University of Waterloo: Growing innovation in the agriculture sector

Danielle Rose weighs leafy greens in Velocity’s development lab while her colleague prepares samples for whole genome sequencing. It’s an unusual sight in the buzzing space amongst fellow tech founders.

Rose is currently growing several plant crops that her startup, Ceragen, is trying to improve. What makes her plants unique is a microbial technology that promotes growth and helps to increase crop yields.

Ceragen is a biotech company that is innovating Canadian agriculture and has the potential to transform the global agriculture sector. One of their first products for lettuce crops only just launched in September 2021, but Rose and her co-founder have already drawn the attention of Forbes, recognizing their scientific breakthrough on the 2023 North American 30 under 30 Science list. They are now focusing their attention on eight additional crops, including kale.

“Our primary focus is developing products for hydroponic fruit and vegetable production,” Rose says. “Greenhouses and vertical farms that use hydroponic systems can grow over 10 times more food per acre and use up to 90 per cent less water than conventional farming techniques. Our goal is to help further increase the sustainability of hydroponic production by increasing the amount of food the farmers can produce with the same resources.”

Combining engineering with traditional science
The Velocity startup is based on fundamental research conducted by their technical advisor Dr. Bernie Glick, who is a professor emeritus at the University of Waterloo. During her time as a grad student at Waterloo, Rose conducted market research on the industrial potential of using plant growth promoting microbes to develop probiotics for plants. These probiotics are applied to the roots of the plant and help improve both plant growth and food production. After forming Ceragen, she began to further research how different combinations of microbes designed for specific crops could help the plant grow better. These products work by improving nutrient uptake and regulating plant stress.

Rose knew that this solution could solve a critical problem in the agriculture sector as more operations look to scale their crop productions to meet increasing consumer demand.

The preliminary research that was done at Waterloo laid the foundation for the technology,” Rose says. “In order for us to take it out into industry, we needed to incorporate engineering principles to help us scale it up.” She enlisted help from her brother, Matthew Rose (BASc ’21), who had just completed his undergrad in Mechatronics Engineering at Waterloo. He became Ceragen’s Chief Technology Officer and co-founder. Together, they implemented a bioinformatic pipeline that incorporates machine learning to bring automation into their science lab.

Partnering with big agriculture for R&D
Ceragen was incorporated in April 2021 and already has two products, ACCelerate and FerraGrow, on the market for use with hydroponic tomatoes and lettuce.

Ceragen has achieved fast success in part because they’ve integrated growers throughout the research and development (R&D).

“We welcomed several growers to be part of our R&D to make sure that our products provide value and meet their needs. We wanted to know what the most commercially relevant plant traits to growers were, and what improvements provide the most economic value to them,” Rose says.

They have several ongoing commercial pilots for their two existing products and are already seeing great success.

“Our ACCelerate product has shown 10 per cent average yield increases in commercial hydroponic tomato production, and our FerraGrow product has shown on average 20 per cent yield increases in hydroponic lettuce,” Rose says.

“In the end, we have a tailor-made solution to a problem the growers are facing. And for me, that’s the best way to do science.”

Turning science into a business solution
Ever since Rose was a child, she knew she wanted to start her own company. “I have also always been environmentally conscious, and I want to make a positive impact on the world and leave it better than I came into it,” she says.

Combining her love for biology and microbes with her business passion is what led her to pursue her grad studies at Waterloo.

“The school I did my undergrad at doesn’t have the same startup infrastructure as Waterloo has. Hearing about the community and resources available at Waterloo, I knew I needed to come here for my masters.”

Rose began attending Wednesday night workshops at Concept — Velocity’s innovation hub at Waterloo that helps turn ideas into businesses.

“I learned how to evaluate the commercial viability of an idea and how it plays inside an ecosystem. It’s great to have a cool science idea but until you understand the business side of it you can’t make a real-world impact with it,” she says. “We need to teach the business side of things to scientists. I think that is what Waterloo does well.”

The other big draw for Rose was Waterloo’s creator-own intellectual property policy that allows researchers to commercialize their discoveries.

In 2021, Ceragen became a resident member of Velocity — where Rose and here team are currently working to develop new microbial products. But Velocity is more than a space for her lab, it has been a network of support and her first investor. Velocity is Canada’s most productive incubator and has helped scaleup more than 400 companies.

“Velocity has provided me with world class mentorship and advice that has been fundamental to pushing Ceragen forward. They have given us a fantastic space and early investment. The lab facilities and equipment that we have access to would cost us a significant amount of money as a deep-tech biology company. Velocity has allowed us to scale and realize the impact I know we can make in this sector.”

The future ahead
With two products launched and several more on the horizon, Rose is looking forward to expanding sales in Canada and the U.S.A. and developing new products for additional crop types. As Ceragen continues to scale up, Rose cites two key elements that are critical to their success.

“You need product market fit and a great team. Product market fit is what drives the rapid growth of a company from a sales point of view. A great team full of people you can count on is how the company continues to drive growth beyond what founders could achieve on their own.”

Funding is also a critical factor, but one that is often difficult to secure. “It can be challenging in Canada to get initial funding for technology development when you are just starting out. Matching funding programs are amazing, but only if you have some initial funds to start with,” Rose says.

Continued investment is therefore essential if Canada wants to see continued growth within its innovation ecosystem. “I think additional grants in the $250K to $500K range for initial commercial development would go a long way to getting more startups to a point where they are ready for institutional investment.”