Diversification is key for farmers looking to improve their profitability and mitigate risks....
This article was originally published in The Times’ Rising Stars Series, August 2023, and written by Naomi Ackerman.
The race to net zero is on and companies are looking for effective and trusted ways to offset emissions. The team behind the Dundee-based agritech company Agricarbon UK is one of the start-ups hoping to make soil a key part of the climate solution, while tapping into the booming market for carbon credits.
Carbon credits have faced criticism in recent years, with some tree-planting activities accused of working at the expense of communities and in ways that harm biodiversity. However, many shareholders now demand proof that companies are not “greenwashing”, and proponents say standards are being raised as the market develops. The US bank Morgan Stanley expects the market to grow from about $2 billion in 2022 to about $100 billion in 2030.
Soil is a vital “carbon sink” – a place that can remove huge amounts of CO2 from the atmosphere and keep it safely stored. But soil sequestration has traditionally struggled as an offsetting tool because it has been difficult and expensive to quantify its impact for companies.
In 2018, Agricarbon’s co-founder, farm owner Stewart Arbuckle, contacted his neighbour, Dr Helaina Black, the former head of ecological sciences at Scotland’s sustainable land management research centre, The James Hutton Institute.
Their collaboration led to the development of the start-up’s technology, which uses robotics-based methods to accurately and cheaply measure the amount of carbon sequestered in soil, and to do so at scale.
The startup’s co-founder and chief executive, Annie Leeson, 49, is a former advisor on decarbonisation strategies, and had been frustrated by the lack of existing infrastructure around soil carbon credits. In 2019, looking for a new project after exiting her consulting company, the entrepreneur looked into the sector and came across Arbuckle, 38. The duo met in spring 2020 and were building the company within months.
“You get to a point in your life where you think: ‘Do I really want to be looking at marketing bits and bobs, or am I going to solve something that’s really important for the world?,” Leeson said.
“This felt like something really, really important, and really frustrating that it wasn’t being solved. So I re-mortgaged my house to make sure that I had money to live off… and built a network of extremely experienced advisors.”
The team managed to secure grant funding from Scottish Enterprise, which allowed them to recruit “a genius robotics engineer” and get going on their machinery and commercial story. An early tipping point came when Agricarbon secured First Milk, a dairy cooperative, as a customer. “They basically said: ‘You’re doing the thing that everybody’s wishing somebody would do. We’ll take your first capacity as soon as it’s ready.”
The startup now has projects running in the UK and Europe, and has just launched its first in the US. It has signed up more than 70 clients, including Nestlé and Diageo.
Agricarbon has raised more than £5.5 million in venture capital investment so far, including a £4 million round in February last year, with backers including venture firms Adelpha and Evenlode Impact. The company, which does not disclose its revenues and is yet to reach profitability, has used the capital it has raised to fund research and development, and build a 50-strong team.
Leeson said having the Arbunkle’s family farm right opposite The James Hutton Institute has created the “perfect incubator environment”. She also believes the company’s eco-friendly mission has helped the co-founders recruit. “We’ve punched well above our weight in terms of the calibre of staff,” she said.
A major challenge the company has faced has been navigating a still-emerging market.
“The industry itself is evolving so quickly, so you have to be really on the ball,” Leeson said. “You have to be connected into what’s going on with your customers and the regulators, and in opinion and protocols – and that’s really difficult for a small team.”
She also feels the pressure to grow quickly and raise significant amounts of capital. “On a personal level, it’s taken a lot of mental adjustment, because we’re not a digital company that can just press pause on the operational growth and do the fundraising,” Leeson said. “I’ve been very realistic about what it’s going to take… You just have to let go of the fact that it’s impacting everything else in your life.
“I was really struggling by early this year. The amount of energy the job takes just kept going up and up and up. Then I introduced a new exercise regime….forcing myself into that meant it transformed my resilience and my energy.”
In recent months, the entrepreneur has used her renewed energy levels to power a fundraising drive. Agricarbon plans to close its latest round of fundraising this summer, and then use fresh capital to expand further in the US and Europe, and develop the science by building on its data collection efforts.
Long-term, the co-founders want to help spark a seismic shift towards regenerative farming practices “that genuinely rebuild the soil” around the world.
“The opportunities are huge,” Leeson said. “The challenge is simply how quickly you can put all of those pieces into place.”
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