US startup Mitti Labs has secured $9.5M in Series A funding to scale its AI-led technology that lowers water use and methane emissions in Asia’s rice farms, converting savings into verified carbon credits.
A particularly destructive El Niño wave and increasing costs are set to drag down global rice output for the first time in over a decade, and Asia is facing the largest volume drop.
The relationship between one of the world’s most staple crops and the climate crisis is deeply intertwined, with each worsening the other’s fate. It’s why some companies are working to make rice farming a more sustainable and resilient activity, and they’re catching investors’ attention.
Mitti Labs is among them. The US agtech startup has raised $9.5M in a Series A investment round led by Aramco Ventures, the VC arm of Saudi fossil fuel giant Aramco. It was joined by returning investor Lightspeed India, and first-time backers Godrej Industries Group, Cisco Foundation, Francis Family Fund, and Volta Circle, taking the firm’s total raised to $12.5M.
The company works with farmers in India to implement sustainable farming techniques, analysing the adoption with satellite and artificial intelligence (AI) tech. It then measures methane reductions and converts them into credible carbon-equivalent credits, and a portion of the revenue earned from selling these credits are shared with partnering farmers.
In the last year, Mitti Labs has gone from working with 35,000 smallholder farmers to 100,000 across six states in India, the world’s most populous nation, and one of its most water-stressed too. It will use the funds to scale its GeoAI platform, go deeper across India’s rice belt, and expand into the Philippines and Indonesia with new greenfield projects.
“Growing more rice with less water is one of the world’s major challenges. Demand for rice continues to grow, but record heat and changing rainfall patterns are threatening water systems and endangering food security,” said Mitti Labs co-founder Xavi Laguarta.
“With our technology and scalable operational model, we can transform how rice is grown, lower emissions and cut water consumption while building resilient livelihoods for 150 million smallholder farmers.”
How Mitti Labs uses AI and satellite tech to greenify rice farming
Asia produces more than 90% of the world’s rice, a crop that supplies half the world’s population as a staple food. But rice is responsible for 9-12% of global methane output, equivalent to the entire aviation industry. It accounts for around 1.5% of all greenhouse gas emissions, too.
Methane has an outsized impact on the planet in the short term. It’s responsible for around 0.5°C of global warming, and is 86 times more potent than CO2 over a 20-year period. Its atmospheric presence is expanding faster than ever before, and without action, human-caused methane emissions will rise by up to 13% from 2020-30, taking us in the opposite direction of the 1.5°C goal.
Meanwhile, rising temperatures could shrink rice yields by 40% by the end of the century, and are already lifting arsenic levels in the crop. Extreme rainfall has reduced rice yields in China over the last 20 years, and nearly 250,000 acres of land in the Mekong Delta, known as Vietnam’s rice bowl, are being taken out of production, partly due to the climate crisis.
To tackle this issue, Mitti Labs relies on climate-friendly techniques like alternative wetting and drying (AWD), which involves several wet and dry cycles, rather than keeping the paddy flooded the whole time. When practised properly, it can slash methane emissions by more than half and water use by 40% without affecting yield.
The tech has been around for three decades, but verifying its implementation on a large scale has been a long-standing challenge. The vast majority of rice is grown on fragmented plots of less than two hectares. These farms are too small and too many (around 150 million) for reliable data on practices, water use, or emissions to exist.
Mitti Labs is addressing this through its GeoAI engine, which was developed with support from NASA and pairs high-resolution synthetic aperture radar with field-collected ground truth and physical models to build a digital twin of each plot. This enables it to track crop health, soil moisture, and flooding at the resolution of an individual farm, rather than an estimate spread across a region.
The startup uses satellite modelling and AI to analyse historical farming practices and key environmental factors, monitor the implementation of climate-smart practices on each field, measure methane, nitrous oxide, and carbon fluxes through in-field data collection and gas chromatographs, and quantify emission reduction outcomes into carbon credits.
Aside from AWD, Mitti Labs also helps farmers perform dry-seeding, which emits less methane than traditional planting in wet soil, and improve their stubble management techniques to reduce pollution from burning after harvest.
Rice is the biggest strain on India’s water supply
Mitti Labs already runs the world’s largest AWD programme in India, a country that “carries 18% of the world’s people on 4% of its freshwater”, according to Lightspeed India partner Hemant Mohapatra.
Per-capita water availability in the country has halved since 1970, and on current trends, the demand runs 50% past its supply by the end of this decade. “Roughly 80-90% of India’s water goes to farming, and rice alone drinks more than 30% of all irrigation water on the planet. No other single decision on Earth moves as much freshwater as how a paddy is irrigated,” Mohapatra wrote.
Burjis Godrej, chairperson designate of Godrej Agrovet, concurred. “As an investor deeply rooted in India, we know firsthand how critical water resilience is for farming communities,” he said. “Mitti Labs has built a remarkable model that leverages technology towards securing the livelihoods of smallholder farmers. This model has the potential to reshape rice farming all over Asia.”
In the three years since its launch, the startup has grown to 150 employees, whose work has helped save around 500 billion litres of water, roughly the annual supply for the entire city of Bengaluru – a particularly pertinent comparison, given the city has been battling water shortages for years.
“Solving the world’s water crisis requires bringing together smallholder farmers, industry stakeholders, governments, and non-profits to transform how rice is grown,” Mohapatra said in a statement. “With its unique technology and vast network of farmer-partners, Mitti Labs can unlock new revenue opportunities tied to this transition and help build the future of rice.”
While the efficacy of the voluntary carbon market has been called into question by experts numerous times, Mitti Labs’s credits have been given an A rating from independent assessment firm Sylvera. Armed with the fresh capital, it plans to issue two million credits annually from 2028.
It’s among a number of startups focused on climate-friendly rice farming. Singapore’s Rize recently closed a $31M Series B financing round to bring its AWD-based rice cultivation network to more than 150,000 farmers by 2030, covering over 300,000 hectares.
Fellow Singaporean player AgriG8 uses a gamified digital platform to help rice farmers lower emissions via AWD. And like Mitti Labs, France’s CarbonFarm is also using AI and satellite tech to monitor rice decarbonisation activities to generate verified carbon credits.
