LONDON: Agronomics’ portfolio company GALY CO. has closed an oversubscribed US$ 33 million Series B financing led by Breakthrough Energy Ventures LLC, with additional participation from new investors H&M Group Ventures and Industria de Diseño Textil, S.A. (through Mundi Ventures).

Founded in 2019 with a mission to find ethical and sustainable agricultural solutions, GALY Cotton is the company’s first product targeting conventional cotton practices. GALY Cotton is a new material that fully replicates traditional cotton in quality, retaining its exact attributes because it originates from an actual plant, all while offering ESG benefits, customisable quality and a clear roadmap to reach cost parity.

The funds from the Series B round will primarily fuel the expansion of GALY’s research and development on its innovative cellular agriculture platform and its flagship product, GALY Cotton, which uses 99% less water and 97% less land than traditional cotton while emitting 77% less CO2, as it advances towards pre-industrial quality and scale.

GALY explains that it has also secured millions of dollars in proof-of-concept agreements with top industry players and a 10-year, US$ 50 million offtake agreement with Suzuran Medical Inc, a Japanese medical supplies manufacturer, for the sourcing of GALY Cotton.

In aggregate, Agronomics has invested US$ 1.5 million in GALY across its Pre-Series A and Series A rounds. Subject to audit, Agronomics will, as a result of this Series B round, carry this position forward at a book value of £2.6 million representing a MOIC of 2.2x and an IRR of 28.0%. Agronomics now holds an equity stake of 3.3% in GALY on a fully diluted basis, accounting for approximately 1.6% of Agronomics’ last stated Net Asset Value on 30 June 2024.

Luciano Bueno, GALY’s CEO, said: “We are thrilled to have investors who recognise the crucial role that our climate adaptation technology will play in our daily lives. Climate change exposes the fragility of agricultural supply chains, and the recent rise in cocoa prices is a stark reminder of the new normal we face. Unfortunately, it’s not a matter of ‘if,’ but ‘when.’ Soon, the world will face increased volatility in conventional agriculture due to more frequent extreme weather conditions. When that time comes, GALY will be ready, better equipping our economy to withstand these shocks.”

Jim Mellon, Co-Founder and Executive Chair of Agronomics, said: “The production of cotton accounts for the largest uses of water and pesticides of any agricultural product, and GALY, with its biomanufacturing cotton, is offering a sustainable solution which could reduce the environmental burden of cotton production across multiple industries such as medical supplies and textiles. This announcement is an exciting milestone for GALY and we are excited to see them enter a new stage as they scale up production and work towards commercialisation.”

GALY is a climate tech company dedicated to developing novel cellular agriculture products. Starting with cotton-which accounts for 2.5% of the world’s total arable land, consumes 25% of the world’s agrochemicals, requires an estimated 10,000 litres of water per kilogram produced, and faces traceability issues due to unsafe labour conditions-the company has successfully developed a minimum-viable product and is working on both enhancing the product’s quality parameters and scaling up production.

Recognising the potential of its platform through its work with cotton, GALY has expanded its foundational technology to other crops in industries such as food and beverages, among many other possibilities.