A Gatineau firm that supplies raw material for the burgeoning jet biofuel market has landed a $12-million financing round with the aim of continuing its aggressive global expansion.
Agrisoma Biosciences – which made history in January when its seeds from a mustard-like plant called carinata were used in the first biofuel-powered commercial flight from the United States to Australia – announced the new funding this week.
The series-C round was led by existing investor Cycle Capital Management of Montreal. Also contributing were existing investors BDC Capital and Lune Rouge as well as new investor Desjardins Capital.
As airlines around the world ramp up efforts to cut greenhouse gas emissions, Agrisoma believes its product is an ideal environmentally friendly alternative to traditional petroleum-based jet fuels. The company has partnered with farmers and other biotech firms to grow carinata in the southern U.S. and South America and has begun testing the crop in Europe.
The 10-year-old privately owned firm, which employs about 30 people, has doubled its annual revenues for the past two years and recently inked a deal with Qantas to sell its seeds to Australian farmers and supply that country’s largest air carrier with more than 200 million litres of biofuel a year.
Agrisoma CEO Steve Fabijanski says that although fewer than five per cent of all flights today are propelled by biofuel, that’s set to change with many of the world’s major airlines pledging to cap carbon dioxide emissions by 2020 and reduce them to 50 per cent of 2005 levels by the year 2050.
Fabijanski recently told OBJ he believes at least a third of the more than 300 billion litres of fuel burned by the world’s airlines each year could eventually be replaced by carinata-based biofuel, which emits up to 80 per cent fewer greenhouse gases.
"There’s a very strong commitment by the airlines to do this."
“It’s going to take a while, but I think there’s a very strong commitment by the airlines to do this,” he said. “We’d like to be a big part of it, obviously. This new financing will help us further expand the commercialization of carinata and its production in the southeastern United States, South America and Australia.”
The latest VC round brings the company’s total funding haul to more than $35 million since 2014.
“The biofuel developed by Agrisoma allows for a major change in the greenhouse gas emissions associated with air transport worldwide,” Luc Menard, chief operating officer of Desjardins Capital, said in a statement.
“We are proud to invest in a Canadian flagship that is a leader in the fight against climate change.”
Fabijanski said Desjardins’ participation in the latest round sends a strong signal to the market that his firm has graduated from being a startup with an intriguing idea to a viable player in the biofuels sector.
“It’s a pretty big vote of confidence for us that we’re doing the right thing,” he said. “These are guys who really understand the (agritech) sector.”
Agrisoma’s backers say carinata-based fuels are a win for producers as well as the environment. Carinata is typically planted when fields used for growing most crops are fallow, meaning it doesn’t take away land from food production and helps replenish the soil.
After carinata seeds are crushed into oil, what’s left over is turned into a protein-rich meal that can be sold as animal feed, giving farmers two sources of revenue from the plant.
“As (the producer) of the only scalable feedstock for biojet fuel, we think that the company provides new options for clean, low-carbon flight and provides a tremendous, financially attractive opportunity for farmers dealing with the impact of climate change,” Dion Madsen, senior managing partner of BDC Venture Capital and an Agrisoma board member, said in a statement.