Dealflow | October 12, 2022

Propagate scores $10 million to help farms transition to agroforestry

Roodgally Senatus
ImpactAlpha Editor

Roodgally Senatus

ImpactAlpha, October 12 — Agroforestry, the integration of trees in agricultural production, promises to sequester carbon, decrease erosion, reduce nutrient loss and increase biodiversity.

New York-based Propagate has raised $10 million to make it easier for investors to fund low-risk agroforestry projects and help farmers transition acreage to agroforestry.

The company offers farmers, agribusinesses and agri-service providers software for regenerative farm planning and management, commercial agroforestry development and equity investments for agroforestry transitions.

Propagate’s Ethan Steinberg says the company has “built an ecosystem that can commercialize an industry.” Propagate and other regenerative ag ventures and investors convene this week at the Regenerative Food Systems Investment Forum in Denver (ImpactAlpha is a media sponsor).

Regenerative ag

Belgian impact family office The Nest led the Series A round, alongside Agfunder, the TELUS Pollinator Fund for Good, Techstars and the Grantham Environmental Trust’s Neglected Climate Opportunities Fund. The investment will help Propagate roll out a profitability and production forecasting tool.

Agroforestry projects

Last month, the U.S. Department of Agriculture announced a $60 million award to Propagate, The Nature Conservancy, Climate Finance Solutions, Appalachian Sustainable Development and other environmental partners to transition 30,000 acres in 39 U.S. states over five years.

The funding “will catalyze significant private investments into the industry and increase farmers’ incomes while simultaneously expanding carbon sequestration, soil health, biodiversity and water quality,” Propagate’s Audrey Epp Schmidt.

Two-third of the USDA award will go towards incentivizing tree planting and creating a national network of demonstration farmers for education and outreach, as well as new financial mechanisms and business models to attract private and institutional capital to agroforestry projects.