UPDATE: Phytelligence Raises $11.95m Towards $16m Series B
**UPDATE: Added additional Avrio Capital investment of $5 million.**
Agricultural biotechnology and micropropagation company Phytelligence has raised $11.95 million of a potential $16 million Series B. The company announced an initial close of $6.95 million in early July and increased that by $5 million when Avrio Capital committed in late August. The company still expects to reach $16 million total according to an email from Phytelligence, closing in early September.
This round was led by Cowles Company, a family-owned investor out of Spokane, WA with investments in media, clean tech, and some agriculture, among other areas. Also participating in the round was WRF Capital, the investing arm of the Washington Research Foundation.
“The decision to invest in Phytelligence was an easy one to make once we saw the tremendous gap between the current nursery capabilities and the needs of the modern grower,” said Steve Rector, CFO of Cowles Company.
Phytelligence’s patented and trademarked MULTIPHY process enables apples, cherries, peaches, pears, grapes, hops, berries and nuts to grow five times faster with fewer inputs using a non-soil, nutrient-dense growing medium. This speeds up the process for growers to get new, designer fruit varieties like Honeycrisp apples and cotton candy grapes to market as well as alleviating age-old industry bottlenecks. Growers traditionally had to wait just to be able to obtain rootstock for new crops.
Now, Phytelligence provides genetically-verified and virus-free trees and rootstock to farmers in a sector long-plagued by a lack of transparency. CEO Ken Hunt says that in the past, 10% of apple trees sold were mislabeled as to their type.
Phytelligence technology spun out out of Washington State University as founder and CSO Professor Amit Dhingra was woking with local Washington farmers to develop new apple varieties using micropropagation. He founded Phytelligence when the demand from farmers became too great to meet in an academic setting. Now the company offers tissue culture and genetic testing for trees already in the field, as well as selling rootstock and plants.
Phytelligence will use the new funds to further expand its propagation capacity including taking on more greenhouse space.
“We’re also spending a tremendous amount of time and money to constantly improve the process — looking at robotics; looking at the ability to do grafting in a tissue culture lab with a younger plant to speed the process,” said CEO Ken Hunt, who joined the company in 2016.
In addition to being the only genetically-verified rootstock provider, Phytelligence is also always looking for the next great apple variety, but Hunt says despite Phytelligence’s quick pace for a tree-grower, these things cannot be rushed.
“Nature is only so fast. I feel like we’ve got the tools and the ability to make very good breeding selections that will make the discovery of the next Honeycrisp really fast. You just gotta sit there and wait for the plants to grow.” Even after a winning variety is discovered, much more breeding and cultivation is required to reach critical mass to bring the new variety to market. Hunt says that the fastest possible timeline for a new apple variety is seven to 10 years.
Since founding in 2012, the company has grown to around 70 employees with greenhouse space in Washington and a tissue culture lab in Oregon. Dhingra also still runs an R&D lab at Washington State University and Phytelligence has right of first refusal to any new tech developed there.
“When I started the company, I was grateful that the industry was the first to come to the table with financial support,” Dhingra told AgFunderNews in 2016. “Phytelligence came from the industry as growers defined what their problems were and through their support and guidance we were able not only to develop solutions for them but to test them and improve on them. In many ways, this is the true definition of a democratic process: from the industry, by the industry and for the industry!”
Phytelligence has raised $12.6 million total to date.