Funga claims to be the first company to leverage nature’s power of carbon removal, by focusing on restoring belowground fungal biodiversity. The company just raised a $4 million round.
The company was founded by ecologist and climate scientist Dr. Colin Averill, and it combines modern DNA sequencing and machine learning technology with breakthrough research on the forest microbiome. This approach allows Funga to put the right native, biodiverse communities of mycorrhizal fungi in the right place. The strategy is based on the idea that the reintroduction of wild soil microbial biodiversity can accelerate plant growth by an average of 64%, which in turn accelerates carbon capture.
“An entire galaxy exists below our feet, made up of millions of species of bacteria and fungi. These microscopic organisms have profound effects on forest growth and carbon capture, that until now have been overlooked as a way to accelerate natural climate solutions while also restoring essential microbial biodiversity to our soils,” says Averill in an interview with TechCrunch. “Our team at ETH Zürich’s Crowther Lab has spent years documenting how these fungi ultimately affect tree growth. We’ve learnt that restoration of belowground fungal communities can significantly accelerate plant growth and carbon capture. We’re thankful for the support of our investors that will allow our team to take this science out of the lab and into our forests, generating biodiversity and climate action at scale.”
The company’s $4 million seed funding round was led by Azolla Ventures. Additional participants in the round include Trailhead Capital, Better Ventures and Shared Future Fund as part of a Collaborative Fund vehicle. Funga reps tell us that the funding will be used to accelerate the development of Funga’s proprietary software and datasets; scale the footprint of its forest microbiome restoration projects; and ultimately offer a new class of high-quality, sustainable carbon removal at pace with rapidly escalating demand.
Funga recently established its first microbiome restoration projects in Lexington, Georgia in partnership with Conservation Resources. Over the next 18 months, Funga will establish an additional 2,500 acres of forest microbiome restoration projects within the loblolly pine footprint of the southern United States. The company’s goal is to sequester at least three billion tons of carbon dioxide through rewilding forests by 2050. Funga will measure how much additional carbon dioxide is captured as a result of forest microbiome restoration and will make this available to corporate buyers as part of their carbon removal portfolio.
“I first learned about the climate crisis as a freshman in college, during the Myspace era of 2004. Since then, the threat of climate change and biodiversity collapse continue to weigh on me. I see these as two of the biggest challenges facing my generation, and our planet. During this time I became fascinated by what we still don’t know about the climate crisis,” says Averill. “What limits our ability to understand how much warming will happen, and how quickly? If you study the global carbon cycle, you quickly learn that many of those uncertainties lie underground. How the microbial life that inhabits soil ultimately influences the global carbon cycle and climate forecasts was this huge question mark in the field.”
He spent the next 17 years studying how soil microbial biodiversity controls the capacity of forests to act as carbon sinks, buffering the planet against climate change. In that time, breakthroughs in DNA sequencing technology and computational power allowed Averill and his team to “see the forest for the fungi,” as he puts it, and the team was using this technology to identify what a healthy forest fungal microbiome looks like, identifying fungi linked to accelerated tree growth and carbon removal.
“Our round is led by Azolla Ventures, which focuses on investing in neglected climate opportunities. Rewilding soil fungi to accelerate tree growth and capture carbon from the air has never been done before at scale. It requires engaging with molecular biology, the forestry industry and the emerging carbon markets,” says Averill. “It’s difficult to find all of that expertise in one place, and so we were sort of a square peg for a lot of VCs. It’s been a privilege to work with Matthew Nordan and the team at Azolla. They are incredible at supporting our vision for a biodiversity-first approach to natural climate solutions.”
The company says its two major milestones are to generate fungal DNA profiles from 1,000+ forests, which the team hopes will enable it to see how the forest fungal microbiome affects forest health and carbon sequestration in unprecedented detail. The goal is to use the dataset to power the company’s data platform, which recommends the right combinations of wild fungi for the right location to achieve the greatest carbon sequestration outcomes.
The other milestone is to establish 1,000 hectares (~2,500 acres) of projects where we both plant trees and “plant” soil fungal communities.
The company wouldn’t share what the valuation was for the round, but tells us that it was an equity round, where roughly $1 million of SAFE and convertible notes were converted into equity. The company’s first $1 million was raised summer 2022 on notes, and the remaining $3 million came in as part of the equity financing event which closed at the end of December 2022.
“I am truly excited about working with the incredible team we’ve assembled. I’ve recruited some of the best scientists I know out of academia and industry, coming from places like the U.S. Forest Service, NASA and cutting-edge fungal product companies. At the same time, we’ve been able to recruit business talent with deep experience building biological and environmental technology companies: we have such a strong mixture of talent and expertise. I love seeing the way ideas come together and people collaborate on our team,” says Averill. “Our scale is fundamentally limited by how much land we can operate on, and how soon. Part of that is building great relationships with forest landowners and the foresters who actually get the work done on the ground. Without their support and buy-in, none of this can happen. Part of that is learning how to massively scale up wild microbial communities, something that has never been done before. We’re using this funding round to de-risk and overcome these challenges.”
The company insists that the climate crisis is just one symptom of a total Earth crisis, and says that global-scale land conversion, pollution and environmental degradation is beginning to tip the planet into a sixth mass extinction event.
“The complexity of life on our planet — its biodiversity — is a fundamental, planetary life support system. The more we look, the more we discover this extinction crisis is coming not just for the plants and animals, but also for the fungi, the mold, the microorganisms. This is truly alarming,” says Averill. “Most species on Earth are microbial. Microbial life was the first to inhabit this planet, and will likely be the last. Most of our antibiotics were first isolated from soil fungi. The biodiversity of soil life is astonishing — a handful of soil easily contains over 1,000 coexisting microbial species. This microbial biodiversity fundamentally controls how ecosystems recycle materials, how plants access growth-limiting nutrients, how long-captured carbon resides in soils, and yet we barely understand it. We are eroding the biodiversity of soil and ecosystem microbial life, and we don’t know what we’re losing in the process. We’re almost certainly closing doors on ways to manage the Earth more sustainably. These organisms are the products of billions of years of evolution, and as yet, have barely been studied or applied as a critical solution to help tackle climate change.”
source: TechCrunch
