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Concentric Ag

by Eric Peterson on November 26, 2018, 11:33 am MST

www.concentricag.com

Centennial, Colorado

Founded: 2007

Privately owned

Employees: 70 (25 in Colorado)

Industry: Bioscience & Medical

Products: Microbe-based soil amendments

President and CEO Don Marvin is giving growers a boost with a proprietary blend of microbes.

Co-founders Dr. Margaret Bywater-Ekegärd and Ananda Lynn Fitzsimmons first connected in Quebec in 2007.

"They had an idea of how Mother Nature would assemble communities of microbes and how those communities would affect the health and yield of a plant," says Marvin. "That was the genesis of the company and remains the focus on the company today."

Fitzsimmons is a self-taught biologist. "I call her the queen of compost," says Marvin. "That led to our first product."

In the beginning, the founders took a low-tech approach to R&D. The brew included 10 microbes and a process that was "very similar to brewing fermentation," says Marvin. "The first products were made by Ananda in a plastic vat stirred with a broom handle in an apple barn overlooking the Green Mountains in Vermont."

But industry experts originally scoffed at the potential of commercializing the concept. "They said, 'Nice idea, but that's never been done before and you're pushing the limits of the laws of physics.'"

Marvin says Fitzsimmons and Bywater-Ekegärd persisted in their quest to commercialize the idea, releasing the company's flagship product, Synergro, in 2015.

The product has living microbes that make more phosphorus and potassium available to plants. "Those nutrients are sitting there in the soil, but they're locked up," says Marvin. "Essentially, we stimulate certain parts of the plant that turn on those mechanisms of action." Numerous field studies have found that Synergro increases yield -- often by about 30 or 40 percent -- as well as fruit size and plant health.

Upon Synergro's launch, the first target was specialty agriculture. "We went to the organic growers first, because they don't have as many tools in their toolbox," says Marvin.

By the end of 2015, Synergro had taken off with traditional growers in the Southeast, then Concentric pushed west in 2016. "We started seeing a lot of traction in California," says Marvin.

That propelled dynamic growth. In 2014, the company had four employees. Four years later, that number is 70, with facilities in Centennial, Montreal, and Manitoba.

Photo courtesy Concentric Ag

The second product, Synergro Free, is a similar product that's filtered at the end, removing the live cells that are in Synergro. "We take out all of the active microbes," says Marvin.

That makes it viable for broadacre crops, as it's easier to ship and more cost-effective, he explains. "It's going to be introduced to the market next year [2019] in Canada and the United States."

Manufacturing currently takes place in both locations in Canada. From the apple barn in Vermont, "We brought [the manufacturing process] inside and industrialized it," says Marvin. "It's all under computer control. . . . It's very sophisticated."

The 35,000-square-foot headquarters in Centennial came online in summer 2018, right after it changed its name to Concentric from Inocucor.

Cycle Capital Management of Montreal invested in the company in 2014, the same year Marvin joined the company. "It allowed them to look at real markets and to attract a CEO who had been there and done that before."

That CEO was Marvin. Part of his charge was continued fundraising, as he'd raised about $400 million in his career. "The company was bootstrapped before that," he says. "We met at French bistros in Montreal for staff meetings."

Marvin says Concentric has raised about $70 million in venture capital to date, and pegs current revenues at "low double-digit millions," with annual growth topping 10 percent. "We are still a loss-making operation, but we expect to be profitable by the end of 2020."

The founders have transitioned out of the company, but remain active shareholders. "They said, 'We have taken this company as far as we can. We really need professional management to take it to the next level,'" says Marvin, "A lot of companies come to that conclusion too late."

Touting the board of directors (which includes Dr. John Elstrott, former chairman of Whole Foods), he adds, "We're building a real company here."

With a long career in biosciences and ag-tech, Marvin speaks from experience. "This is my fourth trip to the rodeo," he says.

Photo courtesy Concentric Ag

His third, IdentiGEN, used DNA to track food from farm to plate. Marvin moved to Colorado when he was splitting time between Lawrence, Kansas, and that company's headquarters in Ireland. "It was a strategic location for me to come to Colorado," he says. "It took me a while to get here, but I'm not going anywhere."

It follows that he planted the flag for Concentric's headquarters in Centenniall. The Colorado Economic Development Commission authorized a tax credit for the facility, which will also house labs for product development and commercialization, based on job creation.

Marvin isn't ruling out a manufacturing facility in Colorado in the future. "We'll move manufacturing around," he says. "We may have manufacturing in Denver yet. We may have manufacturing in other parts of the country."

He says he has a personal connection to Concentric's mission. "I grew up on a farm in northeast Ohio, so I know what it's like to walk in a farmer's shoes. Fifty years ago, farmers had a second job in order to make ends meet for their families Today, they still have a second job. They just have a passion for farming."

Same goes for Concentric. "Everybody you run into inside our company," he says, "they have a passion for what they're doing."

The bigger picture: Many fertilizers and pesticides are overused, and feeding the planet is getting trickier. "You need to bring in another domain, and biologicals are being adopted," says Marvin. "You're not going to get it out of traditional agriculture. There has to be other ways to do it."

And Concentric offers a good one. "It's clean. It's green. It's safe for people and animals," he says. "We build up the soil health. Soil health has been destroyed over the years."

Challenges: "To me, it's finding great people," says Marvin, noting that the company's location has proven a great tool for recruitment. "It's worked out so far."

Concentric's microbial products are regulated, which can lead to issues when shipping internationally: Shipments sometimes end up in quarantine en route to the Centennial warehouse from Canada.

Photo courtesy Concentric Ag

Opportunities: "We're in the biologicals space," says Marvin. "The biologicals space is one of the most exciting agriculture spaces out there." The global market is enjoying a healthy growth rate around 15 percent a year, and is expected to top $12 billion by 2022.

"Our growth strategy is a combination of organic growth and strategic M&A," says Marvin. The company's first acquisition was Manitoba-based ATP, a manufacturer of micronutrients. "We're very happy about them joining the Concentric family," says Marvin, noting that the company has about "two dozen" acquisition targets and another deal should close by early 2020.

"We'll probably take another trip to the equity markets at that time." "When that door is open, you need to build critical mass on the other side."

Exports are another potential driver. Marvin says Europe is a target market. "Spain is a very large specialty agriculture region which feeds a lot of Western Europe," he notes.

Needs: Talent. "I expect we will be at 90 to 100 employees in the next 12 months," says Marvin. "The bulk of those new hires will be in Colorado."

And the $70 million of venture capital raised to date is just the beginning, he adds. "My guess is we'll raise another $100 million, maybe another $200 million."

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