A regional NSW startup that says it has cracked the riddle on soil carbon capture has just completed a huge $105 million Series B funding round with Atlassian billionaire Mike Cannon-Brookes among its backers.
Loam’s co-founder and CEO Guy Hudson were elated by the raise, which is among the largest in Australia this year, saying the support from “Mike, and the team at Grok, have been a crucial catalyst for climate tech in Australia”.
“They joined us at seed stage and have continued to support us every step of the way,” Hudson told SmartCompany.
“It was the support of early investors, like Horizons ventures and Grok, that put us in the position to continue to gain the support of forward-thinking, impact-driven investors.”
Leading the enormous series B round were New York-based Lowercarbon Capital and Sydney-based Wollemi Capital, which Hudson describes as “two of the best climate investors in the world today”.
Loam claims to be going where no climate technology company has gone before. Building soil carbon in cropping soil was thought to be a near impossible undertaking, meaning it was regarded as unprofitable by crop farmers.
Until now.
“There is too much CO2 in the atmosphere. By applying fungi to the seed we can enhance the plant’s natural ability to store some of that carbon in the soil long-term. This helps improve agricultural productivity and our environment,” Hudson explained.
The breakthrough was a breath of fresh air for Hudson personally, as well as the industry more widely. He spent the last decade working in climate-focused roles — including a stint at SparkLabs Cultiv8 — but was frustrated by the slugging climate tech industry.
The $105m raise is a long way to come in a relatively short amount of time for the startup, which launched nearly four years ago in Orange, NSW. Hudson says it was really important for Loam to be based regionally to be close to farmers who would adopt the microbial technology.
“Initially we thought it may be challenging to attract the skills required to build out a fairly sophisticated microbial product development team,” he said. “However we have found that our team members are attracted to our mission of gigatonne-scale CO2 removal, and for a lot of them a rural lifestyle”
Setting up shop in Orange is giving Loam plenty of space to grow as well, as Hudson parlays the raise into moving the startup from the pre-commercialisation to the commercialisation stage.
“We have just completed building one of the biggest soil analysis labs in Australia, and we are about to start construction on a new bioproduction facility; that would be really challenging to do in a metropolitan area,” he said.
Hudson says the future is bright for carbon capture startup Loam: with a 112% headcount growth in the past year, the next chapter will be about the rollout in Australian and US agriculture markets, including working closely with farmers and releasing new products.
The timing couldn’t be better. Carbon farming is set to be big business as the world rapidly decarbonises itself to meet ambitious emission targets on the way to net zero by mid-century.
Speaking to The Washington Post this week, Australian farmers Carol and Lindsay Godfrey say they’ve turned their struggling Cunnamulla farm into a successful carbon farming enterprise.
The pair told the newspaper they pull in half a million dollars in revenue a year from big businesses and organisations purchasing ACCUs — meaning the farmers are paid to preserve, replant, or regenerate carbon dioxide-storing trees and vegetation.
“We were so close to being wiped out. Now, no matter the weather, the carbon income comes in regularly every year,” Carol said.
Emma Elsworthy is Climate Editor at The Mandarin.
