4 Companies Replacing Nitrogen in Fertilizers
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In our recent profile on Motif FoodWorks, we described how the company is turning microbes into biological factories to produce specialized proteins to enhance the production, taste, and texture of plant-based food. It’s only one example of how synthetic biology may someday disrupt our entire food system. Today we’re going to focus on where it all begins (at least until we start growing burgers from cow cells in laboratories): the farm. Specifically, we want to talk about how companies are engineering microorganisms such as bacteria to replace chemical fertilizers, particularly one startup that is building better bugs for nitrogen fixation ー Pivot Bio.
Nitrogen fixation is the process by which nitrogen gas from the atmosphere is converted into different compounds that can be used by plants and animals.Credit: Study.com
The Current Fertilizer Market
This is a topic we first visited back in 2018 in an article about bad and good fertilizers. Plants need nutrients to stimulate growth, especially nitrogen, phosphorus, and potassium. Most commercial fertilizers today are made from byproducts of the petroleum industry. While these products have helped fuel the greatest agricultural expansion in history, they have also been linked to a growing list of environmental problems. For example, the “spray and pray” method used to apply nitrogen fertilizers results in as much as 50% being washed downstream, polluting groundwater and causing dead zones in areas of the ocean. In addition, studies have shown that off-gassing from nitrogen fertilizers is a major source of air pollution, not to mention nitrous oxide is a potent greenhouse gas.
Yet fertilizers are big business. The top-five fertilizer manufacturers in North America have a combined market cap of nearly $60 billion. The global fertilizer market is worth upwards of $200 billion per year, depending on which market report you want to believe. And worldwide fertilizer production is estimated at 190 million tons, up from just 20 million tons about 70 years ago, with nitrogen accounting for more than a third of the total.
However, there are signs that the industry is peaking, with fertilizer production actually dropping during the 2018-19 season and only modest near-term gains predicted. Consolidation is also underway. Two of the industry’s biggest players, Potash Corp. of Saskatchewan and Agrium, merged in a $36 billion deal a few years back to form Nutrien (NTR), while CF Industries Holdings (CF) more recently simplified its business by absorbing the common stock of one of its spin-off companies, Terra Nitrogen. Meanwhile, many of those same made-up market reports predict double-digit growth in organic fertilizers for the foreseeable future.
Using Synthetic Biology to Create Fertilizers
The fertilizer industry seems ripe for a little disruption. One of the alternatives to chemical fertilizers gaining traction is the use of bacteria to fix nitrogen, a process by which atmospheric nitrogen gas, N2, is transformed into a form that plants can absorb through their root systems. In this case, soil bacteria attach to the roots, feasting on sugars from the plants in exchange for fixing nitrogen into a usable form. This natural system of nitrogen fixation is actually the one we mainly relied on before industrial agriculture came on the scene. The drawback is that the microbes can’t compete with the chemicals in a head-to-head contest in terms of performance ー at least not yet.
This is where Pivot Bio comes into the story. Founded 10 years ago, the San Francisco area startup has raised more than $616 million, including a massive $430 million Series D earlier this month. Among its nearly 20 investors is Breakthrough Energy Ventures, a green technology fund known more for its big-name investors (Jeff Bezos, Bill Gates, Richard Branson, and Masayoshi Son, among others) than its investments (Commonwealth Fusion Systems, Motif FoodWorks, CarbonCure, etc.). Other backers include agribusiness (including fertilizers) and food company Bunge (BG); Monsanto, before its acquisition by Bayer (BAYN.DE); and a long list of venture capital companies, many focused on agtech.
Similar to how Motif FoodWorks alters the DNA of microbes to produce novel proteins, Pivot Bio turns bacteria into nitrogen-producing factories optimized to work with certain plants. The company first screens for the microscopic bugs that already have the code for nitrogen production in their DNA. Nitrogen production is then activated and “supercharged” using the microbe’s own genetics. For the chemistry nerds out there: The microbes take the triple-bonded atmospheric nitrogen molecules and snap them, creating the ammonia that plants need to grow and produce. The process normally requires a tremendous amount of energy to break those bonds, but Pivot Bio imbues its microbes with the specialized tools to break apart the molecule.
Commercialization of Nitrogen-Fixing Microbes
The company claims its products replaced synthetic nitrogen on more than one million crop acres in 2021 alone, representing more than 300% growth year-over-year. Pivot Bio also boasts that it is the only “company in the world to have shipped a synthetic nitrogen fertilizer replacement at scale,” a claim we can’t confirm or deny. We do know the startup just released its fourth commercial product in three years, Pivot Bio PROVEN 40, which enables corn growers to replace up to 40 pounds of synthetic nitrogen per acre. Pivot Bio also claims that in 2019 on-farm trials, growers saw a six-bushel advantage with Pivot Bio PROVEN versus synthetic fertilizers. Its other current commercial product, Pivot Bio RETURN, is designed to improve growth for both sorghum and wheat.
The company, which sells its products through a direct-to-grower model, says that early results from one study showed that its microbes don’t contribute to nitrogen loss.
Competition in Nitrogen-Fixing Microbe Market
While Pivot Bio claims to be the market leader in commercial production and sales of nitrogen-fixing microbes, it’s not the only company developing natural fertilizers for nitrogen replacement. Here are a few of its direct competitors:
Founded in 2017, Boston-based Joyn Bio is a joint venture between Bayer and synbio startup Ginkgo Bioworks, which also spun out Motif FoodWorks. The plant sciences startup is mainly funded through its parent companies, along with Global Viking Investors, to the tune of $200 million. While dedicated to engineering microbes to address different challenges related to plant growth and health, Joyn Bio’s first product is focused on nitrogen fixation for cereal crops like corn, wheat, and rice. Joyn’s microbe engineering platform starts with a library of highly characterized microbes and engineers them with naturally occurring traits, drawing on Ginkgo Bioworks’ synbio platform and Bayer’s microbial application expertise and library of more than 100,000 strains. Those resources alone would seem to make Joyn Bio the most capable competition on this list, though it has yet to release a commercial product.
Founded in 2014, BioConsortia out of Davis, California, has raised $37 million from a handful of investors, with Khosla Ventures being the marquee name on the list. The company is developing a diverse portfolio of microbe-based plant products, including pest management and biostimulants that improve plant growth, enhance nutrient uptake, and increase resilience to stress. It is also developing a nitrogen fertilizer in collaboration with The Mosaic Company (MOS), which is one of the big fertilizer manufacturers we mentioned earlier. BioConsortia’s Advanced Microbial Selection process uses multi-trait screening, colonization technologies, genomics, and gene editing. The company has already identified naturally occurring spore-forming microbes capable of fixing atmospheric nitrogen and colonizing corn, wheat, and other crops.
Not every company believes you need to improve on nature through gene editing. Founded in 2018, Kula Bio has raised about $22 million, including a sizable $10 million Seed round in May. The company does not use genetically modified bacteria. Instead, it makes the bacteria “fat” by including an organic, carbon-rich energy source in the formula so that the microbes have enough in the gas tank to fix nitrogen. The startup’s first commercial product is Kula-N, which it claims can replace up to 80% of a grower’s nitrogen needs while also building soil health.
In fact, there are a number of companies employing microbes to improve soil health and plant growth by developing natural fertilizers and other products. Indigo Ag, one of the world’s biggest agtech companies, sells microbe-coated seeds for crops such as wheat and corn to help plants better survive drought and heat, as well as improve water and nutrient use. Another well-funded agtech company, AgBiome, uses microbes for pest control. It turns out one of the biggest challenges on the planet ー feeding billions of humans ー requires trillions of the world’s smallest organisms. Investors hot on this theme should continue to monitor Pivot Bio, Indigo Ag, and others as the market for microbes continues to mature.