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Natural Fertilizers
Overview
Farmers are increasingly using fertilizers containing nitrogen to accelerate crop growth and improve yield; their use is estimated to have grown ~3.5x as great over the past 50 years. However, these fertilizers are mainly offered in inorganic form, and their continuous use can lead to air and water pollution, as well as soil nutrient depletion. Furthermore, with more consumers opting for organic products, alongside growing awareness of synthetic alternatives’ environmental and health risks, there has been a surge in organic farming practices.
Against the backdrop of shrinking agricultural land and rising demand for organic produce, natural fertilizers are an attractive alternative. However, their short history, coupled with a lack of awareness of their effectiveness, has meant that they are currently underutilized.
Industry Updates
Market Sizing
The US natural fertilizer market could reach USD 1.2 billion–2.0 billion by 2028
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Market Mapping
The industry is seeing an increasing number of players with prior expertise in organic fertilizer production focusing on biofertilizers. Several biofertilizer players are developing nitrogen-fixing bacteria. These operators are mostly in their Minimum Viable Product or Go-to-Market stages, having conducted trials proving yield improvement, but are yet to successfully commercialize their products. By contrast, organic fertilizer players have successfully brought their products to market and are in their Go-to-Market or Expansion stages.
Incumbent activity is mainly focused on organic fertilizer and nitrogen-fixing biofertilizer varieties, with limited activity surrounding biofertilizer types such as phosphate biofertilizers or plant growth-promoting rhizobacteria (PGPR).
Since most disruptors and incumbents primarily focus on nitrogen-fixing biofertilizers, this industry segment was the highest funded, followed by compost biofertilizers. Resultantly, biofertilizers on the whole have attracted more funding than organic fertilizers.
Biofertilizers: Nitrogen-fixing
Biofertilizers: Phosphate
Biofertilizers: Plant Growth Promoting Rhizobacteria (PGPR)
Biofertilizers: Compost
Organic: Animal-based
Organic: Plant-based
Organic: Mineral-based
The Disruptors
Industry dominated by biofertilizer startups despite slower adoption
More than half the startups in the industry focus on biofertilizers, with a majority focusing on nitrogen-fixing biofertilizers. Most of these startups are in the Go-to-Market or Minimum Viable Product stages and have either just commercialized or are working toward the commercialization of their fertilizer product. These companies are relatively well funded but are yet to establish a presence similar to synthetic and organic fertilizer players. In addition, the segment is also seeing an increasing number of incumbents with prior expertise in organic and synthetic fertilizer production, focusing on biofertilizers (e.g., Corteva, Hello Nature, and Agriscience).
A relatively small number of startups are focusing on organic fertilizer solutions and have reached the Go-to-Market or Expansion stages. These companies mainly target being the eco-friendly alternative to synthetic fertilizers and most have commercialized their products. These producers have already attracted a reasonably large customer base, given that farmers are relatively more aware of organic alternatives compared to biofertilizers.
Funding History
Competitive Analysis
Incumbents
Conventional agrochemical players focus on developing natural alternatives
Startups in the natural fertilizer space primarily face competition from conventional agrochemical players like Syngenta and Corteva, who are transitioning into natural alternatives. It also competes with the more established companies in the natural fertilizer space, such as Rizobacter and Perfect Blend, which pioneered the transition after focusing on organic fertilizers for over a decade.
The large agrochemical players are at their very early stages in natural fertilizer production and have mainly entered the space through acquisitions and partnerships. The established players on the other hand have accumulated the required experience in-house and are partnering with crop nutrient companies and distributors with the aim of further developing their product portfolio as well as expanding distribution. Incumbent activity is mainly concentrated on organic fertilizer and nitrogen-fixing biofertilizer types.
However, there is a lack of incumbent activity in biofertilizer types such as phosphate biofertilizers or plant growth-promoting rhizobacteria (PGPRs), implying that these are still emerging fertilizer types within the industry.
Notable Investors
