Yahoo Finance Iyris makes fresh produce easier to grow in difficult climates, raises $16M
Last year was the hottest year on record, and it doesn't look like we're cooling down anytime soon. Rising temperatures have made farming increasingly difficult in areas that once had prime agricultural resources that are now severely impacted by heat and drought.
For most farmers who rely on traditional methods and lack access to high-tech greenhouses, the need for adaptable, ready-to-use solutions is paramount. This is where agtech companies like Iyris, based in Riyadh, Abu Dhabi and Delaware, come in. The startup, which provides a lifeline to farmers and helps them navigate the challenges of climate change with its agricultural solutions, is announcing a $16 million Series A funding round.
Executive chairman John Keppler, in a conversation with TechCrunch, said the funding provides Iyris with dry powder to “continue to scale and grow a business that solves an incredibly difficult problem of growing fresh produce and increasing crop yields in the face of climate change and rising temperatures, heats, and droughts.”
San Francisco-based climate and sustainability fund Ecosystem Integrity Fund (EIF) led the round, which also drew participation from Global Ventures (which invested in the company’s $10 million seed led by Aramco’s arm Wa’ed), Dubai Future District Fund (DFDF), Kanoo Ventures, Globivest and Bonaventure Capital.
While so much of climate tech coverage has focused on expensive, robust technologies that may be fit for specific purposes but are difficult to adopt, Keppler says Iyris targets the low-tech and medium-tech world. Farmers in this segment use protected agricultural methods like polyethylene covers, acrylic, shade nets, and screens to mitigate environmental impacts on large-scale crop production. These methods include fields and tunnels aimed at limiting ecological damage while being more accessible and practical for widespread use, Keppler explained.
Advancing commercial farming in hot climates globally
Iyris originated from innovations developed at the King Abdullah University of Science and Technology (KAUST) in Saudi Arabia. Co-founded by CEO Ryan Lefers, an agricultural engineering 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 Eastern country before commercializing the tech and sale to other farmers.
Dubbed SecondSky, Iyris’ flagship tech involves adding an additive to polyethylene manufacturing. 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 compared standing under a traditional polyethylene roof to one with the additive, you’d notice a substantial temperature difference due to the additive’s heat-blocking properties.
This means farmers can reduce cooling costs, water usage, and electricity consumption to manage their agriculture 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 that its proprietary tech (including resilient plant genetics) reduces energy and water consumption by up to 90%.
“We’ve seen yields increase side-by-side tests quite dramatically,” commented Keppler, an investor-turned-executive-chairman. “In fact, these are some of the only innovations that have occurred in this space for the better part of three to four decades, according to some of our customers, who are some of the largest growers in the world. And so what this does is it makes it easier and more profitable to grow crops in difficult conditions.”
Starting close to home near KAUST, Iyris burgeoned 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 technology’s effectiveness. However, as climate change intensifies, similar challenges are emerging globally, prompting the adoption of Iyris’ tech in places like the U.S., Portugal, Spain, and Mexico. Major fresh produce growers in these areas, Keppler said, are seeking to mitigate new climate challenges and adopt proven solutions from harsher climates.
Ensuring food security in the GCC and other arid climes
SecondSky’s ability to reduce input costs and, most importantly, extend growing seasons attracts these growers from some arid regions, he added. These farmers and growers using SecondSky can continue producing when competitors cannot, allowing them to command higher prices and earn more money. Keppler claims this results in a payback within a year of purchasing SecondSky products.
“So, the way this works is that growers we serve have regular replacement cycles for products with a typical lifespan of three to five years, depending on the region and application. These replacement cycles create a recurring revenue stream for suppliers of these materials,” he explained. “We sell our product to growers through local distributors and provide our additives to the manufacturers and distributors, who embed them into their products. Though our product is more expensive, the benefits growers realize result in a payback within the first year of the crop cycle.”
The Aramco-backed climate tech works with two major client groups: large-scale international growers who operate farms globally and smaller growers and farmers whom it reaches through manufacturing and distribution partners. It’s selling SecondSky polycarbonate, polyethylene, nets, and soon-to-be-launched shade screens to these customers across 11 countries, including Turkey and the U.K. Some of its clients include Silal, Armando Alvarez Group, and Criado & Lopez.
https://techcrunch.com/2021/09/22/aerofarms-is-supplying-the-hops-for-goose-islands-latest-ipa
Keppler argues that there’s limited competition in the horticulture space at the moment. Companies such as U.S.-based AppHarvest and AeroFarms have gone in and out of bankruptcy in recent years despite raising hundreds of millions of dollars, signaling how tough operating a vertical farming business can be. One reason Iyris remains in business is that it demonstrated the effectiveness of its technology by using it in-house, which ultimately built trust with other growers, the executive chairman noted.
“There have been numerous attempts at large-scale, commercialized innovative agriculture. In some cases, those solutions are spot on. However, our thesis is that providing a drop-in solution to the existing farming infrastructure using the existing supply chain is often more effective,” noted Keppler, the ex-founder and CEO of wood pellets producer Enviva until its recent bankruptcy. “This way, farmers don’t have to change their behaviors. They can continue doing what they do best — growing their produce in their particular regions. Our goal is to make it a bit easier for them, extend their growing seasons, and increase their profitability along the way.”
Iyris, serving a global market of over $6 billion in recurring annual sales for greenhouse covers, brought in more customers and sold more products (or made more revenue) in the first quarter of 2024 than it did in the whole of 2023, according to Keppler. He added that the company would look to grow other metrics such as the total hectares covered by SecondSky, regions served (expanding into countries such as India and China), and the square meters of the product installed for its clients.
