Startup’s Recent Success Tied to Penn State Entrepreneurial Ecosystem
This article is part of a series celebrating the five-year anniversary of Invent Penn State’s LaunchBox and Innovation Hub Network. Learn more here.
In the past year, State College-based Phospholutions has grown from seven to 20 employees, and recently raised $10.3M in venture capital funding to support the development and growth of its RhizoSorb® soil-enhancement technology across market segments and expand to global markets.
Phospholutions CEO Hunter Swisher began developing RhizoSorb® as an undergraduate in the plant sciences program at Penn State. As part of an undergraduate research project, Swisher learned about the technology that had been developed and patented by one of his professors. Seeing the market potential for the technology, he worked with the Penn State Office of Technology Management to license the IP and launch Phospholutions.
“From the moment I learned about the technology in the classroom through the point of raising this round of financing, I have been supported by the incredible staff and organizations that make the Happy Valley entrepreneurial ecosystem what it is today,” Swisher said. “The Happy Valley LaunchBox powered by PNC Bank was where Phospholutions transitioned from an idea to a real company. We utilized the Penn State Law Entrepreneur Assistance Clinic and IP Clinic for everything from forming an LLC to structuring employee contracts and commercial agreements, to terms and conditions language needed for our website.”
Phospholution’s RhizoSorb® is a soil-enhancement product utilizing technology originally created in the Penn State College of Agricultural Sciences. With research showing more than half of fertilizer applied to soil is never actually utilized by plants, RhizoSorb® aims to naturally improve nutrient retention, increase plant uptake, and ultimately reduce leaching and phosphorus waste.
“Our research over the past two years has shown, among many environmental benefits, a clear cost-savings for crops like corn and soybean through reducing phosphorus fertilizer use,” said Swisher. “This year, we are focused on establishing a robust farmer network (think early adopters) to use RhizoSorb® on hundreds to thousands of acres to collect the data and testimonials for launching commercially into the broad-acre crop market in 2022.”
The recent investment round was led by Continental Grain Company (CGC) Ventures and included new investment from Tekfen Ventures, Ag Ventures Alliance Cooperative, and an individual angel investor. It also included follow-on investments from Maumee Ventures, the venture capital subsidiary of The Andersons, Inc., a diversified U.S. agribusiness, as well as Penn State-affiliated 1855 Capital and Ben Franklin Technology Partners.
Continental Grain’s Chris Abbott said, “Phospholutions has the potential to solve systemic issues around fertilizer application in several key crops. We are excited to partner with the Phospholutions team to help commercialize this technology globally, which we believe will positively impact key issues around soil health, water quality and grower profitability.”
The capital from the latest investment round is allowing Phospholutions to conduct the research and field trial program, which involves testing varying RhizoSorb® formulations in numerous crops, soil conditions, and application methods in regions across the US and internationally.
“This investment provides the capital and the partnerships necessary to bring our company and technology to the next stage,” Swisher said. “As a startup founder, there is no better outcome than being fully funded with the right partners who believe and support your vision. For us at Phospholutions, this investment round is just the beginning to making phosphorus use in agriculture more sustainable.”
As an undergraduate developing Phospholutions, Swisher participated in the Invent Penn State Summer Founder’s program, the Ben Franklin Technology Partners TechCelerator, the Happy Valley LaunchBox FastTrack Accelerator, and competed in the 2018 Invent Penn State Venture & IP Conference Tech Tournament where he won first place and $75,000.
“Over the last five years, I’ve been proudly labeled the biggest user of Invent Penn State resources,” Swisher jokes. “We immersed ourselves in an ecosystem that allowed us to design a website, develop a brand, reach advisors and early adopters, and even raise non-dilutive capital and meet investors. This doesn’t even include the immense amount of knowledge and support that came from participating in the accelerator program and Summer Founder’s program.”
Swisher also tapped into the vast Penn State alumni network, conducting early product testing on numerous golf courses operated by Penn State turf management program alumni across the US. Phospholutions has now been selling RhizoSorb® in the turf and ornamental market since 2018, but the startup has been working in the background to bring the technology to the larger market segment of broad-acre row crop production.
“As a very early investor and supporter of Phospholutions, Ben Franklin Technology Partners is thrilled that such an impressive group of knowledgeable investors has recognized the amazing potential of Phospholutions technology,” said Stephen Brawley, President and CEO of Ben Franklin Technology Partners. “We believe it has the potential to positively affect the economics for farmers while improving the environment. The sooner that Phospholutions‘ team and strategic partners can get the technology deployed, the better!”
There is a lot in store in the coming year for Phospholutions, including the development of new formulations for RhizoSorb®, expansion of their product line into new market segments, continuation of research and pilot projects, growth of their sales team to establish and support their growing distribution network, and preparation to eventually expand to an international market in the coming years.
Invent Penn State is a Commonwealth-wide initiative to spur economic development, job creation and student career success.
The Invent Penn State LaunchBox & Innovation Hub Network is made up of 21 hubs embedded in Penn State campus communities offering no-cost coworking space, makerspace, accelerator programs, pitch competitions, speaker series, access to experts and mentors, and legal and IP advice through Penn State Law clinics. Five years since opening, the Invent Penn State LaunchBox & Innovation Hub Network has supported 3,325 community entrepreneurs, created 194.5 jobs, and helped to launch 164 new Pennsylvania companies.
To find a location near you, visit invent.psu.edu/programs/pa-innovation-hubs