Rare Earth Global, a UK-based startup focused on industrial hemp products, has successfully secured £1 million ($1.3 million) in a pre-seed funding round aimed at expanding its innovative platform. The funding, led by a UK-based family office, also includes contributions from an impact fund and angel investors, as well as non-dilutive funding. Founded in 2019 by Jamie Lewis (CEO), Suneet Shivaprasad (COO/CTO), and Stephen Wong (CFO), Rare Earth Global emerged from a consultancy project that explored the potential of industrial hemp in the Caribbean as a sustainable alternative to traditional crops like soy.
Shivaprasad shared insights with AgFunderNews, emphasizing the environmental benefits of industrial hemp, which is characterized by its rapid growth, low chemical input requirements, and ability to sequester carbon. The startup aims to leverage these advantages by promoting hemp for various applications, including animal feed, construction materials, and bioenergy. The founders were inspired by South American growers who highlighted the deforestation linked to soy production for animal feed, leading them to advocate for hemp cultivation as a more sustainable solution.
The versatility of hemp presents a unique opportunity for Rare Earth Global. The company is focused on two primary areas: establishing a customer base eager to purchase hemp products and ensuring a reliable supply chain for hemp farmers. According to Shivaprasad, the company is working to develop sustainable hemp products while providing essential information on traceability and lifecycle analysis to potential customers. On the agricultural side, Rare Earth Global aims to create a profitable crop for farmers, addressing the current limitations in hemp production that prevent it from reaching commodity scale.
One of the standout initiatives involves the potential use of hemp seeds in aquaculture. The startup has conducted feasibility studies with initial funding from the UK government to explore replacing soy in salmon feed with hemp seeds, which are rich in protein. Collaborating with Mowi, the world’s largest producer of farm-raised Atlantic salmon, Rare Earth Global has demonstrated that hemp can perform as well as, if not better than, soy in terms of nutritional value and environmental impact. This is significant, as it could lead to reduced carbon footprints in the aquaculture sector.
In addition to animal feed, Rare Earth Global is also exploring the construction market through the use of hempcrete, a lightweight insulating material made from hemp stalks and lime. This product not only serves as an eco-friendly construction alternative but also acts as a carbon sink, further enhancing the company’s sustainability credentials. The founders are engaged with major construction companies interested in utilizing hempcrete, underscoring the growing demand for sustainable building materials.
The startup’s business model operates as a managed B2B marketplace, connecting customers with processors while addressing the needs of both sides. Rare Earth Global generates revenue through transaction and subscription fees, facilitating compliance and quality assurance for customers and producers alike. Additionally, the company offers software solutions that help producers improve yields and access high-quality carbon credits.
Despite the challenges faced by the hemp industry, particularly in the wake of the CBD market’s rapid expansion and subsequent crash, Shivaprasad remains optimistic about the future. He notes that while the CBD market grew too quickly without a solid customer base, there are still significant opportunities in other areas of hemp utilization. By focusing on industrial demand and scaling smaller, high-value projects, Rare Earth Global aims to carve out a niche in the market.
As Rare Earth Global prepares to scale its operations with the new funding, the implications of its work extend beyond profitability. The startup is poised to play a crucial role in promoting sustainable agricultural practices, reducing deforestation, and providing eco-friendly alternatives in various industries. By harnessing the potential of industrial hemp, Rare Earth Global is not only addressing pressing environmental issues but also paving the way for a more sustainable future.