Agroforestry startup Propagate raises $10m Series A funding to accelerate growth
Propagate, a commercial agroforestry platform, has closed a $10 million Series A led by Belgium-based The Nest. Other investors included Agfunder, the TELUS Pollinator Fund for Good, Techstars, and Neglected Climate Opportunities, a wholly owned subsidiary of the Jeremy and Hannelore Grantham Environmental Trust, and more.
Propagate is a software, development and financing ecosystem that makes it easy for farms to transition acreage to agroforestry. Their platform provides access to agronomic insights, technical assistance, and financing so that farms can reduce risk while integrating fruit, nut, and timber trees with animal or crop farming systems.
Ethan Steinberg, CEO and Co-founder, Propagate: “Farms do not have the resources they need to win with agroforestry. There are hurdles around farm design, implementation, and financing that have slowed adoption. The lack of resources available to farmers has kept farms from realizing wins in profitability and carbon sequestration. Our platform is built around the hurdles that farms have shared with us. These insights have helped us create an ecosystem that can institutionalize the industry.”
Founded in 2017, Propagate is a Techstars-backed company, a portfolio company of Elemental Excelerator as well as a partner of USDA's Partnerships for Climate Smart Commodities. Propagate currently advises over 20,000 acres of agroforestry, supporting over 760,000 trees & shrubs. The company also actively manages over 600+ commercial acres, and growing, through its regional agroforestry hubs.
Today, the startup works with farmers, agribusinesses, and service providers to design and install tree-crop systems that work in tandem with existing farm operations. The Propagate ecosystem of products & services includes regenerative farm planning and management software (Overyield), commercial agroforestry development (Propagate Farm Services), and equity investments for agroforestry transition (Agroforestry Partners).
Overyield is a SaaS-based agroforestry farm planning and management software that provides farm design, crop suitability as well as agronomic insights so that the cost, revenues, yield projects, and labor assumptions are transparent by crop by year in order to make implementation easier. This platform can take a project idea from computer screen to productive agroforestry in a matter of hours. As a testament to this timeline, it used to take 80 hours to map out an installation but with Overyield’s project assessment and profitability scoping tools, it only takes eight.
This fundraise will support the company’s efforts to roll out profitability and production forecasting tools within Overyield, hire more experts to the team, and ultimately plant more trees onto the 158 million acres of farmland that are suitable for tree crops in the US. This capital injection follows some serious momentum for the maturing startup. The company raised a $1.5 million seed round in 2020 and in the past year, it has doubled business while planting an additional 37,000 trees in 2022 on farms in NY, Ohio, Kentucky, and Hawaii to name a few locations as well as being awarded as a partner in a $60 million grant from the USDA Climate-Smart Commodities program.
Anouk Schoors, Investment Manager, The Nest: “Agroforestry is a crucial element in decarbonizing agriculture and has an amazing side effect of increasing financial resilience for farmers. It also requires a systems-approach to implement it on a large scale. Propagate has been the most advanced, building the platform necessary for the institutional roll-out of agroforestry, bridging gaps and forging partnerships where needed. We are thrilled to join forces with them to continue to develop the market and add another tool for more regenerative farming to the mix.”
Now the opportunity to scale agroforestry is larger than ever. With $9 trillion earmarked for funding of ESG opportunities between 2022 - 2025, and increasing commitments from corporations to reduce emissions, agroforestry is the most effective climate solution that exists today for the food & ag industry.
Steinberg notes that a 2-3x net increase in profitability per acre is possible with agroforestry. While the long term business case offers an attractive return, overcoming the financing gap is paramount to realizing agroforestry’s value. The Propagate team looked to the solar industry for inspiration, and recently launched Agroforestry Partners to support the growing industry’s project finance needs. “We have learned from the success and failures of the solar industry including marketing and policy mechanisms designed to reduce risk,” Steinberg says.
With a comprehensive platform that is already being put to work to institutionalize agroforestry, Propagate is continuing to bring its software, development and financing products to market while supporting tree crop types from shrub fruits like blackcurrant and elderberry to chestnut to timber. The team is also working on Mediterranean and tropical crops with an eye towards global agroforestry needs and plans to expand its team.
Eric Smith, Investment Officer, The Grantham Environmental Trust: “Propagate’s end-to-end approach offers a holistic experience to its partners that makes it easy to attach the climate benefits of agroforestry to the production of nutrient-dense foods.”