2023 was the hottest year on record, it doesn’t look like we’re going to cool down anytime soon. Rising temperatures have made farming increasingly difficult in areas that were once prime agricultural resources, where heat and drought have severely affected crops.
For the majority of farmers who rely on traditional methods and lack access to high-tech greenhouses, the need for adaptable, turnkey solutions is paramount. This is where agtech companies like Irisbased in Riyadh, Abu Dhabi and Delaware, enter. The startup, which provides a lifeline to farmers and helps them address the challenges of climate change with its agricultural solutions, announces a $16 million Series A funding round.
CEO John KeplerIn a conversation with TechCrunch, he 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.” , heat, and drought.”
San Francisco-based climate and sustainability fund Ecosystem Integrity Fund (EIF) led the round, which also included participation from Global Ventures (which also invested in the $10 million seed of the company led by Aramco arm, Wa’ed), Dubai Future District Fund (DFDF), Kanoo Ventures, Globivest and Bonaventure Capital.
While much of the coverage on climate technology has focused on expensive, robust technologies that may be fit for specific purposes but are difficult to adopt, Keppler says Iyris is targeting the low- and mid-tech world. Farmers in this segment use protected farming methods such as polyethylene covers, acrylic, shade nets and screens to mitigate environmental impacts in large-scale crop production. These methods include fields and tunnels intended to limit ecological damage while also being more accessible and practical for widespread use, Keppler explained.
Boost commercial agriculture in warm climates globally
Iyris originated from innovations developed at King Abdullah University of Science and Technology (KAUST) in Saudi Arabia. Co-founded by CEO Ryan Lefers, expert in agricultural engineering; Mark Tester, plant scientist; and Derya Baran in 2018, the company, formerly Red Sea Farms, initially used its heat-locking technology to grow and sell tomatoes in the Middle Eastern country before commercializing the technology and selling it to other farmers.
Dubbed SecondSky, Iyris’ flagship technology 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 illustrate a picture, Keppler explained that if he compared being under a traditional polyethylene roof with one with the additive, he would notice a substantial temperature difference due to the heat blocking properties of the additive.
This means farmers can reduce cooling costs, water usage and electricity consumption to manage agricultural growing conditions on 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 technology (including resilient plant genetics) reduces energy and water consumption by up to 90%.
“We’ve seen returns increase dramatically compared to testing,” said Keppler, an investor-turned-CEO. “In fact, these are some of the only innovations that have occurred in this space for the better part of three or four decades, according to some of our customers, who are some of the largest producers in the world. And what this does is it makes it easier and more profitable to farm in difficult conditions.”
Starting near KAUST, Iyris flourished in the United Arab Emirates, Egypt and Morocco. These regions, where desert farming is the norm, face harsh growing conditions, making them ideal for testing and demonstrating the effectiveness of the technology. However, as climate change intensifies, similar challenges are emerging globally, which has driven the adoption of Iyris’ technology in places such as the United States, Portugal, Spain and Mexico. Keppler said major fresh produce producers in these areas are looking to mitigate new climate challenges and adopt proven solutions for more severe climates.
Ensuring food security in the GCC and other arid climates
SecondSky’s ability to reduce input costs and, most importantly, extend growing seasons attracts these producers from some arid regions, he added. These farmers and producers who use SecondSky can continue producing when competitors cannot, allowing them to command higher prices and make more money. Keppler claims this translates into a one-year payback when purchasing SecondSky products.
“So the way this works is that the producers we serve have regular replacement cycles for products with a typical shelf life 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 producers through local distributors and provide our additives to manufacturers and distributors, who incorporate them into their products. Although our product is more expensive, the benefits that producers obtain result in a return on investment within the first year of the crop cycle.”
Aramco-backed climate technology works with two large groups of customers: large-scale international producers who operate farms globally, and small producers and farmers reached through manufacturing and distribution partners. It is selling soon-to-be-launched SecondSky polycarbonate, polyethylene, nets and shade screens to these customers in 11 countries, including Turkey and the United Kingdom. Some of his clients include Silal, Armando Alvarez Group and Criado & Lopez.
Keppler maintains that competition in the horticulture sector is currently limited. Companies like AppHarvest and US-based AeroFarms have been in and out of bankruptcy in recent years despite raising hundreds of millions of dollars, indicating how difficult it is operating a vertical farming business can be. One of the reasons Iyris remains in business is that it demonstrated the effectiveness of its technology by using it internally, which ultimately built trust with other producers, the CEO said.
“There have been numerous attempts to achieve innovative, commercialized agriculture on a large scale. In some cases, those solutions are successful. However, our thesis is that providing an immediate solution to existing agricultural infrastructure using the existing supply chain is often more effective,” said Keppler, former founder and CEO of wood pellet 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 products in their particular regions. Our goal is to make it a little easier for you, extend your growing seasons and increase your profitability along the way.”
Serving a global market of more than $6 billion in annual recurring greenhouse cover sales, Iyris attracted more customers and sold more products (or earned more revenue) in the first quarter of 2024 than in all of 2023, according to Keppler. . He added that the company would look to increase other metrics, such as total hectares covered by SecondSky, regions served (expanding to countries such as India and China) and square meters of product installed for its customers.
