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Iyris raises $16 million to help grow fresh produce in harsh climates

2023 was the hottest year on record, but it doesn’t look like it’s going to cool down anytime soon. Rising temperatures are making it increasingly difficult to farm in a region that was once a major agricultural resource, with heat and drought severely affecting crops.

For most farmers who rely on traditional methods and don’t have access to high-tech greenhouses, the need for adaptable, ready-to-use solutions is paramount. This is where agritech companies like Riyadh and Delaware-based Iyris come in. The startup, which provides a lifeline to farmers and helps them meet the challenges of climate change through its agricultural solutions, announced $16 million in Series A funding.

Executive Chairman John Keppler told TechCrunch that the funding provides Iyris with ample capital “to continue to scale and grow the business, solving the extremely difficult problem of growing fresh produce and increasing crop yields in the face of climate change and increasing temperatures, heat and drought.”

Ecosystem Integrity Fund (EIF), a San Francisco-based climate and sustainability fund, led the round, with participation from Global Ventures (which also invested in a $10 million seed round led by Aramco subsidiary Wa’ed), Dubai Future District Fund (DFDF), Kanoo Ventures, Globivest, and Bonaventure Capital.

While much climate tech coverage focuses on expensive, powerful technologies that may be fit for purpose but difficult to adopt, Keppler said Iyris is targeting the world of low-tech and medium-tech. Farmers in this space use protected agricultural methods such as polyethylene mulches, acrylic, shade nets and screens to mitigate the environmental impact of large-scale crop production. These methods, which include fields and tunnels, are designed to limit ecological damage while being more accessible and widely used, Keppler explained.

Promoting commercial agriculture in a hotter world

Iyris was born out of innovative technology developed at King Abdullah University of Science and Technology (KAUST) in Saudi Arabia. Founded in 2018 by CEO Ryan Lefers, an agricultural engineering expert, and plant scientists Mark Tester and Derya Baran, the company, formerly known as Red Sea Farms, initially used its heat-insulated technology to grow and sell tomatoes in the Middle Eastern country, and later commercialized and sold the technology to other farmers.

Iyris’ flagship technology, called SecondSky, involves adding an additive during the polyethylene manufacturing process. The additive blocks near-infrared radiation, significantly reducing heat while allowing photosynthetically active radiation (the light that plants need to photosynthesize) to pass through. To describe this, Keppler explains that if you compare standing under a conventional polyethylene roof to one with the additive, you’ll notice a significant difference in temperature due to the additive’s insulating properties.

Iris
From left: Derya Baran, Ryan Lefers and Mark Tester.

This means farmers can reduce cooling costs, water usage, and electricity usage to manage agricultural growing conditions on their farms. This allows these farmers to plant earlier and extend the growing season, which results in higher yields and better plant health (plants use energy to grow and produce fruit, rather than growing more leaves to transpire). The six-year-old startup claims that its proprietary technology, including resilient plant genes, can reduce energy and water consumption by up to 90%.

“Through a series of tests, we found that yields improved dramatically,” commented Keppler, the investor-turned-executive chairman. “In fact, according to some of our customers, who are among the largest growers in the world, these are some of the only innovations in this field in the last 30 or 40 years. So it makes growing crops in difficult conditions much easier and more profitable.”

Iyris was initially developed near KAUST and has since flourished in the UAE, Egypt, and Morocco. These regions, where desert agriculture is the norm and crop-growing conditions are harsh, are ideal for testing and proving the technology’s effectiveness. However, as climate change intensifies, similar challenges are emerging around the world, prompting adoption of Iyris’ technology in places like the United States, Portugal, Spain, and Mexico. Keppler said major fresh produce growers in these regions are looking to mitigate new climate challenges and adopt solutions that have proven effective in harsher climates.

Ensuring food security in the GCC and other drought-stricken regions

He added that SecondSky’s ability to reduce input costs and, most importantly, extend the growing season has attracted some growers from drought-stricken areas. These farmers and growers using SecondSky can continue to produce when their competitors cannot, allowing them to demand higher prices and make more money. Keppler claims that purchasing SecondSky products can pay for itself within a year.

“As a result, the growers we serve have regular product replacement cycles, with product lifespans typically ranging from three to five years, depending on region and application. These replacement cycles create a recurring revenue stream for the suppliers of these materials,” he explains. “We sell our products to growers through local distributors and provide our additives to manufacturers and distributors who embed them into their products. While our products are more expensive, the benefits to growers pay for themselves within the first year of the crop cycle.”

Saudi Aramco-backed Climate Technologies works with two broad customer segments: large international growers that operate farms around the world, and smaller growers and farmers reached through manufacturing and distribution partners. The company sells SecondSky polycarbonate, polyethylene, netting and upcoming sun screens to customers in 11 countries, including Turkey and the U.K. Its customers include Silal, Armando Alvarez Group and Criado & Lopez.

Kepler believes that there is currently limited competition in the horticulture space. In recent years, companies such as AppHarvest and AeroFarms in the United States have at times gone bankrupt despite raising hundreds of millions of dollars, which shows how difficult it is to run a vertical farming business. The executive chairman pointed out that one reason Iyris is still in business is that it proved the effectiveness of its technology by using it internally, and ultimately won the trust of other growers.

“Innovative agriculture at scale, commercial scale, has been attempted many times before. In some cases, those solutions are correct. However, our thesis is that it is often more effective to provide direct solutions to existing agricultural infrastructure using existing supply chains,” noted Keppler, former founder and CEO of wood pellet producer Enviva until that company’s recent bankruptcy. “That way, farmers don’t have to change their behavior. They can continue to do what they do best — growing produce in their particular region. Our goal is to make it easier for them, extend their growing season, and increase their profitability in the process.”

Iyris, which serves the global greenhouse cover market and has more than $6 billion in recurring annual sales of greenhouse covers, attracted more customers and sold more products (or revenue) in the first quarter of 2024 than in all of 2023, according to Keppler. He added that the company will seek to improve other metrics, such as total acres covered by SecondSky, service areas (expanding to countries such as India and China), and acres of product installed for customers.

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