Israeli startup Ilsar Truffles, which cultivates rare and expensive black winter truffles using advanced biological technology, has announced the completion of a $5 million financing round, led by AP Partners private equity fund.
Ilsar has cultivated the rare truffles on the Golan Heights and is set to commercialize it on international markets. The complex cultivation process for truffles that Ilsar has developed over the past eight years extends from the host plant seeds to the initial root system, after which the seedlings are grown in controlled greenhouse conditions for two more years, and finally the seedlings are planted in a special Truffier, in cooperation with local farmers.
Due to climate change, the urbanization process and burning of the world's forests, intensive harvesting and the dominance of more rampant contaminant fungus mushrooms, the natural growing habitat of the black winter truffle in Europe has been significantly reduced. At the same time, the supply of quality truffles is significantly smaller, while there has been a major increase in international consumption of the truffles, which are considered a luxury addition to menus in the culinary plant world. The perigord black winter truffle (which is grown in Ilsar's plantations) and the Alba white winter truffle are the world's two most expensive types of truffles. According to Ilsar, several companies have tried to agriculturally cultivate the truffle but very few have succeeded in doing so.
Only 15% of truffle plantations around the world have succeeded in producing truffle yields and 5-8 years are required to cultivate a successful plantation and about 10 years is needed to optimally realize the truffle yields. In France, the world's biggest consumers of truffles, produce of truffles has plunged from 1,000 tons to 30 tons annually over the past century. At the same time as this continually falling supply, demand for truffles has risen exponentially in recent years, and brought about a twofold to thousand-fold increase in prices. Wholesale prices of truffles today move between $1,200 and $2,000 per kilogram and the forecast is that demand for the truffles will continue to rise at an annual average rate of 19%.
Ilsar hopes to profit from this dearth of supply. The company operates a laboratory on the Golan Heights, which produces a biological symbiosis and connection between the root and fungi of the black winter truffle, and a greenhouse in which the tree seedlings are cultivated for a time in an optimal environment until the seedlings in the plantation simulate natural growth conditions.
The company has partnerships with 117.5 acres of plantations on the Golan Heights with a production capability of up to another 125 acres. By the end of the year, the company's plantations are expected to extend over 167.5 acres. The company plans becoming a major player in the international truffles market by planting 2,500 acres over the next 10-12 years. In 2019, the company exported to the US a first trial consignment of its truffles. The company expects that maximum production capacity will reach 36 tons annually, which will generate annual revenue of tens of millions of dollars.
Ilsar was founded by chairman Yoel Givol, CEO Nimrod Tabenkin and CTO Tal Monchase.
Tabenkin said: "This latest investment round will allow the company to continue to realize its vision and to found advanced truffles agriculture, rich in knowhow in partnership with local farmers. The company will continue to invest in applied research and breakthrough, innovative agricultural technologies with the aim of becoming a major factor in the world truffles market throughout the entire value chain. At the same time, this investment will serve for research into new areas and thus to leverage the existing knowhow and development infrastructure to other areas in the wonderful world of truffles."
Published by Globes, Israel business news - en.globes.co.il - on March 15, 2021
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