A Raleigh startup trying to fight climate change – one hog farm at a time – is raising $3 million to turn a liability into a resource for farmers across the globe.
Phinite mines and manufactures fertilizer from manure. The name comes from the idea that phosphorous is a finite resource – “we seek to make it renewable,” founder Jordan Phasey said.
Phasey said the scope of the problem Phinite is solving is huge – that half of the world’s population is relying on synthetic fertilizer for the food they eat, fertilizer produced in ways that are fueling the climate crisis. Nitrogen fertilizer is the biggest contributor to greenhouse gases from agriculture, he said. But yet animal farms across the globe are creating the world’s biggest renewable source for sustainable fertilizer.
“Animal farms across the U.S. produce $5 billion of fertilizer every year. … a $5 billion annual recurring revenue opportunity being able to capture that resource, turn it into valuable material,” he said. “But right now, about 70 percent of the value of that resource is being wasted.”
Phasey is Australian, a water and wastewater engineer who, until a few years ago, was working in the middle of the outback, treating drinking water for remote aboriginal communities spread across the Northern Territories. There, he became passionate about phosphorous sustainability and finding ways to make money from treating waste streams. He developed three technologies to mine fertilizer present in sewage, but after analyzing the economics, shifting to agriculture – a more concentrated resource and a larger opportunity.
But livestock farms in his region were few and far between.
In 2016, he flew to the U.S. after receiving an award from a tech competition put on by the U.S. Environmental Protection Agency (the Nutrient Recycling Challenge). While at the White House receiving the award, live stock farmers from Smithfield Foods asked him to visit their operations in North Carolina.
In 2018, he founded Phinite off those ideas he’d developed – and he decided to concentrate on North Carolina’s hog farm industry. He won an N.C. Idea grant, assembled a seed round from local investors like Oval Park Capital, and started building. The technology, now in its third iteration, is a scaleable solution he hopes will “turn a liability into an asset” for North Carolina.
“The company is not profitable yet, but the unit economics for the mining operation are,” he said.
North Carolina is just the start for the eight-employee venture. He sees potential in other agricultural markets, from California’s organic farming to swine and dairy in the Northeast.
The latest fundraise had its first close last week, at nearly $1.3 million. Phasey said so far the company has $2.3 million of the planned $3 million raise committed.
The dollars will be used for working capital, growth, “and to get us to profitability,” Phasey said.
According to securities filings, including a nearly $300,000 equity raise in 2021, the firm has raised nearly $1.6 million in outside capital since its inception.