Velocity’s Ceragen raises US$2 million to expand operations and product portfolio
Ceragen, a startup that optimizes fruit and vegetable production, has raised US$2 million in a seed funding round that will help expand its operations and develop its technology in additional countries.
The startup, based out of Velocity, University of Waterloo’s startup incubator, develops soil microbes that aid in the growth of fruit and vegetables grown in greenhouses. The financing round was co-led by Divergent Capital and existing investor 1517 Fund, with participation from Ajira Ventures.
“Greenhouses are incredibly efficient,” said Ceragen Chief Executive Officer Danielle Rose.
“They can produce over ten times more food per acre and use 95 per cent less water compared to traditional field production. Unless we want to cut down more forests, increasing the productivity of our current farmland and greenhouses is the best option to increase food security.”
Most tomatoes, cucumbers, and peppers you buy in the grocery store are grown in greenhouses across Canada. However, with field production becoming increasingly unreliable because of climate change, the demand for greenhouse-grown produce is increasing, Rose said.
Newly planted cucumber plants grown in Ceragen's lab using their proprietary microbe system
Most greenhouses use water-based hydroponic systems to grow crops. Unfortunately, these systems may not include various beneficial bacteria and fungi found in healthy agricultural soils that help plants uptake nutrients, respond to environmental stresses, and fight off pathogens.
Ceragen’s “probiotics for plants” products help restore these communities of beneficial bacteria and fungi in hydroponic growing systems, and can boost production yield by 10 per cent on average, Rose said.
“By figuring out which soil microbes can live in a water-based environment, and which ones help each plant type, we are able to help growers produce more food with the same amount of resources,” she said.
Based on outcomes from the Ceragen’s pilots in Canada and the U.S., their microbes can boost production yield by 10 per cent on average.
With two products now on the market for lettuce and tomato plants, and commercial pilots underway in Canada and the U.S., the seed funding will allow the company to expand into Mexico and the Netherlands, while also developing new microbe products for cucumbers and strawberries.
Ceragen’s Chief Technology Officer and Waterloo engineering alumni Matthew Rose said Canadian and international greenhouse fruit and vegetable growers have been eagerly awaiting the company’s new products to increase crop production.
“We regularly get asked when we will also have solutions for strawberries and cucumbers, and with this funding round we can finally develop these products,” he said.
As part of their expansion plans, Ceragen will move out of Velocity this summer to a 5,000-square-foot facility in Kitchener to make room for the company’s plan to produce new inoculants.
Velocity accelerates entrepreneurs' growth from idea to early-stage start-up and beyond. These founders have access to unmatched resources, collaboration space, funding, and an expansive and experienced network made possible only by the University of Waterloo — Canada's top university for founders. In the 15 years since its inception as a University of Waterloo residence, more than 400 Velocity companies have netted more than US$26 billion in enterprise value.
