A Vancouver clean-technology company that uses natural ingredients to kill bedbugs has raised US$45-million to pursue a bigger goal: slashing chemical use by farmers worldwide.
Terramera Inc. raised the funds in a deal co-led by past backer Seed2Growth Ventures – a Chicago VC fund that was one of Beyond Meat’s first backers – and the venture arm of New York-based commodities asset management firm Ospraie Management LLC. Terramera has now raised US$80-million since 2010 from a group of investors including IKEA’s clean-tech venture arm, Japanese chemical giant Sumitomo and Canada’s Renewal Funds and BDC Capital.
The founding idea behind Terramera stemmed from a conversation founder and CEO Karn Manhas had while attending law school at the University of British Columbia in 2009, four years after serving as a Liberal MLA for one term. He and a colleague began arguing about whether natural ingredients could kill bedbugs. Mr. Manhas believed they could, and soon discovered that Indians had used extracts from the tropical neem tree as a natural pesticide for thousands of years. Mr. Manhas, who has a biology degree from McGill University, set up a basement lab and devised a spray using neem tree extracts that was lethal to bugs when introduced through their respiratory system. He got U.S. Environmental Protection Agency approval in 2013 for a product that kills bedbugs; it is now sold in more than 1,600 U.S. stores and generates millions in revenue.
Now, he’s hoping to use his company’s intellectual property – Terramera has or has applied for 185 patents – to cut the amount of synthetic pesticides used in agriculture by 80 per cent while increasing crop yields. His company has devised a system using machine learning and biochemistry to develop formulations drawn from hundreds of natural products and selling them as additives that chemical companies can blend with their fertilizers or pesticides. The mixture would achieve higher degrees of uptake by targeted cells, making them more effective, he said. “We’ve found you can take conventional chemicals and reduce the dosage to a fraction for the same level of performance,” Mr. Manhas said. “That lowers costs, minimizes waste and lowers environmental impact.”
“We really like this play,” said former Monsanto chief financial officer Carl Casale, who leads venture investing for Ospraie. “It’s a great all-around benefit for the company, the environment and society.”
The 130-person company, which is advised by Adrian Percy, former global head of R&D for Bayer’s crop-science division, plans to start calling on giant agri-chemical companies this fall to see if they’re interested in striking deals to license its technology.