Animal funds

Decoy wins $2 million to bring organic controls to animal agriculture: AFN Exclusive

When it comes to crops, organics are all the rage. Could cattle be next?

from Brazil Smart Control Lure certainly think so. The Ribeirão Preto, São Paulo-based startup says it’s the first team in the world to develop biological controls to kill pests that affect farm animals – and it just raised $2 million in funding to commercialize its solution.

“We live in this moment of transition from chemical technologies to bio-based technologies,” says Lucas von Zuben, co-founder and CEO of Decoy.

“We see this transition from chemical to biological having as big an impact as analog to digital,” he said. APN. “We’re still going through this transition, and digital has opened up endless opportunities to explore. It’s the same with this transition.

$19 billion windfall for organic products

The emerging class of organic crop inputs are designed to do many of the tasks that growers have historically relied on chemicals for, but in a more sustainable way.

According to one estimate, the global organic crop input market will reach $19 billion by 2026, up from $11 billion last year. It is driven by consumers demanding more sustainably produced food, as well as farmers and agribusinesses seeking to reduce their dependence on increasingly unpredictable supply chains for agrochemicals, which have been severely disrupted by Covid-19 and the Russian invasion of Ukraine.

Startups developing these agricultural inputs – which include biofertilizers, biopesticides and biostimulants, among others – collectively raised around $892 million globally from investors last year; well over double the total of these secure solutions in 2020.

The biggest biologics funding deals to date have involved names like Rotate Biography, which works on microbial nitrogen fixation technology and scored $430 million for its July 2021 Series D round; while the biofertilizer company Organic Kula pocketed $10 million for his seed round in May, followed by a $50 million Series A haul earlier this year [disclosure: AFN‘s parent company, AgFunder, is an investor in Kula Bio.]

And just this week, Anuvia — another company developing biofertilizers for growers and gardeners — announced the closure of its $65.5 million Series D seed round.

“Biocontrols started with crops; people have [recognized] this opportunity. As we have a lot of problems not only in crops but also in breeding, we have seen [another] opportunity – and we found a way to bring this technology to animal health in a way that no one had before,” says von Zuben.

Tips for ticks

Von Zuben and co-founder Túlio Nunes both have postdoctoral academic training in chemical biology. While still working at university in 2015, the duo decided to put their specialist knowledge of pheromones into practice by solving some of the animal health issues plaguing Brazilian agriculture.

First, they sought to tackle the problem of ticks, which can cause blood loss, weight loss, infection and depression in cattle, as well as reduced milk production and quality. leather. JIt is estimated that ickies and their associated effects cost the Brazilian cattle industry up to $3.24 billion every year.

“Our first idea was to use pheromones to try to control ticks. We wanted to make a trap to attract ticks with pheromones and then somehow control them,” said Nunes, who is now the company’s chief operating officer. APN.

Ticks are known to emit pheromones to attract mates, broadcast their location to other individuals, and regulate their attachment to animals they parasitize. Nunes and von Zuben realized that the same pheromones could be used as a lure, “trickling” ticks into congregating somewhere where they could be dispatched more easily and efficiently.

“We were able to develop technology to attract them, but then we had a different problem: how to kill them,” says Nunes. “And that’s when we decided to use a biocontrol.”

While that’s where the “lure” in the company name comes from, von Zuben and Nunes ultimately decided to remove the pheromone component altogether; cows had no problem attracting ticks, after all. What was really needed was the pest control solution itself.

The biocontrol they developed uses two species of fungi that are deadly to ticks but harmless to livestock, humans and the environment. It is supplied as a liquid solution which is sprayed on cattle, as well as the fields in which they live.

“This way we can control the tick population in the environment, because only 5% of ticks [in a given area] are actually on cattle; 95% are on the ground,” says Nunes.

Image Credit: Decoy Smart Control

“Each bottle of our product contains billions of spores,” adds von Zuben. “You dilute the contents of this bottle in water and spray it on animals and fields; the spores attach to the ticks, grow, kill the ticks and make more spores, which find other ticks. So there is a chain effect.

This dual mode of application highlights one of the main advantages that biological inputs can have over their chemical counterparts. The types of chemicals used to control pests are toxic – that’s how they work – but not just to the insects or pests they target, which means runoff can cause environmental problems and put livestock, wildlife and humans at risk. Residues of these chemicals can also end up in meat and dairy products.

Another increasingly common problem with chemical-based solutions is that pests develop resistance to them, making them less effective and causing farmers to use them in greater – and potentially more harmful – amounts. von Zuben.

The co-founders claim the product has been tested on over 100,000 animals at 800 properties in their region of Brazil.

“It was very important for us because the farmers helped us to develop our product. They’ve given us a lot of feedback to incorporate, so they’re really partners in developing this product,” says Nunes.

These partnerships with farmers have also allowed Decoy to monetize the product while awaiting regulatory approval for a full commercial launch.

“We are offering them to be part of our research and make a deal [to the effect that] “You use the technology, give us the data, and if you like it, you can give us money to keep doing the research,” says von Zuben.

Expansion plans

This traction, along with the positive response from cattle farmers, caught the attention of investors. Decoy’s funding round was led by a São Paulo-based agribusiness venture capital firm MS companieswith the participation of the venture capital arm of the Brazilian Animal Health Society farmbase.

Decoy Smart Control aims to launch the livestock tick treatment next year, pending regulatory clearance from Brazilian authorities.

Other tropical cattle markets, such as Australia and India, could be targets for future expansion. In the meantime, Decoy is starting to work on new product lines.

“We are working on our portfolio. We are looking at other animal health issues: dog ticks, fleas – so pet products – and we are developing products for poultry,” says Nunes.

“We also see other opportunities; the same way we brought this technology from [crop] from agriculture to animal health, we see many other areas for biological controls – from household products to plants on your apartment balcony. »