Qualterra Raises $4.5m to Turn Organic Waste Into Carbon-trapping, Crop-boosting Biochar

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Qualterra’s carbon-trapping biochar being applied to an apple orchard. (Qualterra Photo)

There’s a pleasing circularity to Qualterra’s ag-tech operations. The Eastern Washington company takes crop and forestry wastes, applies a patented technology to convert the organic debris into biochar, and uses that material to more efficiently grow the next generation of apples, hops, grapes, potatoes, and other produce.

The Pullman, Wash.-based business recently raised $4.5 million and plans to launch the sale of biochar carbon credits. The company last month also announced its move into seven acres of high-tech greenhouses, allowing it to increase its plant production 10-fold.

“We’re going through an exciting transformation as an organization right now,” said Mike Werner, CEO of Qualterra.

Biochar is a substance akin to charcoal that traces its roots to ancient civilizations in the Amazon and beyond and has been gaining traction as a carbon removal solution to address climate change. It’s typically made through a process called pyrolysis, where organic material is heated to a high temperature in a low-oxygen environment, creating a solid carbon material.

Qualterra can convert 20 types of feedstock into biochar, including wheat straw, timber waste, orchard residue, seeds, nuts, and husks. The company is methodically testing the benefits of the biochar with 13 crop types in three U.S. states.

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Biochar isn’t a fertilizer but creates a soil environment that supports helpful micro-organisms and significantly reduces the amount of water needed for irrigation. Applied correctly, it should provide soil benefits for hundreds of years.

“It really facilitates the right type of environment that plants need,” Werner said, adding that the biochar is “improving the efficiency and the effectiveness of soils, and doing it in a way that’s economically viable for our farmers and growers.”

Qualterra sells biochar and biochar production units.

Another Washington startup, Myno Carbon, is turning wood waste into biochar.

Qualterra formed in 2021 when NuPhY, a company providing genetic testing for crop diseases as well as plant and fruit tree production, acquired Ag Energy Solutions, which focused on biochar and renewable energy systems. It employs 38 people, and its headcount could more than double this year, Werner said.

The company still provides farmers with rapid, molecular testing to screen for infections. One current concern for growers is “little cherry virus,” which produces small, less sweet cherries and can be detected in diseased leaves.

Qualterra also grows apple, cherry, grape, hops, and rose plants for farmers to transplant and for nursery sales. Its labs use agricultural biotechnology to confirm the genetic profile of the plants and verify that they’re disease-free. The plants are offered in soil that’s enriched with their biochar.

“It allows us to bring all of our technologies together,” Werner said.

The Cowles Real Estate Company, a Qualterra partner, recently purchased the state-of-the-art greenhouses and other facilities that the startup has moved into. Qualterra is leasing the space, which is in the heart of an agricultural community in Mabton, Wash.

Werner has held leadership roles in software, asset management, real estate, and sales and marketing. He became CEO of Ag Energy Solutions in 2020 and then Qualterra following the acquisition.

The company’s chief scientist is Amit Dhingra, a former professor at Washington State University and currently the head of the Department of Horticultural Sciences at Texas A&M University. He’s also CSO for Ryp Labs, a Bothell, Wash., startup working to prevent the spoiling of produce.

A Qualterra scientist at the company’s molecular plant testing lab in Pullman, Wash. (Qualterra Photo)

While Qualterra has raised new funding, venture capital investments in the global ag-tech sector totaled $6 billion last year, wilting from a peak of $13.9 billion in 2021. The slide reflected investment declines across the economy. A new analysis from PitchBook was a bit rosier, saying the field showed “resilience among economic headwinds” and reported that the strongest segments in the sector are precision ag and ag biotech.

Washington state ag-tech companies raked in some of the 2024 investments. Carbon Robotics, a Seattle precision-ag company, raised $70 million in October and recently announced a new line of AI-powered robots for destroying weeds. TerraClear raised $15 million last year to fund its AI-enhanced rock-mapping-and-removal technology for farmers.“The sector’s focus on addressing critical issues such as climate change and food security positions it for steady growth in the years to come,” according to PitchBook.

With multiple locations in Washington, Werner said the company is eager to work alongside its customers and plot its own growth.

“Making sure that the technologies align with the values and the needs for the farmers is critical,” he said. “So when you think about the technologies that we’re trying to deliver — whether it’s plants or molecular diagnostics or biochar biomass processing — that’s why we’re spending time with farmers.”