Why Loam Bio is prioritising Orange as it goes global
Loam Bio’s fungi-powered soil carbon capture tech is going global. But as it scales its commercialisation, it’s staying in the heart of Orange, NSW.
Loam Bio is planning to develop a bespoke production facility in the heart of Orange in regional New South Wales over the next 18 months.
While the company has seen a great deal of success with its fungi-powered soil carbon capture technology, it’s been operating out of a retrofitted facility here in Australia. And it wants to change that.
Earlier this year Loam Bio grabbed attention with its massive $105 million Series B raise, which included participation from Mike Cannon-Brookes’ Grok Ventures.
Loam Bio uses fungi to reduce emissions and improve soil health
Before Loam Bio, the idea of building carbon capturing into cropping soil was considered impossible. But the startup has managed to do this with a seed coating that contains bacteria and fungi that is able to capture more carbon from the air and store it in soil.
This is beneficial for two reasons. It leads to reduced carbon dioxide in the atmosphere and the carbon improves the soil health by adding more minerals. And once the fungi itself dies, the organic material it leaves behind adds additional good nutrients to improve the soil.
As a result, farmers get crops coming in at higher volumes which are more nutrient-dense.
“We typically take something that looks like standard mushroom production, and add about three different steps at the end to make it fit for a spore-based dry powder product,” Tegan Nock, co-founder and chief operating officer of Loam Bio, said during a site visit in Orange this week.
“There’s a handful of sites around the world that do that. Australia at the moment doesn’t have any sites that actually do that process. So we’re looking at developing a mid-scale production facility here in Orange to be able to then get ourselves to a point where we can do all of the heavy R&D.”
According to Nock, this is essential, because a lot of the microbes Loam Bio is using haven’t seen a production facility before.
“So there’s a lot of investment in our bio production. Being able to take that through so that we can have market launch and short-term scaleup is what we’re looking at here in that Australian market.”
What crops is this available for?
Loam Bio has its CarbonBuilder microbial product currently available for canola and barley in Australia, with wheat being planned for the future.
“We’re hoping … [to be] doing large-scale paddock trials this year, with it being available like full-scale commercial [in] 2025,” says Nock.
There’s also consideration for other crops in Australia, such as chickpeas, as well as other crops in other markets. It’s a specific consideration because, for the most part, Loam matches a single organism to a specific crop based on what colonises and engages with the plant system the best.
“We focus on impact hectares initially — so we hit 80% of the rotation which is wheat, barley and canola in Australia,” Nock says.
It’s a bit different in the US where soy and corn are the focus.
“Then after that, it’s the rotational crops. The addressable hectares there is less, so if we spend an R&D dollar on getting wheat right in Australia, it’s a dollar better spent than pulling through chickpeas as a new crop,” Nock explains.
In addition to its CarbonBuilder products, Loam Bio also offers soil carbon project services to farmers via what it calls SecondCrop. The idea is to help farmers build stable soil carbon. There are different tiers but some of the services on offer include a feasibility assessment, registration with the Clean Energy Regulator, a custom Land Management Strategy (LMS), a baseline soil measurement, and lab analysis.
According to Loam, farms that utilise SecondCrop projects and can demonstrate “net greenhouse gas emissions abatement” will be given Australian Carbon Credit Units (ACCUs). These can be sold, kept, or even retired to offset on-farm emissions.
Loam Bio confirmed with SmartCompany that SecondCrop participants also receive a 50% discount on its CarbonBuilder products.
Why Loam will stay firmly planted in Orange as it expands
Loam Bio used part of its Series B raise to build a small R&D facility in the US to service that market. However, it’s imperative to have a bespoke facility in Australia to be able to scale. It also means an even higher quality product can be developed at a lower cost.
Loam confirmed to SmartCompany that part of the Series B funding will also go towards that Australian production facility.
“This will give us the capacity to be able to scale up more to be able to make sure that we’ve got market fit and we can commercialise,” Nock says.
According to Nock, the decision now comes down to whether to purchase or lease.
“Now that we’ve got the facility designs in, if it’s leased, we’re hoping 18 months to really set it up and have it operational. If it’s purchased, with building timelines it’ll probably creep out a little bit more. But we’re hoping to have that operational within about 18 months.”
Despite going global, Nock says it is important for Loam Bio to continue to grow in Orange.
“Orange is where we founded the foundations of what Loam is today. We spent six months just renting some space floating around and slowly building out the team,” says Nock.
From Orange, the startup has expanded into a few other countries and developed a global footprint.
“Often Australian farmers are receiving technology from the rest of the world. This is a nice chance for the Aussies to say that we’re exporting our tech,” Nock says.
Loam is now up to 112 employees, with 60% residing in Australia. Of that 60%, the majority are living in Orange.
While it can sometimes be challenging to attract talent to a regional hub, Orange is becoming increasingly well known for its agtech facilities, and it’s attracting investors. Not only have the likes of Loam Bio and Cauldron seen cash injections this year, but SparkLabs Cultiv8 has spun up an agriculture-focused investment fund in Orange itself.
But in addition to all of that, regional and rural areas can offer researchers that major cities can’t.
“The nice thing for our R&D team is they can drive half an hour down the road and talk to a farmer where they can see their work having an impact on a farm,” Nock says.
“It’s typically not a terribly hard sell. If you have a scientist who’s in that space who loves what they do and wants to have impact.”
SmartCompany travelled to Orange as a guest of SparkLabs Cultiv8.
