Oct 29, 2019Startup fertilizer solution company gets $1.5M in funding
Hunter Swisher is living proof that environmental and business sustainability is not only possible, but key to the growth of his startup fertilizer solution company, Phospholutions. The 2016 plant sciences graduate from Penn State University and entrepreneur recently secured up to $1.5 million in new investment funding for Phospholutions.
“Environmentalism and sustainability are at the core of our mission,” said Swisher. “People, planet and profit – what’s known as the triple bottom line – is the future of sustainable business.”
State College-based 1855 Capital and Maumee Ventures, the venture capital subsidiary of The Andersons, Inc., a diversified U.S. agribusiness, co-led the investment round of up to $1.5 million. The 1855 Capital fund identifies and invests in the premier start-ups emerging from the Penn State community.
“We are thrilled to have the opportunity to support Hunter and the mission at Phospholutions,” said Matt Rhodes, managing director of 1855 Capital. “We are especially pleased to work with Maumee Ventures and further our mission to bring national industry support to the local start-up community.”
Phospholutions is moving to a new location in State College’s Innovation Park that will triple its office space and provide a lab. The company is also on a hiring spree. Swisher anticipates ending 2019 with 10-12 full-time employees, and growing that team to 20 through 2020.
“We are very excited to have developed our business to the point that it has attracted this level of investment to support our continued growth,” said Swisher in a press release. “This investment will provide the resources necessary to bring new developments and solutions to market.”
Spotting a problem
Phospholutions’ signature product, RhizoSorb makes fertilizer more efficient by storing applied nutrients in the soil until they can be used by the plant or by delivering nutrients like phosphorus to the soil.
“We focus on designing solutions to solve a global phosphorus problem that overcome the economical constraints that other technologies and business models cannot,” said Swisher.
Swisher learned about the phosphorus problem – and a solution – while a plant science student in the College of Agricultural Sciences.
Phosphorus is an essential nutrient for plant growth, food production and human health that is mined and used in an unsustainable way.
Recent reports show more than 90 percent of phosphorus is lost to the environment from mine to fork. More than half the phosphorus applied to plants as fertilizer is never used by the plant.
Instead, it’s wasted and runs off into the soil before the plant’s roots can absorb it. Once phosphorus reaches waterways, it becomes a pollutant, contributing to nutrient overload. Excessive nutrients lead to dense plant growth, which depletes the waters of oxygen, leading to the death of marine animals — a process known as eutrophication. Most waterways globally face eutrophication and the United States spends billions of dollars on cleanup.
The supply of phosphorus globally available to mine is estimated to last fewer than 260 years.
“Being that phosphorus is the second-largest nutrient needed for food production, this is a terrifying reality,” said Swisher.
Taking a solution into the marketplace
As a student, Swisher also learned about a patent developed by one of his professors. He saw market potential and worked with the Penn State Office of Technology Management to license the intellectual property, then set to work developing Rhizosorb and his company, Phospholutions.
Swisher licensed two Penn State patents and is the inventor on a patent that is pending.
“Our focus is to use the same technology to capture phosphorus from areas discharging into the environment and recycle it back into production as fertilizer,” said Swisher.
Swisher told his story to a gathering of government and industry leaders in late summer and explained how he leveraged resources to assist entrepreneurs from the College of Agricultural Sciences and Invent Penn State. Hard work, ideas and those resources all helped make it possible for him to launch a startup as a student. Swisher spoke at Pennsylvania’s Ag Progress Days event held in August just outside State College.
“There is no better place to go to school in agriculture,” said Swisher. “For me, it led to a career as an entrepreneur.”
With his pitch for Phospholutions, Swisher was a finalist in the 2016 Ag Springboard student business pitch contest. That summer, Swisher participated in the Summer Founders Program that provides selected student teams with $10,000 to work on their startup, social good or non-profit. Phospholutions also participated in the Happy Valley Launchbox, 15-week Fast Track Accelerator program.
Growth and commitment
Now, Swisher has landed additional financial backing to grow.
Maumee Ventures was started by The Andersons in 2014 to foster promising innovations in agriculture and other related sectors.
“Maumee Ventures works to identify products and technology that have the potential to positively impact our businesses and bring more value to our customers,” says John Kraus, vice president of Maumee Ventures and director of investor relations for The Andersons. “Phospholutions’ product and business plan directly address the need to deliver key nutrients to plants in an efficient and sustainable manner, and we are excited to include them in our portfolio.”
Phospholutions hired Chief Commercial Officer, Bob Young, who has had a successful career as an executive in multiple large fertilizer companies including the Andersons.
It continues to test RhizoSorb, which is certified by the national Organic Materials Review Institute standard for organic use.
In the midst of the company’s own quick growth, Swisher is committed to several corporate sustainability initiatives: Zero Waste at its headquarters and participating in The Phosphorus Sustainability Challenge, a broad initiative for organizations and companies to pledge reductions in their phosphorus footprint.
Phospholutions is also pursuing certification as a B Corp, a third-party certification program to verify businesses are meeting the highest standards of social and environmental performance.
“I take this belief very seriously, as what we are trying to accomplish has to be a win-win-win for our shareholders, our customers, and our environment,” said Swisher.