Dendra Systems — why we invested
This past summer, we helped launch Together With Nature, a call to corporate leaders across sectors to commit to four principles for investing in nature-based solutions to global warming and our climate crisis. These principles were defined by climate, ecology and biodiversity scientists and experts, and launched with a Special Report on “Investing in Nature” in the Financial Times. They recognize the importance of nature-based solutions such as restoring soils, planting forests and regenerating coastal mangroves in the global effort to build a net zero future.
Now, and in line with those principles, we are thrilled to announce our investment in Dendra Systems, a London-based company that enables the scalable restoration of natural ecosystems using AI, automation and plant science. The 10m$ round was co-led by At One Ventures, Airbus Ventures, and we invested alongside Chris Sacca’s Lowercarbon Capital, Lionheart Ventures and Systemiq.
What problem is Dendra solving?
Dendra (for short) operates at the intersection of a complex set of interdependent problems: natural ecosystem restoration, greenhouse gas emissions, biodiversity loss, and transparency in the nascent ecosystem services market.
The last few years have continued to reveal the scale and urgency of our climate crisis. Global greenhouse-gas emissions and average global temperatures continue to rise. In 2019, CO2 concentration levels were at 414 parts per million, far beyond previous highs.
Science agrees: we have to simultaneously reduce emissions toward zero and, critically, support nature’s carbon sinks if we want to maintain chances of survival on this planet. While ~59% of GHG emissions stay in the atmosphere, ~24% are quickly removed by plants and ~17% are taken up by oceans, both of which absorb and store carbon through biological and chemical processes.
We are, however, moving in the wrong direction.
There are 2 billion hectares — an area twice the size of China — of degraded land across the globe created from years of imbalance between the rate of ecosystem destruction and ecosystem restoration.
While forests are a highly efficient way to remove and store carbon, we have an annual net loss of 10 billion trees (equivalent to an area the size of the UK), which has increased 40%+ over the last 5 years. The annual tropical tree cover loss from 2014–2018 emitted 4.7 gigatons of CO2 / year — more than all of the European Union’s 2017 greenhouse gases emissions; equally, protecting forests could result in as much as 6.2 BtCO2e removed from the atmosphere between now and 2050.
And while initiatives like the World Economic Forum’s 1-Trillion Trees movement hold some promise, these are impossible to actually deliver with our current “manual” tree-planting means. Today, these initiatives rely on environmental consultants who go into the field to measure conditions and sample land with measuring tapes (extrapolating data from those samples), and local providers who do the actual field work of seeding and treating. These processes are costly, error-prone (often over-reported), and often unsafe, and ultimately prevent organizations and companies from restoring land at scale. As an example, the UN FAO estimates that 2.4 Bn trees are planted per year (8m acres) today, a mere 0.24% only of the trees we need to plant. It will take us 400 years to achieve the WEF’s lofty goals with current technologies.
Beyond carbon and forests, degraded land and pollution are destroying global biodiversity at a record pace — 1 million species face extinction within decades, and current efforts to conserve the earth’s diversity of species will likely fail without radical action enabled by step-change solutions. Solving for this means addressing the challenge of forestation and restoration through the lens of biodiversity — which goes much beyond planting trees en masse.
Finally, the emerging markets for ecosystem services — that enable companies to counterbalance their environmental impact by purchasing carbon and forest securities, paying for biodiversity offsets, or supporting water retention — are constrained by information gaps and lack transparency and accountability. Without data-driven baselines to measure and monitor restoration initiatives (and their resulting ecosystem services), the global market for biodiversity will struggle to materialize.
Integrated analytics and planting solutions for large-scale ecosystem restoration
Software and hardware can help solve those interdependent challenges.
On the software side, biodiversity, carbon and ecosystem services markets require reliable infrastructure that monitors, verifies and reports on restoration progress and validates associated securities. Other great companies are also pursuing this opportunity, but most are focused on monitoring and validating forest-based carbon markets through remote sensing (i.e. satellite data). Monitoring and validating natural ecosystems and their biodiversity is more complex than accounting for tree coverage, and much of our restoration efforts need to focus on biodiversity in addition to forestation. Additionally, the commercial resolution of satellite data cannot provide reliable intelligence in the early years of a forestation project, which severely increases the balance sheet risk of offset purchasers as the early years are critical to validate a project’s carbon potential.
On the hardware side, drone-planting is necessary to achieve the Herculean labors required to fulfill the trillion tree ambition. Drones loaded with seed pods can plant up to 120 seed pods per minute, or 2 trees per second, with extreme precision. Not only is it 10x cheaper than planting by hand, but it also means that it would take just 400 teams of two drone operators, with 10 drones per team, to plant 10 billion trees each year — when today 2.4 billion trees are planted each year all over the world.
Dendra Systems: why did we invest?
Dendra built an end-to-end platform — from ultra-high resolution mapping to automated aerial seeding and ongoing specific condition monitoring to long term environmental management — for any organization engaged in large-scale land restoration.
A full-stack solution
Though Dendra’s history is in hardware, they have now built a full-stack solution that fully integrates hardware and software to provide an essential solution for investments in restoration.
The company, originally known as Biocarbon Engineering, has been modifying off-the-shelf drones for five years to develop automated seeding capabilities. Today, their fleet of drones can plant native species and trees 150x faster than incumbent solutions. If a handful of other companies in the world offer drone-based seeding services, Dendra has built technology that’s specifically adapted for the complexity of natural ecosystem restoration. Competitive seeding systems tend to focus on distributing one kind of palletized seed — for forests with a single tree type, or for agricultural needs for a single culture. Natural environment restoration, however, has different requirements as seeding systems need to pod diverse groups of seeds that mimic the natural vegetation that you are trying to achieve, with many of those seeds often being “hairy” (i.e. sticky, as they rely on sticking themselves to animals to propagate). As a result, commercially available drone seeding systems jam when used for natural environmental restoration. Building on their experience developing bespoke 3D-printed seeding systems, Dendra continues to invent new spraying systems that maintain high and consistent flow rates.
Dendra then leveraged their operational experience deploying seeds across a variety of landscapes to build a data platform that helps customers assess restoration investments against data-driven baselines (often for the first time) and actually quantify outcomes.
When servicing customers, Dendra sends in drones to capture ultra-high resolution images of the land. They process those images, and feed them into ML models that automatically detect fauna, flora and other environmental features. Those models are continuously refined through ground-truthing, data acquisition and the company’s in-house plant science experiments. In the process, Dendra has had to build internal systems to massively parallelize processing in order to process large quantities of image data (vast landscapes) at very high resolutions in very short time-frames, and innovate to efficiently achieve more complex tasks areas such as bareground slope detection or vegetation height classification.
Built on top of this data, Dendra’s core value proposition lies in their ability to deliver precise analytics to customers across a number of products, including condition monitoring, erosion monitoring, individual plant species detection, weed mapping, moisture detection, restoration budget forecasting, all aggregated in a customer dashboard.
Using Dendra’s platform, customers can now demonstrate efficacy with transparency, for both internal and regulatory reporting.
Dendra’s data-driven approach inherently expands the market
Dendra has the potential to serve several markets that sit at the intersection of regulatory ecosystem restoration, voluntary carbon offsetting (potential for 200–300 Bn$ investment per year), and reforestation (74 Bn$ global market), all of which backed by strong tailwinds, including an appetite for natural environment restoration / conservation finance with high demand and too little supply, and increased consumer and regulatory pressure to incorporate externalities into pricing.
Importantly, their data-driven approach has the potential to expand the fragmented restoration market. For investment in conservation and land restoration to take off technology will have to enable models that maximize ROI through automation and replication. Dendra is uniquely positioned to serve this need by enabling the delivery of projects at scale and across varied and complex types of areas.
A highly committed and execution-focused team
Finally, we’ve had the chance to see the Dendra team at work for the last few years and were impressed by their drive, commitment and resilience. They are the type of team that will drive for hours to meet customers face to face to understand their needs, and scour Australia to find specific grass species to train their models on when customer sites are restricted because of Covid-19. With her background as an engineer (PhD in biomedical engineering), CEO Susan Graham has a data- and evidence-driven approach to building product, with a focus on quality that’s essential for regulated industries. She leads a strong technical team and, after having recruited Adam Filby, an experienced sales leader to lead the sales organization, the company will use the round to continue to expand Dendra’s senior leadership team and accelerate deployments globally.
Conclusion
Overtime, Dendra has the ability to impact and accelerate several of the most important solutions to our global abatement of greenhouse gases: degraded land restoration, degraded forest reforestation, pastureland afforestation, and soil regeneration — that’s more than many other climate solution in existence.
In March 2019, the UN declared 2021–2030 the UN Decade on Ecosystem Restoration, an effort to “massively scale up the restoration of degraded and destroyed ecosystems as a proven measure to fight the climate crisis and enhance food security, water supply and biodiversity.” At Future Positive, we are seeking to support 20 iconic European companies that apply advanced science and technology to solve a global need, including ecosystem restoration. Dendra Systems is undoubtedly one of those. If you’re interested in what we’re doing, please get in touch.
