he said.
“In 2023, we begin marketing some of our products, and 2024 is going to be a much larger marketing effort,” Cloud said.