ZeaKal Inc., a startup developing technology to increase the photosynthetic capacity of crops, recently raised a little more green. The San Diego-based company closed on $10 million in funding from Toronto-based Canopy Rivers Inc., a venture capital firm that primarily invests in the cannabis sector.
ZeaKal CEO Han Chen said he was “elated” that Canopy Rivers had decided to partner with the company.
"Beyond the capital, it is further validation that PhotoSeed is a next-generation blockbuster trait that can be utilized across diverse industries,” he said in a news release.
Up to this point, most of ZeaKal’s work has focused on seed crops, such as soybeans, rice, and other grains and legumes. With Canopy Rivers’ investment, ZeaKal plans to expand its trials to cannabis and hemp. The deal will also give Canopy Rivers an 8.7 percent stake in the company and an observer seat on ZeaKal’s board.
"Plant sciences is a mostly overlooked but absolutely critical segment of the cannabis and hemp value chain, and we are seeking to address this gap with this investment,” Canopy Rivers Director of Business Development Mary Dimou said in a news release. “ZeaKal's technology has already realized success across a number of crops during field trials, and these are crops that have been commercialized for decades. The application of this innovative technology throughout the Canopy Rivers portfolio and the cannabis and hemp industry at large could be a game changer."
By allowing plants to covert more sunlight and carbon dioxide into energy, ZeaKal said its plants see increases in seed and grain yield, and higher oil and protein content. Local investors also see promise in its technology. San Diego-based life sciences ventures fund Finistere Ventures led a $3.8 million Series A round in the company in 2013 with Two Oceans and the Missouri Soybean Merchandising Council, and Finistere returned later in 2016 to lead a $5.3 million Series B round in ZeaKal.
Zeakal is one of three portfolio companies for Kapyon Ventures, a biotechnology incubator in San Diego. Kapyon focuses on developing technology startups spun out of research institutes, primarily focusing on agriculture, industrial biotechnology and cleantech. Chen also serves as the incubator’s founder and managing director.