Our Investment in Nitricity
Helping Farmers Feed The World While Saving The Planet
|Jason Jacobs||Feb 22||2|
One of the many joys and privileges of climate tech investing is the broad purview of problems (and remedies) we’re able to explore. Having backed companies in wide-ranging categories, we revel in the diversity of climate issues we get to learn about with each team we meet.
One such problem that seldom receives mainstream attention is the enormous impact of fertilizer on climate change. Alongside other sectors, agriculture represents the fifth largest source of GHG emissions in the U.S., comprising approximately 10% of total output. Within that category, the production, distribution, and overuse of fertilizer contributes to over 4 - 6% of global CO2e emissions. The problem stems not only from the release of nitrogen, a key ingredient of fertilizer that’s also more heat-trapping than CO2, but also the emissions resulting from its production, delivery, and application in fields.
Nitricity, a California startup founded by a team of Stanford PhDs and postdocs, is addressing the GHG impact of fertilizer with a solution that could mitigate up to 81% of the industry's emissions, if widely adopted. Today, we’re proud to announce our investment in Nitricity and its broad vision to help farmers feed the world more sustainably.
The Nitricity team (from left): Dr. Josh McEnaney, CTO; Nico Pinkowski, CEO; Dr. Brian Rohr, Ops; and Dr. Jay Schwalbe, CSO.
What is Nitricity?
With its origins in Dave Danielson’s Stanford class on transformational energy ventures, the founding team created a solution for producing nitrogen-based fertilizer that has a materially-reduced GHG footprint and is less expensive for farmers. Using just air, water, and solar energy on premises at the farm, Nitricity’s technology eliminates the transportation emissions and cost associated with existing fertilizer production. Further, it mitigates over application via an irrigation system that distributes fertilizer with greater precision than traditional means.
Nitricity’s CEO and Co-founder, Nico Pinkowski, was an MCJ pod guest in 2020 and spoke with Jason on the climate effects of fertilizer and how his company is addressing it.
Why Did We Invest?
Founders with technical talent and tenacity are rare, and the Nitricity team demonstrates these essential qualities. With doctorates in mechanical engineering and chemistry, the team has an expert grasp of energy systems and nitrogen fixation. Since its formation at Stanford in 2018, Nitricity has won numerous business competitions, including those offered by Cyclotron Road, Stanford, Caltech, ASU, and MIT. The company has bootstrapped and remains capital efficient, while continuously iterating on its solution. While it founded Nitricity out of its backyard near Stanford, the team has spent copious amounts of time with farmers in California’s Central Valley, its initial customer base, homing in on farmer pain points and exploring opportunities to reduce GHGs in the fertilizer process. When Nico shared that he and his co-founders were spending most of their time on the farm rather than in the lab, we knew we had found a team that was keenly focused on “product/market fit.”
The grand prize from a recent pitch competition organized by ASU. This is one of many competitions the team has won and has helped finance the company.
Fertilizer’s Footprint Is Exacerbated by a Hungry World
The human population, currently just under 7.8 billion people, has grown in no small part due to the advances in agricultural output. Synthetic fertilizer, created over a century ago with the development of the Haber-Bosch process, materially advanced farmers’ crop yields and ushered in a boom in both population and quality of life. However, the process, which has largely remained unchanged since its advent, requires immense heat and energy and has been attributed to 1% of all global energy-use and 1.4% of global CO2e emissions. As humanity struggles to support an ever growing and hungrier world, the emissions footprint associated with synthetic fertilizer is expected to worsen. Projections show that agriculture will constitute 30 - 40% of global emissions by 2050 and approximately 12% is expected to come from synthetic fertilizers.
Decentralizing Fertilizer Production for the Benefit of Both Farmers and Climate
Fertilizer production today involves centralized, billion-dollar facilities that use coal or natural gas. The fertilizer output is then delivered, often via truck, to a chain of middlemen before it reaches farms. Today, the production, distribution, and application stages generate significant GHG emissions and costs for farmers. Nitricity is disrupting that model by decentralizing production through a modular on-farm, solar-powered solution. The resulting benefit is fertilizer produced with clean energy that greatly reduces the carbon footprint found in industrial production and delivery. And because of its logistical simplicity, Nitricity’s solution is cheaper at scale to boot.
Nitricity’s “Bosch Squasher,” a modular fertilizer production system, seen on-site at a farm in California’s Central Valley. It uses air, water, and solar energy to produce fertilizer on which farmers depend.
Making Agriculture More Sustainable
Tackling a meaningful driver of climate change, the team has assembled all the necessary ingredients to make a huge dent for both the farmers it serves and the challenges surrounding emissions. We’re excited about the company it’s building, the traction it has made, and its vision of a more sustainable way to feed the planet.
If you are an accredited investor and want to learn more about being an investor in our fund (to back more great companies like this one!), reach out here.