Iyris makes it easier to grow fresh produce in difficult climates and raises $16 million

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2023 was the hottest year ever recorded, it doesn’t look like we’re going to cool down anytime soon. Rising temperatures have made farming increasingly difficult in areas that were once an important agricultural resource, where heat and drought have severely affected crops.

For most farmers who rely on traditional methods and do not have access to high-tech greenhouses, the need for adaptable, turnkey solutions is critical. This is what agritech companies love Iyrisbased in Riyadh and Delaware, enter. The startup, which offers a lifeline to farmers and helps them meet the challenges of climate change with its agricultural solutions, announces a $16 million Series A funding round.

Executive Chairman Johannes KepplerSpeaking to JS, he said the funding provides Iyris with dry powder to “continue to scale and grow a company that solves the incredibly difficult problem of growing fresh produce and increasing crop yields in the face of of climate change and rising temperatures, heat, and droughts.”

San Francisco-based climate and sustainability fund Ecosystem Integrity Fund (EIF) led the round, which also saw participation from Global Ventures (which also invested in the company’s $10 million seed capital led by Aramco’s arm Wa’ed) , the Dubai Future District Fund (DFDF). ), Kanoo Ventures, Globivest and Bonaventure Capital.

While much of the coverage of climate technology has focused on expensive, robust technologies that may be suitable for specific purposes but are difficult to adopt, Keppler says the focus is on the low-tech and medium-tech world. Farmers in this segment use protected farming methods such as polyethylene covers, acrylic, shade nets and fencing to mitigate environmental impacts on large-scale crop production. These methods include fields and tunnels that aim to limit ecological damage while being more accessible and practical for widespread use, Keppler explains.

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Promoting commercial agriculture in warm climates worldwide

Iyris was born from innovations developed at King Abdullah University of Science and Technology (KAUST) in Saudi Arabia. Co-founded by CEO Ryan Lefers, an agricultural technical expert; Mark Tester, a plant scientist; and Derya Baran in 2018, the company, formerly Red Sea Farms, initially used its heat-blocking technology to grow and sell tomatoes in the Middle East, before commercializing and selling the technology to other growers.

Iyris’ flagship technology, called SecondSky, involves adding an additive to the production of polyethylene. The additive blocks near-infrared radiation, significantly reducing heat while allowing photosynthetically active radiation (the light plants need for photosynthesis) to pass through. To paint a picture, Keppler explained that if you were to compare the situation under a traditional polyethylene roof to one with the additive, you would notice a significant temperature difference due to the heat-blocking properties of the additive.

L-R: Derya Baran, Ryan Lefers and Mark Tester.

This means farmers can reduce cooling costs, water consumption and electricity consumption to manage agricultural growing conditions on the farms. As such, these farmers can plant earlier and extend their growing seasons, resulting in higher yields and healthier plants (which use energy to grow and bear fruit rather than producing more leaves for transpiration). The six-year-old startup claims its proprietary technology (including resilient plant genetics) reduces energy and water use by up to 90%.

“We’ve seen returns rise quite dramatically alongside testing,” said Keppler, an investor-turned-executive chairman. “In fact, these are some of the few innovations that have taken place in this field over the better part of three to four decades, according to some of our customers, who are among the largest growers in the world. And so what this does is make it easier and more profitable to grow crops in difficult conditions.”

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Iyris started close to home, near KAUST, and grew in the UAE, Egypt and Morocco. These regions, where desert agriculture is the norm, face harsh crop growing conditions, making them ideal for testing and proving the effectiveness of the technology. However, as climate change increases, similar challenges are emerging globally, prompting the adoption of Iyris’ technology in places like the US, Portugal, Spain and Mexico. Major fresh produce growers in these areas, Keppler says, are trying to mitigate the new climate challenges and adopt proven solutions for harsher climates.

Ensuring food security in the GCC and other arid climates

SecondSky’s ability to reduce input costs and, most importantly, extend growing seasons is attracting these growers from some arid regions, he added. These farmers and growers using SecondSky can continue to produce when competitors cannot, allowing them to command higher prices and make more money. Keppler claims this results in a payback period within one year when purchasing SecondSky products.

“The way this works is that the growers we serve have regular replacement cycles for products with a typical lifespan of three to five years, depending on region and application. These replacement cycles create a recurring revenue stream for suppliers of these materials,” he explains. “We sell our product to growers through local distributors and supply our additives to the manufacturers and distributors, who incorporate them into their products. Although our product is more expensive, the benefits growers realize result in a payback period within the first year of the harvest cycle.”

The Aramco-backed climate technology works with two major customer groups: large-scale international growers who operate farms worldwide – and smaller growers and farmers that it reaches through production and distribution partners. It sells SecondSky polycarbonate, polyethylene, nets and soon-to-be-launched sun protection screens to these customers in 11 countries, including Turkey and the United Kingdom. His clients include Silal, Armando Alvarez Group and Criado & Lopez.

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Keppler states that there is currently limited competition in the horticultural sector. Companies like US-based AppHarvest and AeroFarms have gone bankrupt in recent years despite raising hundreds of millions of dollars. running a vertical farming business can be. One reason Iyris remains in business is that it has demonstrated the effectiveness of its technology by using it internally, which has ultimately built trust with other growers, the chairman noted.

“There have been numerous attempts at large-scale, commercialized innovative agriculture. In some cases these solutions are perfect. However, our position is that providing a drop-in solution to existing agricultural infrastructure using the existing supply chain is often more effective,” said Keppler, the former founder and CEO of wood pellet manufacturer Enviva until its recent bankruptcy. “This way, farmers don’t have to change their behavior. They can continue to do what they do best: growing their products in their specific region. Our goal is to make it a little easier for them, extend their growing seasons and increase their profitability along the way.”

Iyris, which serves a global market with annual recurring revenues of more than $6 billion for cash hedges, added more customers and sold more products (or generated more revenue) in the first quarter of 2024 than it did in all of 2023, Keppler said. . He added that the company would like to expand other metrics such as total hectares covered by SecondSky, regions served (expanding to countries such as India and China) and square footage of product installed for its customers.

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