Food and agriculture-focused Wheatsheaf Group has co-led an $11 million financing round for Ostara Nutrient Recovery Technologies, a Canadian company with technology that transforms recovered phosphorus and nitrogen into sustainable fertilizers.
Working with Silicon Valley venture capital firm VantagePoint Capital Partners, the financing round earlier this month also drew follow-on investments from other existing investors in Ostara. Capital from the round will be devoted to accelerating fertilizer production, as well as sales and marketing efforts, according to Ostara.
The firm’s proprietary technology recovers phosphorus and nitrogen from industrial, agricultural and municipal water treatment facilities and transforms it into Chrystal Green, a sustainable fertilizer. Installed at 18 global water treatment facilities in North America and Europe, Ostara claims its technology creates the world’s first fertilizer to release nutrients in response to plant demand.
“When a plant grows, it emits organic acids from its roots to dissolve nutrients around the roots,” Wheatsheaf chief executive Graham Ramsbottom told Agri Investor. “The product that Ostara makes is acid soluble, not water soluble.”
Vancouver, British Colombia-headquartered Ostara sells into turf and agricultural sectors and secured regional fertilizer agreements with Taurus Agricultural Marketing in Western Canada and ICL Specialty Chemicals in Western Europe during the second half of 2018.
Wheatsheaf’s initial investment in the company came in 2014, according to Ramsbottom, and while Ostara’s initial focus has been on recovering phosphorus from waste water, going forward it will look to draw upon other feedstocks including animal waste and food-processing plant byproduct.
“Phosphorous is a finite resource in the world,” Ramsbottom said. “A lot of the world’s commercially-available phosphorus is in disputed territories in Africa and we need to look at how we make the use of phosphorus sustainable.”
Headquartered in London, Wheatsheaf was established in 2012 by the Grosvenor Estate, an investment holding of the Duke of Westminster, after it decided to diversify from land and enter another significant business, Ramsbottom said.
He added that Wheatsheaf drew upon the wider Grosvenor organization’s hundreds of years of farming and animal-breeding experience in deciding to establish a distinct unit to support long-term investments in agriculture.
“We felt that ag was a sector that was about to go through quite significant change through the application of technology and was one of the last big sectors to be affected by technology,” he said. “We’ve identified businesses and areas where we think there is an opportunity, through their purpose, to have an impact, but we recognize for that to be truly enduring and sustainable it needs to be commercially viable.”
Wheatsheaf’s investments are carried out by a London-based team of 20 and through an office in Minneapolis the firm opened last year.
“A lot of great activity happens on the coasts – in the US – but there is also a lot of good things going on in the middle; a lot of deep knowledge of agriculture and a lot of families that really understand stewardship,” said Ramsbottom, before adding that Wheatsheaf is actively looking to add to its team in North America.