392 Toby Parkes - Mapping the underground fungi world by building a unicorn

In order to save and more importantly restore biodiversity we don’t need biodiversity or carbon credits; we need biologists to find super profitable business models within the magical deeply complex world of nature. It's the case of Toby Parkes, founder and CEO of Rhizocore, with whom go deep into the third, mostly ignored, and much more complex kingdom: fungi. 

We talk numbers that matter to forest managers: commercial sites often lose 15–25% of trees in year one, native mixes 35–50%. Across 70+ sites, Rhizocore’s locally sourced pellets consistently cut losses in half and add roughly 20% in height and girth, with outsized benefits under drought. We also explore the bigger vision: a frozen library of hundreds of strains that powers not only forestry but new lines like nutrient capture from farm runoff and wastewater. Think high-throughput screening for fungi that strip nitrates and phosphates fast, plus future prospects for enzymes and therapeutics- practical ways to put ecology on the balance sheet.

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In Investing in Regenerative Agriculture and Food podcast show we talk to the pioneers in the regenerative food and agriculture space to learn more on how to put our money to work to regenerate soil, people, local communities and ecosystems while making an appropriate and fair return. Hosted by Koen van Seijen.

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Chapters

• 0:00 Template
• 1:13:19 What is the one thing smart investors, who want to invest in
• 1:15:14 What would you do if you were in charge of a 1B investment
• 1:17:20 If you could wave a magic wand and change one thing, what

Transcript

SPEAKER_01: 0:02

This episode is made possible by our investment syndicate, Generation Re, where we invest together in early stage regenerative food and agriculture businesses, like this one. Find out more on genre.land. This is the Investing in Regenerative Agriculture and Food Podcast, where we learn more on how to put money to work to regenerate soil, people, local communities, and ecosystems while making an appropriate and fair return. Welcome to another episode. Today with Rhizocore Technologies, who produces locally adapted mycorrhizal fungi to enhance tree planting success. By working with native fungi, they offers a sustainable solution to accelerate woodland regeneration, improves forest productivity, and increase natural cap benefits. Welcome, Toby.

SPEAKER_00: 0:45

Nice to be here, Coop.

SPEAKER_01: 0:47

And already fungi fungi. We're not gonna spend an hour talking about how to pronounce it. I'm not sure if there is one. I think we talked to about it with Toby Kears, and I'm not sure if we got anywhere. Anyway, we're gonna spend an hour talking about definitely Mycorrhiza, but also about business models, about mapping fascinating underground that we know so little about. I think there's many places we know much more about, probably the moon. And we're very proud we are with Generation Re, our syndicate and investor in this round. And we're very happy to be on board. It led to a lot of excitement within the group, by far the biggest deal we've ever done. So I also want to thank you to make space for us, slightly a chaotic syndicate, and I'm looking forward to unpack a lot of this in the next hour or so.

SPEAKER_00: 1:30

Likewise, and we're very excited to have the whole community on board with us.

SPEAKER_01: 1:35

The whole community and a few, definitely. And to start with the beginning, not the beginning, but we always love to ask a question because there's so many other careers out there that you could choose. And we have the fortunate experience to have, of course, many people that have different options, optionality, let's say, in their lives, and they choose to spend most of their waking hours, in this case, being very busy with mycorrhiza, with pellets, with trees, and with regeneration. How come you spend most of your waking hours around these specific topics?

SPEAKER_00: 2:04

Yeah, so I guess my interest in the kind of ecological world has been there kind of from the start with me. I spent my early kind of years in the mountains as much as possible, in nature, in landscapes, becoming very apparent about aware of what's around me. And as I got increasingly older, living in the UK, I became increasingly aware of how degraded a lot of the system ecosystems and landscapes that I found myself in once thinking that these were quite beautiful places, suddenly becoming quite sad at the state of them.

SPEAKER_01: 2:37

So I think sorry to interrupt, but how did that dawn on you in terms of we all suffer from this moving baseline syndrome? Like we see a landscape in our lifetime and think, oh, that's pretty okay. And actually, it's like severely degraded, but because it moves slow or sometimes not so slow. But what was it that you see an old movie, old stories, or how did you realize this was actually quite a degraded landscape, even though you liked it?

SPEAKER_00: 2:59

There was a number of things. I think part of it was just ecological training. I was spending quite a lot of time out with various different mentors, interesting people who'd studied ecology all of their lives in various different disciplines. Some of them were mycologists, some of them botanists, some of them entomologists. I volunteered out with the wildlife trusts at various different points when I was going through secondary school. So I found myself in landscapes in around Shropshire where I grew up, doing this kind of stuff and became very aware about land uses and land management practices and how they kept successional processes in check. In fact, I once remember going out and volunteering with one of the organizations that was a conservation organization, and we were doing a whole bunch of stuff. We were actually doing grouse counts out on some of the moors up in Shropshire. And I was quite naive at that point. I must have been about 14, 15 years old, thinking, oh, this is great doing kind of count and a native species, bird loads are good. And then I made the mistake of asking the ranger who was looking after, and this was a wildlife organization and charity. At the end of it, I was like, oh, cool. So what are we learning from these numbers? And he was basically like, Oh, that's just so that if we reach a shed threshold, some the birds can get shot. And I remember that dawning on me, and then thinking back at some of the other practices that had been going on on the side.

SPEAKER_01: 4:17

So did you take away a few of the counts that were like, oh, let's do zero here. I was at the shape.

SPEAKER_00: 4:27

But I remember just thinking, oh, because we had been doing a bunch of management practices to keep that in a kind of heathland state, removing a couple of saplings that were coming up and stuff like this. So the ecosystem was starting to regenerate, but it was being kept in check for, in theory, conservation reasons for one species that we were then actually was a game bird. And I remember this kind of dawning on me at that point and understanding that like landscapes need to be used by all aspects of the community, like community and culturally, historically. But there's a balance that I think needs to be struck, and the UK is very unbalanced in terms of the little tiny fragments of net native natural habitats that we have left in dominance for human-dominated landscape, whether that be agriculture, upland moors, sheep farming, particularly in upland areas in the in the UK, you'll find most of our mountains are dominated by grazing. If you're in England and Wales, mainly by sheep, in Scotland, mainly by deer. And that's due to kind of management practices that we've had, removal of predators on the landscape, these types of things that have had monumental effects in terms of what ecosystems persist. And I remember walking through once in kind of the West Welsh coast in this magical landscape where you couldn't really see much because the sea mist had rolled in off the Welsh coast. And we were in this temperate Atlantic rainforest pocket. And when we were out in the hills and you could see lichens, particularly a lot of the old men's beards, which are like these dangly lichens that come off branches, and the trees were covered in epiphytic ferns. And you go, Oh, I am actually stood in a rainforest ecosystem in the UK. And for those of you who don't know, rainforest basically means any ecosystem where plants grow on other plants known as epiphytic plants. And typically that means they're wet enough, but they're ancient enough habitats to have this going on. And the UK's west coast used to have quite a lot of this temperate Atlantic rainforest, and it's now one of, if not the most endangered habitat that we have left on the planet. And I remember going, wow, this is what most of this part of this whole strip of the country from Cornwall all the way up to the west coast of Scotland looked like. And then getting a bit sad being like, ah, I've grown up in a point in history where the UK is probably at its least biodiverse that it ever will be. And since in the last 20 years, there's been quite a lot of restoration schemes in the UK that are starting to increase the diversity in certain sectors that we have. And I think that's my driver, like walking through the landscapes and going, okay, I'm actually going to be in a generation in the Western world that will improve, hopefully, the landscapes, the ecosystems, the biodiversity that we have, and thinking, wow, what an opportunity that is to live in one of the first generations that might actually be improving things, rather than my parents' generations who've lived through the kind of worst decades of loss that exists throughout there. And that's in a Western world. Unfortunately, most of I would say tropical regions of the world, there's a lot of countries that haven't been that developed, are going through a degradation period. And hopefully we will learn a bunch of lessons from the Western world that will change that. But that's where my journey really started. And then I got into ecological theory, systems thinking in terms of biological and ecological systems when I was at university is where I first really came into contact with the plants and the botanical world as a kind of discipline. Got fascinated with plants and fungi and evolutionary biology, and basically how organisms that are sessile or stuck in place evolve and adapt to different things. Thought they were amazing. Thought that all of my peers that thought they were uncool up until that point had been sold a complete lie. And then did a bunch of work on those types of species and got fascinated by these underlooked organisms, plants and fungi in particular, but other microbes that can't move out of their way. And got fascinated by how complex their genetics and their chemical biology and their cellular biology is, and go, whoa, they're way more interesting, way more complex than animals and humans are. And then got in a fascinating space of kind of interest with those systems, really interested in the molecular communication systems that happen between those organisms, then went on to go and work for a chunk of time. Luckily, while I was at university at Kew and the Royal Botanic Gardens at Kew, where I worked on the Millennium Seed Back project on working with everything from orchids all the way through to tree seeds and palms while I was there. Got fascinated by that kind of world. And that's where I first came into contact, really, with the fascination I have with the mycorrhizers. Although I knew I did a bunch of lectures while I was at the University of Bath doing my bachelor's degree that were focused on fungi. And there's not many universities left nowadays that do teach about, well, there's not that many that teach that much about plants, let alone fungi. But most universities, I would say, even in a biology degree, neglect one of the three major kingdoms of life, which I find baffling.

SPEAKER_01: 9:17

Which is crazy. Yeah. If you think about the comp like the complexity, what you just said compared to humans and animals, and the fact because they're stuck, uh error, they developed a range of motions and a range of defenses and a range of communications and a range of all other things that we start to slowly scratch the surface off, maybe a bit, and then we don't study it.

SPEAKER_00: 9:41

Yeah, slowly. And I think I sometimes articulate this. In fact, we actually did some work with some secondary school students once where we tried to articulate this in a kind of a physical representation to try and get the kids to understand why these organisms cool. But animals are, I think, very complex in two very important parts of their biology, which is about adapting to stresses, one of which is locomotion. So we pretty much move out of the way of any challenge that we have. If it's cold outside, we'll move inside. If it gets wet, we'll move out of the way so that we don't get, we don't drown, or things like this. But that means that we've also developed incredibly complex neurobiology to be able to coordinate this movement away from challenges. And so animals, I think, are incredibly complex, really, in that kind of locomotive, and then the output function of that is the neurological diversity that we have, which means our brains are incredibly complex because they're controlling this level of movement. Organisms that are stuck in place don't have any of that, and so they're not really complex in those two disciplines, but that means all of the same stresses that we move out of the way of, whether that's flooding, freezing, pot temperatures, drought conditions, low oxygen levels, anaerobic conditions, all of these organisms have, if they're going to survive, have to deal with them by changing their entire structure, functions. One of my favorite things that I didn't know about until I was going through the kind of latter parts of my bachelor's degree with these structures in plants called airenchyma, which are basically snorkels. So, like plants like maize have these, if their roots get waterlogged, they'll kill a tube of cells all the way down their stem so they can get oxygen to the roots in terms of how they adapt to those systems. And I thought that was cool. Imagine just killing like a new tube inside your body, just so that you could respire in a different part of your body. And like this complexity of what goes on in the physical chemistry of plants, but also what's going on in fungi and any other organisms that's stuck in place, they have to deal with that by rapidly changing their genetics and their cellular chemistry and all of their kind of metabolic activity that's going on inside the cell, which is why plant and fungal genomes are so much bigger than animals, because they are so much more complex, because they've got all of this adaptive function that they need to do by changing kind of the structure of them. It's also why cells in organisms that are stuck in place are far more complex, have far more organelles, things like this in terms of that. And I went, that's pretty cool. And so I became fascinated by that, to the point where we did articulate this, as I said earlier, with a group of students where we basically got them to go and stand outside and do their lesson outside for two hours. And the amount of complaining that you got a bunch of 14 and 15-year-olds coming because they couldn't, they weren't allowed to move away from their spot to try and go. You had a two-degree change in temperature here, and you're moaning about it profusely because you don't like that in terms of your comfort. And that was a hopefully a penny dropping moment for a couple of students that we do that, we did that with that. But yeah, that's the way we like to articulate it.

SPEAKER_01: 12:36

And then from that fascination, e-gardens, how does a startup come into how does a startup come into that?

SPEAKER_00: 12:48

Startup kind of come into it because I'd spent the best part of a decade working in the academic sector through my time at Q and then going on to do my PhD, doing some really interesting fundamental biology. But as I said earlier, like there was always a drive within me to understand that we live in a kind of unique point in history where the decisions that we make now will have a much larger impact on the course of land use history for generations to come, probably than any other generation that's out there. And so it dawned on me quite rapidly that we don't live at a time point where we can waste time, particularly with biodiversity, which is what I really care about. And carbon comes on as a knock-on side effect of what some of what we do in terms of climate, but really I care about biodiversity. And so I wanted to basically get to a point of how do I use all this academic knowledge that I've gained through being lucky enough to work and do the things that I've done for the last 10 years into something that has application. And fungi were a group that I'd always been interested in, mainly not because I'm a, in any way, a good mycologist taxonomist. In fact, I would say I'm quite a crap tactonomist. My brain does not work in a pattern that can accumulate lots of names and know stuff in minute detail. But feeling that this was a neglected group of organisms that are incredibly important for life on this planet and all of human systems, like all of the nutrient cycling on the planet, is pretty much passed through fungi. If you've ever drunk alcohol, that's produced by fungi. And so many things that exist in human life but also in the natural world are driven by fungi, and nobody ever thinks about them. Very few bits of research are ever funded on the fungal space comparatively to other groups of organisms. We also don't protect them, even though they're probably being lost at a rate that is at least equivalent, if maybe not more, than most other taxa. And so I've always been fascinated on trying to figure out whether we can find routes for this. And also in terms of a startup, fungi seem like a really good place to start because we have already generated markets that are over like trillion dollars worth of big markets in terms of what fungi can do for us in terms of production, whether that's food, whether that's pharmaceuticals that have come from fungi, material spaces and increasing space where we're starting to look at fungi, nutrient cycling, a lot of enzymes that we use come from fungi. So they have a huge amount of uses for us economically. They seem like a group that you could not only protect, but also drive a huge amount of value from, which in theory should generate them enough money to be able to protect themselves. And I guess that's also like a challenge that I've always had in the back of my mind when I think about ecology is as much as we want, like people like us would probably want kind of biology to be able to generate enough kind of natural capital value that actually realizes real capital that can then be deployed and protecting itself, it's never going to if we just sit around. But my kind of thinking on the world is how do we find ways of basically being the facilitators that we make that biology actually generate revenue for itself and then direct those funds into something that can be used for the conservation of those organisms? And I see that fungi is a fantastic place to basically explore that realms. And rhizochore, in some extent, is basically the exploration of that space of how do we find economically important functions that are in fungi, like what we do in forestry. In the forestry sector, we find fungi that basically increase the growth rates and decrease the amount of trees that die after we plant. So there is a tangible economic benefit of using these organisms that we can sell through a quite traditional business model that can generate enough money that we can then basically pump and recirculate into a kind of a weird space that we fall in, because we're a startup company, but our central mission is a conservation mission, which I think, as far as I'm aware, we're probably one of the few that exists out there, if not the only one, that has that embedded in it. But that's because I think we can find the value in nature and we can sell that, and then we can use a proportion of that to basically protect that kingdom of life in the process.

SPEAKER_01: 17:44

Which is such a fundamental shift, or like when you say finding the value in nature, you don't mean, but correct me if I'm wrong. I think putting a price on nature or the ecosystem services that we like to talk about, or like the world okay, the water, the biodiversity, etc. No, there are business models. It's not easy, you have to find them. There are very profitable, nice margin business models that relatively traditional in this case, selling pallets to tree plant operations that just really look at the numbers of okay, there are more trees that survive, and there are and they grow faster. So, okay, make the calculation if the pallet is worth it, I'll buy them. And those kinds of business models make sense regardless of the carbon price, make sense regardless of biodiversity, net gain, payment, of course, all night extras. And if you find those, you can certainly drive or suddenly sorry, drive a research mission as well. And so much of these worlds that haven't been mapped yet, and we don't even know what kind of antibiotics we're gonna find, or what kind of enzymes, or what kind of raisins, or whatever this will lead to, but at least you have a strong business model underneath that allows you not to just go from grant to grant, which I think many others are stuck in between brackets. It's a it's an okay model as well, but it just gives you way less flexibility and freedom. Exactly. And so how did you end up in the forestry side? What's the what was the path? Because when you start with this mission saying, okay, we want to find a business model or business models to fund mapping and protection, basically, and we need a number of them, but we need one to start. How do you map that? How do you map the opportunities and then and focus?

SPEAKER_00: 19:25

Yeah, so I guess my route into the forestry sector and actually forming Razor Corps goes through a really important phase of my training and life, I would say, which it was the transition out of the academic world and into the startup in the commercial world. And that was a steep learning curve to me. I remember sitting six months into it, and I was working with a venture building studio called Deep Science Ventures, who I think are fantastic, and their portfolio of companies that are spinning out of that venture studio are amazing, and you should all check them out if they are, because all of those companies have a fundamental ability to change the world, I think is probably the way of describing it in loads of different sectors. But I started working through there and to just articulate my level of lack of business understanding, and this is like any biologist who you think is going to be a founder is gonna probably have the same level of business understanding. I can remember being sat in a conversation where people were talking about B2B sales, which is business jargon and language. And I can remember being sat there thinking to myself, being like, I understand, I don't really understand, didn't really understand what B2B means. I didn't hadn't linked B meaning business. So I remember sat there going, we're talking about B2B sales, but I haven't clocked what's A to B sales to start with. And that was the thought process that was going through my mind, going, what on earth is going on? But it's a basic concept in terms of business, but there was jargon there that hadn't even come across, I haven't even approached it in terms of my lexicon, let alone my understanding of that. And I think it's particularly acute in the biological sciences that founders or academics in that sector get literally no business training or economics or anything like that. It won't even cross their mind. It didn't even cross my mind to be thinking about starting a business when I started my PhD, which I think is bonkers because that's what every PhD should be really leading to, I think. But my journey into forestry started through that studio and the training in terms of the business side of things. But I was bought into deep science ventures essentially as contracted in as a kind of scientist becoming entrepreneur in residence, is probably the best way of describing their model.

SPEAKER_01: 21:29

You wanted to start a company already down for a way in, basically.

SPEAKER_00: 21:33

Yeah, I was working on a separate company looking at the vertical farming space in parallel to finishing my PhD when I ran into deep science ventures and they said, okay, come into our program. We'll basically pay you essentially a postdoc salary. That's a basically a contractual salary to basically A, train you, but B, you're going to build company concepts under a broad umbrella of I frame it more of a question of how do you accelerate plant growth? And that was my area of expertise. I've been doing loads of work in that kind of sector. I've been working on plants my whole career, academic career. And so I spent six months probably building 12 concept companies, all in vastly different spaces, some in more hard engineering disciplines on indoor farming techniques, all the way through to like large-scale concepts. One was looking at seaweed farming, one was looking at cellular biology and how to basically could you basically essentially grow wood in bioreactors using plant cell cultures. There was all sorts of things in there. And I think there was probably three or four of them that would have, or three or four of those concept companies that would have made incredibly valuable businesses in terms of it. And RiserCore is what came out on top. What led to RiserCore was basically part of that program after the six months of building concept companies, you basically have then six months of basically trying to obliterate those concepts in as many different ways as possible and figure out which ones are going to fall flat in their face. But a lot of that is basically making sure the market pull is there. And so I started, and I knew that kind of the mycorrhizal fungi were accelerants for growth of organisms, and I've been working with them for a long time, so that was a natural place for me to start. But our thinking came into the forestry. One, there was a piece of fundamental thinking when we were thinking about carbon, and we were thinking about climate to a certain degree when we were like this. We realized that, although, in terms of a business sense, having one repeat customer on the same unit of land makes a lot of sense because you only have to make one sale and it's a repetitive sale. So from an economic point of view, it makes a lot of sense to do that. But from a climate point of view, in terms of volume of kind of product that you're producing, to have a bigger effect on a crop car on carbon drawdown, having one you basically want that one unit to go a lot further. And so working with perennial crop systems made a lot more sense in terms of you could apply once, and then that product could be active for 20, 30, 40, 50 plus years and have a much greater cumulative effect on carbon drawdown than working in an on an annual cropping system. So we started there, and then the natural place to start looking was forestry. So basically, I started then having a whole bunch of conversations with forestry organizations, basically asking them where they were using this group of fungi known as the mycorrhizal fungi, which for those of you who don't know basically means these are the fungi that are basically forming beneficial relationships with plants. They basically form a direct association with plants and they basically fertilize them essentially. They basically the fungi extract nutrients such as nitrogen and phosphorus from the soils and they pump them into the plants in return for carbon and sugars that are photosynthesized.

SPEAKER_01: 24:25

And they take the right ones they're needy, they trade, they make some very interesting decisions. Um very complex economic decisions. They know how to bargain in terms of if you need more potassium and we're in a low potassium area, that's the price is going to be higher, more sugars if you if we are in a rich one. Exactly. We might get to another deal.

SPEAKER_00: 24:45

Yeah, incredibly fascinating group of organisms, also an incredibly important group of organisms if you want to have maximized plant growth. So I was expecting to have conversations with the forestry sector, going, hey, where are you using microcontroller?

SPEAKER_01: 24:56

Of course, we use it in this way and in this way, and this is our lab.

SPEAKER_00: 24:59

That is essentially what I was expecting. And I was expecting to have a bit of a headache trying to figure out the latest science and how do we improve the mycorrhizers that are using? How do we maximize it?

SPEAKER_01: 25:07

Like five or ten percent. Yeah.

SPEAKER_00: 25:08

Yeah, and how do we work with them in that? And then basically the conversation with the forestry industry came back, and they pretty much, universally in the UK, at least, although this has played out with the most of the rest of the world, they basically said, we don't use them, and then half of them said, What are they?

SPEAKER_01: 25:24

What was your reaction there? Like, how do you not laugh?

SPEAKER_00: 25:27

Quite frankly, I couldn't laugh at that point because I was quite frankly flabbergasted. Because I had known about these organisms since I started doing my bachelor's degree and had 10-15 years worth of knowledge on how important these organisms were. And prior to that, there's literature and studies that go back probably the last kind of five decades. And so we've probably for half a century known, and probably longer realistically, how important these organisms are for use within the forestry sector and not really used them. And quite and that kind of really flabbergasted me, but I think I understand it more now in terms of how much nuance there is in terms of actually deriving that benefit from the fungi, which is goes back into kind of what we do. And also it's a kind of a fundamental probably challenge for any biological product that's on the market. That I think a lot of these approaches have one common effect, is that we tend to think of the soil environment as well, the soils in it's all the same, right? Those of us in the know will go, hell no, no, it's not. Like it's one of the most complex habitats that exists, probably on the planet. But for the nay person, and this includes quite a lot, people who are planting trees, they're all just uh, yeah, it all work.

SPEAKER_01: 27:00

And it runs a bit like this, it runs a bit like that, might be more water, it might be less moist. Ah, yeah, but pretty much. And then they they grow pretty slow, the trees as well. So a small change in the first years might not show up that quickly in a sense. And of course, it shows up over time if you're looking at two to three decades, a whole different story. But 20% more growth, of course, and also the maybe the death of the saplings is more obvious because you can see it the next year. But it is a slow-moving thing, and you yeah, you don't really see that effect too fast.

SPEAKER_00: 27:31

And that level of complexity is like fundamentally fascinating, but also really important. And it's also why you have essentially that in the forestry sector, you have these forest management organizations that are filled with fantastic silver culturalists, ecologists who really understand soils, plants, interactions in that sector. And they're the usually ones that can actually get forests to grow. If people come into the sector, I've seen so many examples recently with like drone seeding, where you've got an organization or maybe a landowner who doesn't have that much money and has gone for a cheap option with drone seeding, and there's so many drone seeding companies that just fail spectacularly because they don't understand the ecology of the systems, and it's often engineers going, oh, we'll chuck seeds in these places and chuck them out by the millions and expect loads of trees to grow. And then you you might put a couple of million tree seeds out into the environment and you might get seven, eight trees after two years. Like I've seen a couple of examples of this type of thing now, and that's because they're not understanding the soils, they're not understanding the seed biology, the germination biology, the ecology herbivory in the system. And actually, getting this right is really complex. And you have to have individuals in the sector that really understand what they're doing. Um, and we find that with the forest management organizations. In agriculture, it's the agronomists. These people really drive outputs in terms of what they've got. But in the forestry sector, even the forest managers, like often I would find that they and the ecologists really knew about the mycorrhizers, but there was no organization that was really supplying the right ones. There have been a couple of ad hoc approaches where some mycologists have gone out and basically been able to collect mushrooms or fruit bodies, as we call them, in woodlands and basically make a basically put them in a blender with a liquid mix and basically make a drip system that they then apply and pour over often in the nurseries because that doesn't go very far. But that's not very scalable and it requires a wild harvest to be able to do that, which obviously we don't want to do because it's extracted from the natural world. And so you add every now and again you find these cases where somebody's applied this kind of ad hoc.

SPEAKER_01: 29:35

And got the results.

SPEAKER_00: 29:36

Sometimes. Sometimes. Often not, though. And part of that's again, we might talk about this in the podcast, but in the tree planting world, you basically have another intermediate chain, which is the tree nurseries, because planting tree seeds doesn't work that well because of dormancy and all sorts of issues on seed viability. And so to get the survival of the saplings and the establishment of the saplings up, then you basically have to make a small young seedling and then plant that to basically get that up. But that means that you have these tree nurseries that are incredibly controlled conditions, they're highly fertilized conditions. And although a bunch of mycorrhizers we know will establish on tree nurseries, they're not necessarily the ones that you want in the field or that are likely to do that. And quite a lot of the species that can tolerate nursery environments don't tolerate field planting. And so after you move the trees from the nursery to the field, you have a huge loss of the specimens that are going there. Also, they're not necessarily always local organisms because trees from tree nurseries can often go quite a long way, but also there's like a shock in that process. And quite frankly, the soils are incredibly different to where you plant the tree compared to the tree nursery where they're being grown. And they basically, there's a just a huge kind of evolution. Read pressure like different organisms are adapted to different places, they just don't really establish it in the field. And yeah, you see a quite a big transplant shock. I've seen a couple of papers out there that will basically say it's lower than 20% survival from tree nurseries to field, and that's where the cell growing tree and cell growing tree basically means a small seedling with basically a soil ball around it. If it's bare root planting, so most of the trees in the UK, in the US as well, are what we call bare root planting. So basically, when they're lifted from the nursery, all the soil's washed off and then they go into a cold chain storage. The root tips are all broken off, which is where all the mycorrhizers come from. So any mycorrhizers that have established in the nursery from a bare root tree do not get to the field. Or if they get to the field, they usually die within a couple of weeks because they're so damaged and disconnected from their networks that essentially they can't really survive. And that's also meant that there was like a legacy in the industry where things have been tried on the nurseries and they've gone, huh? Mycorrhizers, we understand them, we find them in the mature ancient forests all the time. They've tried a couple of things. It hasn't really led to that many good results in terms of we can get good results in the nursery, but then translating that to the field hasn't really happened. And so there was a bit of an apathy that we had to get around. And are still getting around, I would say, to this day in the sector in terms of looking at this. And also there's a whole bunch of science. Like we know quite a lot about mycorrhizers now, and no surprise to anybody, they're far more complex than when the more you start diving into it than you expect. But we don't necessarily know what all the different species are doing. And some of them probably aren't doing that much. Some of them are probably doing very specific functions that have got nothing to do with tree growth and survival. Some of them might have like antibiotic and antifungal compounds, so actually they're more about defense than they are about growth. Like some mature trees can have like your sequence on one single tree in a root system can have 70 different species. I'm gonna throw another term at you here, the ectomycorrhizal fungi, which basically means these are the species ones that only associate really with trees.

SPEAKER_01: 32:39

And they're the ones that we've got good luck figuring out who does what and why and when in a year old tree.

SPEAKER_00: 32:45

Um and what's where. Like in if you think about places where we plant trees, like what actually exists there in the first place? Like it's only really until the advent of environmental DNA sequencing, so eDNA. For those of you who don't know where we can take soil samples and send them through a sequencing machine and extract all basically the fungal DNA and look what's there, then we've only really started to be able to get a good read on A, what's there, B, what's not, and B in a transition area. So often in forestry, there's these things called clearfelds, which I'm sure you've seen on the landscapes where basically a whole forest will be skinned in one go, which is not a practice I particularly like or enjoy.

SPEAKER_01: 33:22

Um ecologically, uh isn't a good practice, but that will economically neither. We did a long episode with Paul McMahon on continuous cover, and there's a lot of data that suggests and more coming that it actually makes economic and risk sense to not to do selective, yeah, apart from the ecological, which is I think without a doubt, but also I think quite a few studies in can I say Austria, Slovenia, Finland, that it makes at least economic sense plus a risk factor that you can be wiped out, obviously, a big store. There's a lot of risk with having a forest exactly the same height, exactly the same type, planted exactly the same week or weeks. From an economic perspective, it's tricky.

SPEAKER_00: 34:06

Yeah, um, but it requires a whole different economic perspective, yes. Operationally, no. It's much more difficult. Yeah, actually, quite I think in terms of like operationally, I mean, I don't like it as a practice, but fundamentally, in terms of operating a business, operating the kind of market, it makes a huge amount of sense in terms of that. And I can see why we've landed there and not in other places. And I think it actually, if you summed up all of the kind of economics and the losses that you get in supply chains, in terms of a wood output on an area of land, yes, continuous cover probably generates you more in terms of the margins at the end of it through all the operational complexity in terms of what you've done in terms of the processing that wood and getting to a product at the end, probably can't be able to do that. Yeah, it depends on the sawmill capacity.

SPEAKER_01: 34:50

But at the same time, if you happen to fell in an economic downturn or something, you get wiped out basically because you have to set some of your.

SPEAKER_00: 35:02

I think as with anything, like I like to put sometimes a rosy tinted glasses on it, and you can say, Oh, clear fell, we don't really like. But actually, when you think about it in terms of making all the systems and everything work, like from a capitalist standpoint, and operationally, in terms of actually generating resource through the product line, like pretty much any system that humans have ever developed to a point where it's chucking out large quantities to support the populations that we have and the demand that we have for these types of things, it all pretty much will universally end on some type of cropping system like this, just because of having to scale it, means that the systems that we need in place for harvesting, processing, transporting, yeah, and of course like all of that kind of comes into it. And I think often from an ecological and biological point of view, we sometimes tend to ignore that.

SPEAKER_01: 35:54

Yeah, no, yeah. But I think what's interesting now, if the return data shows the return is higher on average in a continuous cover, as an asset manager, you need to make a decision there to allocate potentially to a lower return if you want to do clear felt. Or, but of course, the resources, the sawing capacities, even larger trees, you need to be able to take them out, etc. etc. You need to be able to cut them, you need to be able to capture that margin of a bigger tree, etc. There are a lot of ifs if you have that.

SPEAKER_00: 36:24

Yeah, most sawmills will have an upper diameter in terms of what they're accept.

SPEAKER_01: 36:27

Which I think is an issue in the UK and Ireland. I remember the white paper and talking to it with Paul, I put it in the links below too, but it starts to make economic sense in certain places, and then it suddenly flips. Because then it's like, why don't you do that? From a risk perspective, in a weirder world, it makes sense in general, but also from a return, because if you get a few percent more, suddenly there's a decision to make like what do you want to do the next 30, 40 years? Way more complex in management because you have a lot of natural growth, you need really expert forest managers, which are far, and they're not so many, obviously, because we mostly went in that one direction. So there's an interesting tension there, but it seems to be making the raising a proper fund just to do that to see, okay, how far can you push that? Yeah, but anyway, getting back to the back of the back of the back.

SPEAKER_00: 37:58

There are some fantastic groups doing that type of work. I think SLM, and particularly the work they're doing in Ireland at the moment, are pioneering, I think, over there, continuous cover forestry. I really like the work that they're doing, and definitely a group worth checking out. So there are some of those groups that are basically pushing the continuous cover forestry models. And I think you'll probably see that as an increasing share over the next couple of decades.

SPEAKER_01: 38:19

Also, just simply for a license to operate, like it doesn't look nice to have a clear. Like, there's a do you want to in certain areas, not everywhere, but you get local communities to I saw some stuff in France, there's some other places, like it doesn't, it looks quite like a scar. Of course, we wanted to regrow as fast as possible, which we get to, but also like how do you manage that low that social license to even operate in places and to do practices that objectively don't look very nice? And so that it's gonna be an interesting tug of war in that sense. And then coming back to like how do you operate in terms of rhizocore? If it's so difficult to make trees grow, let's say, if so you don't dump them out of a drone because that rarely works, it's very difficult to get them out of nurseries alive enough or not so shocked, let's say, trees that they like what is the normal survival rate in a tree planting? Of course, super average, very difficult to answer, but just to give people an understanding. This is quite they see those images of people walking with a stick and then with their backpacks or whatever, yeah. And seedling after seedling, this is fast, this is very difficult to work and needs to be done precise. But how many of those trees make it?

SPEAKER_00: 39:23

Yeah, this is quite an easy question to answer. The numbers are relatively well known, although industry probably won't talk about it too much. In and there's two answers. One's for commercial forestry, and the second is for native replanting and regeneration. On average, a commercial timber plantation, and it's pretty regular, no matter which part of the world that we've worked in, that you will see between 15 and 25% of the trees die after 12 months or within the first 12 months. And this can be due to a huge range of factors. Some of it's stock that's coming from the nursery, like in the transplant processes, the roots have been damaged. Some of it's about conditions on site, some of it's about access to nutrients in the soils, and mycorrhiza comes into that as a large part of what's going on, what's going on there, how the trees have been planted, how long they've been left out, how long have they been in cold chain, all of this type of stuff can affect the kind of mortality rates. And then you've got site-specific factors. Like in the UK, like the planting season this year was coincided with quite a big drought, which means that the mortality rates of trees planted this year will be much higher. So we're expecting averaging 25-30, maybe 35% on a lot of the sites this year, which is a really kind of important factor, particularly as droughts are becoming more regular in places like the UK, even in Scotland, which we consider a wet country. I think basically the trees that we plant now, historically, a mild drought event would have happened once every 30 years. And in the lifetime of this next crop, we're expecting that to become a one in three year event. And that's in Scotland in a wet country. And this is what the forestry industry has to cope with thinking about the climatic conditions 20, 30, 40 years in the UK. In a place like Scandinavia and Sweden, where the crop cycle is 80 years, they're in to think what's the climate going to be in 80 years' time for the trees that they're planting now. And that's something that we don't often think about.

SPEAKER_01: 41:10

And so it's easier to be in a tropical country where stuff is eight-year cycles.

SPEAKER_00: 41:14

Yeah. And so that's what the commercial forestry sector gets. Like the native re regeneration, afforestation schemes. Basically, in the UK, if you're planting mixed broadleaf um native forests, so oaks, beech, birch, alders, willows, these types of things, you can expect a mortality rate after 12 months of somewhere between 35 and 50 percent of the trees will die if you're planting in those types of conditions. If you use the mycorrisers, and we've got 70 plus fields now, sites now across the UK, Ireland, and a couple in Australia as well, using Australian fungi down there. Like we pretty much see that we halve the mortality rates. Doesn't matter whether it's commercial timber or native regeneration. So if a site gets, say, 30% mortality rates, we're typically bringing it to a down around 15%. If it gets 10%, then we'll bring it down to five. And it's a fairly consistent trend. There's a couple of outliers where we've had a much better result than that, and sometimes we've had a slightly worse result than that. But that's like now the drought is that a drought. If we have droughts, and actually this year's worth of data, we're expecting to have quite a lot of anomalous data, I would say, in terms of that, because there's drought factors. And we would be expecting one of the things we're looking to learn is basically if you plant in a drought, do you get that? If you plant with a pro our product, say two or three weeks before the drought, so the mycorrhizers can establish proper list properly when before the drought happens. We expect that to have a better impact, but we should start to see that from the data that we're going to get out this year because we've had so many sites affected by droughts in terms of what's going on. But we expect an outsized benefit when planting in drought conditions using mycorrhizals, because one of the functions of quite a few of the mycorrhizal species is to improve drought tolerance of the young seedlings. Although exactly which, not only which species do that is still out for debate in the scientific literature, and not even which species, which strains of the species. So, like we've got a whole work package working on a group of species that you'll never really see. This is species called Cinecoccum geophilum, which is the Latin name, and it doesn't really have a common name as far as I'm aware of, because you don't really see it. This species has its entire life cycle underground, and the fruit bodies or the mushroom structure is actually it's like a tiny black bearing that you'll find in most forest soils. It's called a scorocia, and that's how it reproduces. But there's quite good literature data showing that species is actually quite important for drought tolerance for young trees, but it's usually variable depending on the individual strain. So some strains of that species seem to be really good at providing and conferring drought tolerance, and others don't do anything at all.

SPEAKER_01: 43:48

And so, how do you go about it then? Like, how do you say we use native species or native fungi in Australia? What's the process? What how does the process look like? Yeah, because making sure that you have because if we don't know what the individual does, we go for as many in the regeneration space, we'll probably say diversity, because then at least you cover the whole thing.

SPEAKER_00: 44:09

Like, how do you make sure that this is like how I guess everything we've been working on at Risercore is basically how you solve this problem, how do you get the information about the strains and then how you supply those strains to the right sides. And so RiserCore basically is built on a bunch of research that I did when I was working at the Millennium Seed Bank at Q. So when I was working there, and basically, this is basically a place where a bunch of the world's leading plant scientists are trying to conserve as many of the plant species seeds on the planet as possible in freezers. And when I was working on there, I worked in the research team on basically the 20% of plants that really don't like minus 20 standard seed banking conditions. So basically, I was looking at liquid nitrogen-based cryopreservation, really coal storage of these organisms to basically try and figure out whether we could conserve that group because, and that includes species like oaks, for example, we had no repository that was able to keep those seeds alive for any period of time. And so I developed and was helping develop a bunch of methods using low temperature storage for that, which is what we use for the fungi at Rhizocore, with a bunch of tweaks in terms of how we do that. So, what happens with our mycologists is we send teams of mycologists, which are fungal scientists, to many different habitats across the world to collect pretty much any fungal specimen that they come across and they bring them back into our laboratories here in Edinburgh. And then basically we go through quite an extensive tissue culture protocol to isolate individual strains. And this looks like a petri dish with basically a fungal specimen growing on it. Looks a little bit like a mold. In fact, some of the ones that we have are molds in terms of what we have, but that's how we grow all of these strains. And then basically, we then put those strains into our freezing conditions after we've basically DNA verified that the specimen that came from the field is the same as the basically the isolate that we've got in through our tissue culture process, which isn't always the case. Like sometimes we pick up contaminants and molds, sometimes we'll pick up what we call mycoparasites, which are fungi that parasitize and live inside other fungi, and we end up culturing those by accident instead of the specimen that we've picked up. So, yeah, all sorts of quirky things going on out there that we bring back in. And so we you have to use the DNA verification step to make sure that you have what you think you have in terms of that. And so once something then is gets DNA verified and we go into our frozen library, we generate an individual identifying code for all of our strains. And so there is a unique code associated to every single fungal isolate that we have within our freezers, which means that we can then generate data on each of those strains in loads of different conditions and try and unpick and figure out what each individual strain is good at and what it's not good at. So, in the basically the work that we do in the forestry sector, we have a partnership with a local nursery in the UK that's close to us, which is Elsing's Trees Nursery, which is located in a little town outside Edinburgh called North Berwick. And basically we run screens of all of us, as many of our strains as we possibly can in the nursery, basically with as many different tree species as they've got growing on the nursery in basically loads of different soil conditions. So we don't make nursery soil conditions, we build soil conditions that look much closer to planting sites, and then we basically saturate them with different levels of nitrogen, with different pHs, with different water environments, because those seem to be the three main drivers of fungal survival rates in soils and looking at which species can grow where. And then we're looking at the output factors in terms of what those fungal specimens are doing for the trees. And so we generate data on the nurseries basically on which fungal species work well with different tree hosts, in what soil conditions, and is that last bit in what soil conditions, which is really important because fungal specimens seem to be very picky about what soil types they'll grow in. And this I meant, I think I mentioned earlier that I have sometimes a bit of a gripe with biological companies that try and put amendments in soils. Because this is a common thing that no matter whether it's fungi or bacteria or any microbe that you're working on, they have particular habitats that they're adapted to grow in and ones that they can survive in. There's different habitats that they can tolerate but maybe not thrive in, and there's other habitats that they won't be able to survive in at all. And most companies that I've seen in the biological space typically have one or a handful of strains that they've collected from one location, and they typically then generate some phenomenal field results on an agricultural crop or in a forestry setting or something like that on one or two sites that are basically well matched to those strains, or sometimes even on a nursery that doesn't even look like a tree planting site.

SPEAKER_01: 48:47

And then they go out and say this is gonna change the world.

SPEAKER_00: 48:49

And then they extrapolate and they'll try and say this is gonna do the same everywhere, and we can expect the same result everywhere. And there's no place where that's ever gonna happen. And in some ways, some of the regulators are problematic in terms of this because a lot of countries will have regulations saying, Oh, you've got to test this one and show the result, and then you can put that on the label to say that's what's gonna happen. And it's basically misrepresenting fundamental ecology and in soils.

SPEAKER_01: 49:12

From a chemical space, it made a lot of sense because this kills probably in most circumstances, pretty much this. And probably it does hold back biologicals a lot to not really being able to perform and people get disappointed and thus not trust the next biological company and does not trust the next one. And it has hurt the uptake of a lot of very powerful, interesting stuff for very specific context, unless you tell them that you have to tell farmers as well, don't use this because it's not going to work in your circumstances under your circumstances.

SPEAKER_00: 49:44

And so that's what we decided to try and solve for, which makes our process slightly more complex than what most businesses that you might invest in look like. But also, it probably allows us to get basically we're more likely to get the maximum results out of any of the sites that we're working on because we have more sight line to what we expect our organisms to do in the field sites that they're going towards.

SPEAKER_01: 50:11

So it's not that you're going into the field side and take the mushroom or the fungi from there, mycedium, and grow them, but you go into a field side, understand what the soil conditions look like, and then go into your database and say, okay, which ones of the X10,000 mixed together will probably match the data.

SPEAKER_00: 50:30

And quite often we find that is the hyperlocal organisms are the ones that we actually expect to do. Because fundamentally, yes, soils are really complex, and if you get one field, there'll be quite a lot of different habitats within that one field. But if you compare that field that's say in northwest Scotland to a field that's in East Anglia, that's on completely different geology, there's going to be more fundamental similarities in the field that's in Northwest Scotland sampling points to the one that's in East Anglia. And so you tend to find that the tolerance range of the species will be able to tolerate most of the field conditions for one site location. And the closer that the collections are coming from those sites, the higher degree of likelihood that they're going to be relatively well adapted to those conditions. So we tend to find that the closer that you go, you have a basically a match. And we tend to, I mean, we have as a company trying to supplying basically only within the ecoregion where those specimens are got from. In the UK, that's quite easy to do because we have, and most countries will have some level of kind of like split of different ecoregions. In the UK, we call this seed zones or provenances in the forestry sector. So the UK is split up into 24 different geographic regions for the forestry sector, where broadly they're based on ecology. And the idea is that if in the forestry sector is if you collect a seed from a seed tree, that this basically the sites that you plant should have trees that have grown from seed collected within that same region or one of the adjacent ones to basically enhance that kind of diversity and chance of success. There's the say similar types of concepts in pretty much any country that you go for, and we try and base within that. And so we have like an overarching company policy where we try and only supply specimens from the same eco-region as where the trees are being on the sites are located or where the trees are being planted. Every now and again we might break that for a very specific ecological region, say something like altitude might come into it, but that happens on very rare occasions. Or sometimes we might be doing a re-establishment project where it's an incredibly rare species that we're basically working on for more conservation purposes rather than economic purposes, and we might be trying to reintroduce species to different local areas. Not across country boundaries, we never do that, but in kind of local areas where they might have gone locally extinct, mainly probably because their tree hosts are completely gone. And then somebody's got a planting project that's in a place that probably once upon a time had loads of trees, but is other than that completely barren. And we have worked in some places where like they're planting basically one or two hectares or a couple of hectares with trees, and you look around and you cannot see a tree. And so, of course, the natives just won't be there. And so we tend to do more diversity of reintroduction in those landscapes where the source populations are pretty low. And we also try and tend to hedge, so we will try if we can to supply multiple strains and multiple species to one planting site because that allows a community to build, and we typically see that if a community is established in the soils, you tend to get better results. Over time, we want to be able to get more diversity out, but we're building the capacity to do that at the moment, and so that's work in process. But we try and get as much diversity into the soils, even if it's a commercial monocultureistic disproof stand, which is the main crop in the UK. We will try and get three or four or five different species or specimens in to try and get some level of diversity in there. And we would be expecting that over time the native populations will move back in, but typically that would take 10 to 15 years before we tend to see the re-establishment of local populations dominating. Some of them get in a little bit earlier, and you might find that like a small part of the site has got like a population establishing earlier, but getting complete coverage over a planting project will typically take, again, it's a successional process, so it can typically take 10 to 15 years before that happens. And then we would basically expect that they would be performing alongside our specimens. And it's not like a competition factor. As I said earlier, some tree systems can have 70 different species on one root system, so we would be expecting their native populations to be moving back in and complementing what is being done here rather than wanting to establish some unusual mix. And as I said, most of our supply is local, anyways. These are organisms that are coming from pretty local sites.

SPEAKER_01: 54:39

And then you had to overcome that barrier of some other, like you said, there's some research in the space, and people have tried some things in in nurseries, but haven't really tried in the field to add these during planting or with planting or after planting, because then you're going to go around with this liquid irrigation or fertilizer or fungi, fungi liquid, etc. That's not the scale you're working at. So how did you overcome that? And how did you get to basically pellets?

SPEAKER_00: 55:05

I guess this is thinking really about two things, fundamental thinkings. A, the organisms you're working with and what you need to do to get them to be able to survive into the system, and B the planting system that's being worked with. So essentially the industry that you're working in, how do you get it in a way that is appealable and not disruptive to them, or the least disruptive that it can be? And those two things cannot be done independently, because if you get one of them wrong, you won't get other either the biology will die, but you'll have developed a system that won't be able to be used by the industry, which is what's happened a lot in the past. And if it's the other way around, then you might get industry adoption, but no. But who cares?

SPEAKER_02: 55:51

Yeah.

SPEAKER_00: 55:51

So the way that we approach this was realizing okay, nurseries don't seem like a good place to apply ectomycorrhiza for biological and economic reasons. So we need to apply at the point that the trees are planted because that's when the greatest benefit is able to be got, but also we can basically deliver them to the site, the correct organism for that site. Because most nurseries don't know where their trees are going. Like they basically will get an order a couple of weeks before, and then trees will go everywhere. So even if nursery systems were appropriate for the fungi that we use, which we don't think they are, you wouldn't be able to match local sites to local field conditions through them because of the system that is used of how trees are born. So we basically went, right, okay, we've got to get these organisms into the field when the trees are planted. And then there was a big learning curve. And we're like, well, how are trees planted? Like I knew what I used to do when I was at the wildlife trusts, which was like dig a hole with a spade, stick a tree in, guard the tree, do that for maybe a couple of hundred trees, and then go and get a flask of tea, or hot squash, as I tended to prefer, before repeating the process. But I was like, is that how the industry does it? And again, I was a bit surprised. I was like, oh yeah, it is predominantly in forestry, still ham planting, and it is contractors who are paid pretty much by how many trees they plant per hour. And that throws up a challenge because if we wanted to basically put a product in at that point in the chain, A, you can't slow the planters down because it costs them money. And they won't use it, and B, they're already carrying quite a lot of stuff because they've got a spade, they've got a bag of a couple of hundred trees. Sometimes they'll have tags and other things that they're carrying, and trees are planted in the winter because that's when the root systems are dormant. And so the conditions that they're working in are quite frankly like diabolical. Like they will be planting when it's chucking it down with rain, when it's pretty cold and miserable. And when you're in the UK, that leads to grumpy contractors in terms of what's going on. And so we were like, we've got to design a system that can get the biology in here. And so more of the challenge was actually how do we get the organism into the planting system in the first place? And so that's where the pellet came up and was designed. So for those of you who don't know, our products are called rhizopellets, which is basically looks like a sugar cube that we grow the fungi in. But they're that shape, because A, they're incredibly light, so the contractors can carry loads, they're quite small, so that the contractors don't have to carry a new bulky bag, and they are a cube shape because it turned out that two flat planes were much easier to handle with a big thick glove than a sphere. And so we specifically designed to quite a high degree of like triaging, I would say, and working with contractors and conversations back and forth, what was the best mode for them. And that meant that we could find something that can get in. So our products are basically one pellet that goes in the planting hole when the trees are in. So basically, their process is dig the hole or wiggle the hole sometimes. They literally stick it in and then wiggle the spade around just to make the slit just big enough rather than dig it, stick the tree in, stick the pellet, close the hole. It's as simple as that. And it for us, it was direct replacement for fertilizers.

SPEAKER_01: 59:08

So because it is already something, because otherwise, if they wouldn't throw something already in, it would slow down because it is an extra handling, which doesn't look like much, but if you need to do X trees a day and your pace is based on that, you're gonna shave up the seconds, which means you don't throw it. So it replaces something else they had to throw anyway into the Yeah, so fertilizers is basically a bag with a scoop on it.

SPEAKER_00: 59:30

So the old practice was dig the hole, put the tree in, scoop the fertilizer in, close the hole. From the majority, I would say, of planting sites, although not all of them, there's a lot of sites, and there's some countries that are starting to bam the use of fertilizers in forestry now. So there's other factors that play in terms of that. But again, fundamentally simple. The other part was the biology. Getting the biology right is also very difficult because fungal mycelium, when you grow it, and fungal mycelium are the filaments of fungi that grow, the main body of the organism that you don't see. To put an analogy in place, like the fungal mycelium is like a tree. And if you imagine it being an apple tree, the fungal mycelium is the bulk of the tree, all of its branches, leaves, root system, and then a mushroom that might form are like the apples. And that's the bit that you see. So we grow the basically the bulk bit of the fungal body, but that's really quite sensitive. And it's also one of the main food sources for a lot of organisms in the soil, like nematodes will munch away on fungal mycelium in the soils. And so they're also subjective to quite a lot of herbivory. So we realized that not only did we need to get the organism in, and we tried like liquid inoculars and we tried granular formulations and alginetic beads, and none of them worked. And that was the realization that we didn't protect the mycelium enough. So when we grow them on agar plates, we provide them with nutrition and we applied them with an environment that is suitable for fungal growth.

SPEAKER_01: 1:00:49

You take away the predators.

SPEAKER_00: 1:00:50

Yeah, and water sources, right? This fundamental things that you need to grow fungi. And so, what I realized, and this when I was thinking about what I used to do with plants and what a plant seed is, like plant seeds are basically a package of everything the organism, in this case, a plant embryo, needs to be able to survive and grow. And so we basically went, right, the rhizopellate has to mimic what a plant's seeds function is for the mycelium. So there's nutrient sources in there, there's water sources in there, it's a protective environment. And so there's a mineral component that allows basically the fungal filaments to grow through. So they basically, if there's herbivores that will eat fungal mycelium in the soils, they're protected enough. And also, this needs to provide that long enough for the plant root system to become active. Again in the spring to let a mycorrhiza happen. Because we're going to plant these when the root system's dormant, the signaling components that allow the mycorrhizal connection to form won't happen until the roots start growing again. And so if you're planting in the UK, say five, six months. It could be five, six months. If you plant in November in the UK and then the trees don't start growing in Scotland again until April, like you have to provide enough in there to support the fungal growth and the fungi long enough to keep it alive to form that connection with the root system tree. And if you don't do that, the biology won't work and you won't get an output. And so those two things in combination, the industry and application mode that we designed specifically for the industry and trying to figure out how to basically make biology hooked up and work have to come first if you want to get an output. And that was the fundamental reasoning that came behind what we now have produced and sold. And then layering the data that we get from the nurseries on top of that is that's the secrets. All of Razorburg's trade secrets are on the strains and the data that we hold on how those strains perform, which allows us to basically match the strains to the right environment. And that's how it works. And that's what we do with the products in the forestry sector.

SPEAKER_01: 1:02:49

And then now showing those results to the forest companies, uh basically halving of the mortality rate and improves growth, like how quickly then do they come on board or started rolling out this? Like, how was that process? Because you have it's a high margin product, which then feeds back into mapping the space as we talked about before, but you still need to sell a high margin product, otherwise it's high margin on paper. Yeah. How was it to not convince, but to sell pallets at a scale that started to make sense?

SPEAKER_00: 1:03:21

Incredibly easy and very hard is probably the answer. Incredibly easy to sell into trials. So pretty much every forestry organization that we came across and we told them what we were doing, we're like, we've been waiting for somebody to do this and become a supplier for 20 years. And so actually, the demand from the industry, and it doesn't matter whether it's a small organization or one of the biggest wood planters, like whichever type of organization we talk to, basically go, Great. We want a trial, and we go, here's the cost, and they go, okay. Um so all of our trials are paid for full price, full work. And that's basically allowed us to get to where we are. So it churns some revenue streams for us, which basically gets us ahead of the game in terms of the investment side of things because we can show no, this is real traction, this is the price point they will buy at that price point. Like we can prove that through the direct sales. Getting them then to basically follow through and make bigger orders is incredibly hard because it's a conservative industry and the trees take a long time to grow. So the data validation cycles are long. Like to get a mortality, the first mortality data point takes 12 months and field, and they don't care whatever data you've got from the nursery, that's not what the field looked like. They know that things that are coming from nursery are not equivalent to what's going on in field, so you have to have field data. So that's the first data points we can get to. We also get growth data at that. So on average, I would say we improve the growth rates across our sites by 20% on average, in terms of the height metrics, but also the girth, which is actually really important in terms of the trees. But that's not enough to convince them to buy at that point. Like typically they want to see three, sometimes four, five years, depending on how radical a tree planting organization they are. And there aren't that many that are that radical, I would say. It's not an industry that lends itself to that type of thinking. But that means that we've decided to have to get a little bit more savvy with contracts. And so we can get organizations to basically go onto like an onboarding contract where essentially it's a trial phase for one, two, three years, which they're paying for and they're paying for reasonable amounts of volume, but they're locked in. If we hit the metrics that prove that ROI is out, they're locked into basically increasing percentages of their annual planting volume, then buying our product. And because of that point, we've demonstrated and proved that it's an absolute no-brainer. They are making money on buying our product, and there's gap clause in there. So if we don't hit that, so it looks like they ain't gonna make money on it, they don't have to buy that product.

SPEAKER_01: 1:05:46

And like we're betting ourselves based on the data, the science that we've built, the output for the with that you can go to investors and say, look, yeah, and with yeah, we think we hit yeah, it's traction based on future results. But of course, that's what all investing is. Like, we hope you're gonna make it, and you're betting um that you're gonna keep on the survival rates and the growth rates, not that suddenly, okay, first year is great, and then the whole tree collapses. And all those kind of things that that you need to, yeah, time only time will tell. But if that contracts are contracts, they unlock a lot more demand, basically.

SPEAKER_00: 1:06:18

Yeah. And like we've got to the point now where we've got three years worth of field data now that some of our new customers are happy looking at other sites because there's so many. They can talk to our other customers, they can talk to the forest managers where all these trials are happening. And they're not controlled trials. Like we produce the product and we ship them to our customers and they'd set them up themselves. They're not us setting them up. So these are real life trials, not scientifically controlled trials. And that's important in terms of how that goes. Although we keep some of them under wraps to make sure that we've got control over kind of data outputs. But we've got new customers that can look at that data set, they can speak to our customers, and they're starting to buy volume for us now, not on these deals. They're just locking in forward pipeline because as we speak now, I think we've sold out through February this season, which is the main bulk of the UK planting season in terms of our capacity now, anyway. And so we're in the process of increasing our production capacity in terms of what's going. And I would expect us to basically sell out in the not too distant future the entirety of our supply ability for the entire of Europe, probably in the next few weeks. And that will basically take sell out our supply all the way through the back end of April. Yeah, we're starting because of those factors to get that quantum of order size coming in. And we've started to sell basically our capacity for the next couple of years. So, like we've got orders basically coming in now that are three, four, five million pellets worth over the next three years that we're starting to fill the order book with. And so we're moving from that phase of paid for trials to five, six year worth of contract that's got a trial phase plus a commercial lock-in to just direct sales at this point based on the data that we've got.

SPEAKER_01: 1:07:52

And you hinted, and we're gonna run out of time here, but you hinted at that's what we do in forestry, which suggests you're doing other things in other places with the huge risk of opening a rabbit hole and a book of Pandora here. And what do you do in other places? I know, but I just want to give you if you want to talk about it.

SPEAKER_00: 1:08:08

Yeah, so basically, this is when we go back to the start of the whole conversation where I was talking about all the applications that fungi have. And we chose one, and forestry we consider the beachhead for us. Which, if we just built a product line on the forestry sector, we could get to unicorn in terms of startup terminology as it is, although I think it's a stupid term, if you ask me, in terms of what it is, but that's from an ecological perspective, not a business mind. But yeah, we could get to that level of revenue if we wanted to with one business line. But we don't really want to stop there because it's valuation, it's not revenue.

SPEAKER_01: 1:08:39

Many of the unicorns never get to any significant revenue. No, it's more values in terms of that.

SPEAKER_00: 1:08:44

But yeah, in terms of yeah, how that kind of like like pans out. But anyway, sizable revenues. But we don't want to be able to do that. Yeah. And so what we've what we realized basically, and what we not realize, we strategically built the first beachhead market because it relies in and is predicated on us getting mycologists to as many different environments as possible to build this biological asset, which is unique to us. Basically, our freezers full of hundreds of strains in different species that is growing continually through the workflows that we've got at the moment. And our 10-year vision is to basically try and exceed the number of species in our freezers than what's in the Millennium Seed Bank, which would make our freezers the most biodiverse place on the planet. And so, what we're trying to do is build probably one of the world's most useful biological assets from an unlooked at kingdom of life. And we've got RD projects and grant-funded projects that come off that. So, for example, we're building a project, a product line at the moment in wastewater treatment. So there are many fungal species that are good, for example, at basically accumulating nitrogen and phosphate and heavy metals from watercourses or from water. And we're basically doing the same type of screening work. So fungi specialists have figured this out and been like, oh, there's a couple of strains, but nobody's really systematically learned to that. And that's because there hasn't been access to this type of repository where you can take a whole ton of species and then screen them and look at which ones are best, which ones are not doing things. And so we're doing this. So we've got a live work stream at the moment where we've taken 50 different species from an entirely different group. These are not mycorrhizal species at all. In fact, most of these are wood decomposing species that we're looking at and that we've just picked up because our mycologists don't only pick up mycorrhizals, they pick up everything that they come across because of that conservation mission. But that meant that we could basically go into the database and go, oh, in the freezers, we've got these 50 species of interest, and we're basically going to screen them against nitrates, phosphates, ammonia, and water, and basically see which ones take up the most. And so we found a bunch that are really high accumulators at very short time frames of phosphates in terms of how we do this. And so we're basically looking at how we build filtration systems now for agricultural systems, for downstream of sewage treatment plants, for suds ponds if you're in the UK, which are these kind of treatment sites, downstream of housing estates and have to go in now. But basically, how do we take nutrients out of freshwater ecosystems? Because that's a huge problem with kind of what's going on. And can you then recirculate them? Can you basically capture the nutrients that are lost from farm runoff and recirculate them back on farm in terms of what's going on? So that's a use case that we know that fungi have and hasn't really been exploited properly yet.

SPEAKER_01: 1:11:23

So another question becomes what's the pallet quote unquote version then? Yeah, exactly. So we're supplying scale, how do you make the cube, not the palette, not the sphere?

SPEAKER_00: 1:11:31

How do you make the How did you make the filter for the farming sector? It's basically the question that we're working on at the moment. So we're doing that industry design piece with that right now. And the other part of that is we have unique strains and species. Like I've we've got a team that we have down in Australia, and we funded a PhD program down in Australia to basically build the libraries out down there. We probably have one or two new species in that library already, and we think that are unknown to science, or certainly the molecular data doesn't match anything in the existing data sets. In the UK, we've got a specimen that I think was only been seen in the UK five times. So we've got some pretty rare things already in the library, and we expect to find new species through the course of our work in terms of what we do as we expand the mycological collection piece in terms of what we do. And we expect that the unique chemistry that we have within that library will yield things like pharmaceuticals and new enzymes in the future. And so the long-term vision of RhizOCore is to partner with or look ourselves and basically utilize that biological asset that has potentially huge value for the human populations and figure out how to harness that, generate multiple revenue streams off that, again, to all support that conservation mission of how do we protect and restore the fungal kingdom of life? And that's riser caught in a nutshell. And that's hopefully what I'll be able to tell you in 10 years that we've achieved.

SPEAKER_01: 1:12:55

And a few rapid-fire questions. We'll keep it short and we'll wrap up. What would be your main message to investors? I like to ask this question. Let's say in the city of London, probably the closest financial capital, we do this in a theater on stage. People remember, or people have a nice evening. Of course, we eat interesting things, a lot of interesting imagery, but then the next day in their office, they forget, or at least they might remember one thing. If you had to plant a seed or seedling in this case, and one thing they remember for the next day, what would that be?

SPEAKER_00: 1:13:28

Honestly, I would tell them to stop getting so het up on measuring carbon and measuring biodiversity. I think those two things come as co-benefits to things that are fundamentally making economic decisions. Like investors should be good at going, I can see a business model and I can see how this is going to make real money in a real market, not an emerging market. If emerging markets come and add a whole bunch of fuel to the fire, then great, we can all sing and dance in it. But fundamentally, it compounds the fact that natural capital has no real value with needing emerging markets. Whereas natural capital has immense value, and you can look at all the product lines that come from plants, fungi, ecology, ecosystems all the freaking time. My thinking and what I would say to them is start finding, or not start finding, actually start working and thinking about how to work with biologists, probably in particular, about teaching and training them how to think about business and real markets and how to develop a product line to articulate to a market. This thing is going to make you return on your investment. And return on investment is a term that almost all biologists universally will have no clue exists. And that's what I would say to talk to investors about.

SPEAKER_01: 1:14:53

And if we flip the table, let's say, or the cards, and you are in charge, we usually say, let's say a billion euros or a billion pounds, and of course, not looking for investment advice, not looking for exact numbers, but what would you prioritize if you had not unlimited but a significant amount of resources I would be thinking about land?

SPEAKER_00: 1:15:17

I think, because fundamentally everything that we do in carbon, in natural capital, in biodiversity, is underpinned by land and land systems. How one of the things I would say is how do you think about putting ecology on the balance sheet? So how do you get from somebody like me talking about fungi? I would say if you're an asset manager or you own a big estate, how do you value the fungi that you've got? And how do you get them to scientists who can then do tests on them, who can find the value there? Because going, oh yeah, we've got all of this diversity, isn't it wonderful? Doesn't do anything because you've not hooked it up to the people that can derive the value from that. How do you go, oh, you know what? There's this fungal company that does some really cool stuff. Let's get them to our site, get all the fungi in, and then ask them and pay them to basically run a bunch of pharmaceutical screens on there, and let's see whether we can find cancer-relating drugs, antibiotics, neurological drugs from that biology. And you know what? If they find something, there's a royalty tied to it, and that's gonna end in profit. Like, how do you harness that? But fundamentally, I'd be looking at land buying and basically doing bioprospecting at a deep level and hooking up with research organizations to see whether what's in the natural world that we have under our feet and around us can lead to value. And then I would be like, proportion a chunk of that, at least 20% of the profits or revenues that you should be making should be then going directly into supporting that ecosystem function in terms of what goes back. And I think that should be a fundamental thing that comes out of any fund.

SPEAKER_01: 1:16:59

And as a final question, if you had a magic wand and you could change one thing overnight, what would it be?

SPEAKER_00: 1:17:08

I might say something very controversial in this case, but I would eliminate culture from the behavior of humans.

SPEAKER_01: 1:17:18

Explain.

SPEAKER_00: 1:17:20

Can I explain this very quickly? Culture is something that I think causes so many problems in our societies in terms of the way we think about things, because it masks what the data says. Humans like to think that they think scientifically and they look at the data. They're actually very good as telling stories, and stories lead to cultural development. And then the story is passed on, and somebody says, Oh, this person told me this person, therefore it must be true, and it's good. And it masks actually what fundamentally is going on in the world. And so few people look at the data of how to do things well and what actually happens, and really look at the data. And I think that's a that causes so many problems from how we think about the natural world, how we think about natural capital, how we think about political systems, how we think about work culture and balance, like work life and balance, it all thrives down to that kind of wonderful ability that humans have at creative storytelling. That means that we don't really understand the world and how it works.

SPEAKER_01: 1:18:24

And with that, I think it's a perfect moment to wrap up. I want to thank you so much for coming on here, of course, for the work you do and coming on here in a very busy time, not only planting season, harvest season, production season, investment rounds, and all of that at the same time. So thank you so much for coming on here and spend some quality time, hopefully, with us and share more on Rise of Gore. Thank you for listening all the way to the end. For show notes and links discussed, check out our website, investinginregenerativeagriculture.com slash posts. If you like this episode, why not share it with a friend? And get in touch with us on social media, our website, or via the Spotify app. And tell us what you like most. And give us a rating on Apple Podcasts or Spotify or your podcast player. That really, really helps us. Thanks again and see you next time.