#113, Naveen Sikka CEO & Sudhir Rani CFO, TerViva

Naveen Sikka
Founder & CEO

Naveen Sikka is the founder and CEO of TerViva, a Series-D agriculture technology company that is building the world’s most sustainable supply chain of plant protein and vegetable oil. Utilizing experience in management consulting, technology, natural resources and agriculture, Naveen established TerViva to understand and extend the benefits of the ancient pongamia tree’s resilience and protein and oil-packed beans. TerViva has since introduced pongamia as a new commercial crop that converts distressed farmland into sustainable, productive acreage. Under his leadership, TerViva has unlocked pongamia’s potential as a climate-friendly, nutritional powerhouse for feeding the world’s rising population. TerViva is the first company to develop high-yielding, non-GMO cultivars of pongamia and to create edible protein and oil from its beans to feed people. Product partners draw on TerViva’s plant protein and vegetable oil supply chain that is world class in its low-carbon intensity, traceability and cost competitiveness with existing oilseed supplies.

Naveen and TerViva have been featured in the Wall Street Journal, Forbes, Food Navigator, Growing Produce, All About Feed, Food Business News and Pacific Business News, among other leading publications covering sustainable innovation and technology in agriculture and food. Naveen completed his MBA from UC Berkeley where he co-chaired the development of the Berkeley Energy and Resources Collaborative (BERC) in collaboration with Lawrence Berkeley Lab to evaluate its existing portfolio of commercial technologies. Prior to earning his MBA, Naveen worked as a management consultant at Gemini Consulting and TPI. He graduated as a Class Senior Marshal with a BA from Columbia University, during which time he studied and worked in France and West Africa. He is a mentor and member of Environmental Entrepreneurs and the New Innovators Council of the World Resources Institute.

Sudhir Rani
CFO, Board of Directors

Sudhir brings extensive financing and structuring experience to TerViva. Before joining TerViva in 2011, Sudhir was a Director in the Private Equity group at D.E. Shaw & Co. in New Delhi, India where he structured, negotiated and conducted due diligence on growth capital investments. Prior to that, he spent eight years at UBS in Asset Management and Investment Banking. Sudhir has an MBA from the Wharton School at the University of Pennsylvania and a BS in Industrial Engineering and Operations Research from Columbia University.

Bigger Than Us Episode 113

This transcription has been lightly edited for readability.

Host Raj Daniels  02:38

So usually I like to open the show by asking my guest something interesting about themselves. But today I’m going to change it up a bit. So Sudhir, if you could share something interesting about Naveen and Naveen, about Sudhir?

Sudhir Rani  03:03

I’ve got a lot of stories. I don’t know how much time you have. I’ve known Naveen since 1993. Moved to the high school that he went to my sophomore year, and we spent the better part of the next decade in school together. We went to undergrad together and then obviously stayed close friends, roommates over the years. So I’ve got a lot of stories to share. Naveen has always been one of those that wanted to do something a little different, wanted to use his skills to make things better and didn’t want to follow the traditional path. And he’ll tell you about his background and kind of his work that he’s that has led us to coming back together 10 years ago to start TerViva.

Host Raj Daniels  03:57

So what’s something interesting about him?

Sudhir Rani  04:00

Might need a second to think about it. 

Naveen Sikka  04:08

I’ll share two things that are very interesting about Sudhir, professional and personal. Professional, first Sudhir and I were a part of a big group of friends in high school and college. And as we kind of all meandered through our professional careers, some of us became doctors, some of us became lawyers, some of us decided to work in business. I gained an appreciation for Sudhir’s very astute business mind. He has great vision into the direction of the future of business and the future of our economy. And he’s really good at sort of seeing the macro trends and understanding how they’re going to play out for specific sectors. So I think that’s just a unique talent. He’s very good at sort of assimilating fact patterns and sharing insights on the professional side on the personal side, Sudhir has extraordinary hand-eye coordination. He’s the kind of guy that can, you know, pick up a golf club for the first time or pick up a dart to play darts for the first time. And he’s just sort of nonlinearly good at it. And I think he probably missed a calling in his life as a, you know, either a baseball player, we want to kind of give him the athletic credit or maybe a dart player at a local bar. So it’s still time for him to catch up on that last one. 

Host Raj Daniels  05:29

Sudhir, before you chime in, Naveen, you know, not to pigeonhole CFOs. But just CFOs I’ve been around usually aren’t able to take a macro view of you know, like you said, connecting the dots or seeing the larger picture. So I really appreciate you sharing that.

Naveen Sikka  05:45

I think that’s what actually makes him a very unique finance professional.

Host Raj Daniels  05:51

Absolutely. Sudhir, your turn.

Sudhir Rani  05:55

I think the thing that I’ve always enjoyed about being friends with Naveen and obviously now working with him is he knows how to rally people around anything. It could be like the bar that we go to, but in this case, the type of business and how we want to build our solution. I think that’s a unique set that new Navin has been able to get over his lifetime. You can ask all of our friends in high school and college, you know, people want to know what Naveen is thinking and where we want to go. And I think professionally, I’ve learned a lot from how to build a business from him.

I think in particular, the thing that I learned the most, which is kind of a unique set that I think a CEO is supposed to have, which is to build processes and the management skills that are important to help everybody, even people that are really good at something technical, or finance or whatever it may be, but to help them be the best they can be by continually learn how to not just manage people, but to create processes that were not trained, right, how to be patient and how-to, you know, do the things that need to happen and trust that other folks that you’ve hired, get the job done.

Host Raj Daniels  07:21

I appreciate you sharing that. But I’m not going to gloss over the fact that you both brought up bars. Sounds like it sounds like Sudhir, while you’re playing darts, Naveen will rally the troops to cheer you on.

Sudhir Rani  07:37

It’s a social game. We are on a 10 year journey here. And you know, if you’re not having fun, you’re dead. You’re doing something wrong.

Naveen Sikka  07:49

Okay, Raj, I’ll share. I’ll share one more thing about Sudhir, but since you brought up bars, another talent of yours is that he can make a jalapeno, anything. A jalapeno martini, a jalapeno margarita, a jalapeno Moscow Mule. I think he’s sort of channeling you know, as you know, we’re Indian American by background, he’s sort of channeling the best of our heritage with the modern bar scene.

Host Raj Daniels  08:15

You know, it’s funny, you’d mention that because our COO is also Indian, his name is Roshan. And this year, he decided to start growing things. And the first thing he started growing were peppers, jalapeno peppers, other kinds of pepper. And now he’s bottling his own hot sauce. So I mean, must be something in the blood.

Sudhir Rani  08:31

I need to meet him because I have to admit that I have a small garden in front of my house. And there are two things growing right now. And one is it up a padron pepper, and the other is a serrano pepper. They are not for cooking.

Host Raj Daniels  08:46

That’s amazing. Amazing. So switching gears here. Let’s move on to TerViva. Can you perhaps give an overview of TerViva and your role at the organization?

Sudhir Rani  08:57

Yeah, absolutely. We started TerViva 10 years ago with one fundamental theory of change. And that is that we need to grow the food that we consume much more productively and far more sustainably, through reforestation and regenerative ag practices. Which basically means that we need to use the land that we have better, not plow down-sensitive ecosystems to plant more of the same traditional crops that we are growing. So we make carbon negative plant protein and vegetable oil products that are superior from a functionality and taste perspective than the ones that make using soy yellow pea and palm oil. And the way we do that is we work with farmers to plant pongamia which is an ancient Asian legume tree crop and we do so on idle or abandoned farmland to produce this vegetable oil and protein-rich beans. And the thing that got us excited 10 years ago is that certain varieties of pongamia can produce five times or more beans per acre than soy. And we can dramatically reduce the need for further deforestation. That has been happening over the last couple decades to plant more soy.

So our thesis is that pongamia will have three major advantages. One is functionality and use, and that is taste and all the things that matter in how you make food and food ingredients. The second is cost. And that is driven primarily by the fact that it just produces way more profit per acre than you can with a traditional annual crop like soy.

And third, and perhaps a big part of our mission is sustainability. These trees that will grow over decades are natural carbon sinks, and TerViva essentially is providing a nature-based solution to future needs.

Host Raj Daniels  11:17

Naveen, do you have anything to add?

Naveen Sikka  11:19

Yeah, I mean, I think you asked about roles, Raj. Sudhir and I, we wear the hats of CEO I mean, as the CEO, so there’s the CFO, but we’ve worn a lot of hats from the inception of the company to today. I think today, we actually wear the very traditional roles that those acronyms represent. So Sudhir leads our finance team, leads effectively the construction of our pro forma economics as well as all the day to day finance and accounting needs of the company, which has grown to about 100 people. And I am the titular CEO that takes a look at strategy and what’s going on in the horizon and helps build a seasoned management team to execute on that strategy. When we started, we did it all, like everybody. The moment that sort of always comes to mind is when we moved out of our second scrappy office into a nicer office, we were actually growing these pongamia trees on kind of like a balcony, here in Oakland. It could have been mistaken for something else that grows in Oakland. And I remember the hard work that Sudhir and I had to undergo to like literally lift like, probably like hundreds of pounds of soil and plants, and dispose of them as we finally got to the point where we’re graduating and moving to a real office, and we were going to keep the growing to where things should be grown. So it’s it’s been a fun journey.

We started TerViva 10 years ago with one fundamental theory of change. And that is that we need to grow the food that we consume much more productively and far more sustainably, through reforestation and regenerative ag practices.

Sudhir rani

Host Raj Daniels  12:46

So you both mentioned the pongamia tree. Two questions. How did you guys land on the idea of pongamia tree? And what is TerViva mean?

Naveen Sikka  12:55

Yeah, take a stab at that one. Right. So the idea really came from a trip that I took to India in 2009, both there and I had connected philosophically on what we thought business could do to make the world a better place. I was looking at the more of the sort of energy side of the equation at the time. And Sudhir has, of course, a background in finance and was investing in companies that were sort of across the spectrum of making impact.

I went to India, I saw what severe described, these pongamia trees growing in some very difficult agricultural conditions and producing a lot of beans and I sort of saw semi industry of this happening in India. But the end markets were you know, very niche and pretty low value. They were these Ayurvedic, topical, and sort of gut health applications that pongamia beans were being used for. And so the light bulb that went off at that time is that pongamia could be a production style agriculture crop, kind of like almonds or citrus, growing, though, on this poor-quality land, and producing vegetable oil and protein that could serve a broad basket of needs, that crops like soybean and palm syrup. So it was pretty much a eureka trip, actually, in April of 2009, for four days, straight California to central India, looking at what was there. And then coming back and convincing first, my family and then Sudhir and some others to give this a go.

And the seminal moment the formation of the company was about a year later, in 2010, we had entered ourselves into a number of business plan competitions and investment prize opportunities. And we actually won a series of them right in Q2 of 2010. And we hadn’t yet actually formed a company or formed an entity, a bank account. We were using the name TerViva because it connected the very essence of what we thought the street could do which is Ter for land and Viva for life, bringing new life back to the land. So it’s sort of a coined name for the company. And it was that moment where Sudhir, myself and some of the other people around the company, that early stage in 2010 said, let’s go for it. Let’s form the bank account, let’s cash these checks. Let’s, let’s try to build this thing.

Host Raj Daniels  15:15

So, where specifically in India, were you?

Naveen Sikka  15:19

I was in the Indian states of Andhra Pradesh and Karnataka.

Host Raj Daniels  15:24

and feel free to get as technical as you need to. I know, there’s a lot of regulation around importing seeds, flowers, foreigner from other countries. Can you share with the audience some of the challenges you had to go through to get pongamia? 

Naveen Sikka  15:39

To me, it’s black and white. They are very clear laws in certain jurisdictions around the world on what we call biopiracy. India, as a country and other countries in emerging other emerging market countries, have been taken advantage of, and have had their biological resources exported and appropriated. It’s sort of the history of agriculture. So we actually decided very early not to work with India derived pongamia trees. We’ve worked with a group out of Australia that did some selection work in the natural environment, there were pongamia is basically considered a street tree and ornamental tree. And there’s no sort of intrinsic intellectual property value to those trees. And those are the trees that we’ve actually built our program off of to date. Now, what’s interesting, Raj is that in India, there’s a robust supply of pongamia beans today. There’s millions of tons of these beans that are used for the kind of niche applications that I mentioned earlier. We can actually take those beans, which are just beans that are currently used, and we can process them into food-grade products. And that’s what we plan to do with our business in India.

Host Raj Daniels  16:54

And what about the regulations getting them here to the US?

Naveen Sikka  16:58

At least for Australia, you have to file permits, both on the Australia side and on the US side, to import or export, depending on where you’re looking at plant-based material. In India, there’s a much stricter regimen of controls that are, you know, seriously at the local state and federal level that we’ve explored. But we’re not actively looking to export Indian genetics.

Host Raj Daniels  17:24

Got it. And it’s interesting, you mentioned biopiracy, I had no idea that such a thing existed till about two or three years ago, when I read a book about the history of tea, and how tea was stolen by the British from China, and then planted in India. But I had no idea that such a thing even existed, so I appreciate you shining a light on that.

Naveen Sikka  17:49

Tea, bananas, citrus, avocados mangoes, you could go on and on, right? Mangoes is a more recent one that’s particularly concerning mangoes being basically the provenance of the Indian subcontinent. And it’s, and I think it’s really, really important to respect that our natural assets really are our common goods. There’s a modern history of agriculture that has taken, for example, soybean seeds and corn seeds and genetically modified them and claim them to be proprietary. The intellectual me sort of understands that. But the humanist element of me feels that it’s very difficult to restrict elements of nature from the communities from which they come.

Host Raj Daniels  18:40

So you know, you mentioned the humanist part of you. And you mentioned philosophically earlier crux of our conversation is the why behind what you do now, both you mentioned, you know, your friendship, and I think you went back through 1993 I believe so there said, but why TerViva? Why did you decide to launch it? There are so many other things you could do with your skill set. You know, what was the impetus? 

Sudhir Rani  19:03

I can get started on that. I mean, for me, I grew up in a very traditional finance background, I did investment banking, asset management, and private equity. And while I was going through that journey, even in the first year of investment banking, when I was like 21, or 22, right out of undergrad, I always wanted to do something outside the guardrails of finance. You know, I remember trying to pitch deals to my Managing Director as an analyst, and I got booted out of the office more than once, it wasn’t something you do, I joined a fund to funds division after banking. While most of my friends were going into private equity or business school.

And then, you know, for me, I think a big thing changed. My mom got ovarian cancer when she was 45 and passed away and I was 25 at that time, right in the middle of that finance career. And it just created a further urgency in my mind to do something, not just different, but pursue things that are bold and unique. And I didn’t know what to do. When I talked to my friends about this. For the longest time, I’m like, I want to do something different, but I don’t know what. And so, to me, I always like to try to keep myself open to ideas to be creative. You know, I met my wife right around that time. We moved to India. I worked in the private equity division of a global hedge fund. It was a great time to travel around the country that I was born in but left as a kid, where, you know, all my family has come from. And it changed my perspective on what I thought was important. And it allowed me to take risks and chances.

So I guess the last story I’d share about that, briefly is that I decided to come back to business school, right at the essentially the peak of my career at D.E. Shaw there after a couple of years. I remember the last thing I did before I left was to interview second-year business school students from Harvard and Stanford to come work for me as an analyst. And I remember doing those interviews, thinking, you are going back to business school, and the back of the bus. And to me, it didn’t feel that way. It felt like a reinvigoration of my ability to kind of sit there for a couple of years, meet a lot of really cool people, which I have, and work on this thing with Naveen, which honestly, I would not have done if I didn’t take those steps.

Host Raj Daniels  21:51

Sudhir I appreciate you sharing that personal story. Naveen, what about you? What’s your why?

Naveen Sikka  21:57

We have a shared journey in some respects. Sudhir’s story is very powerful. I was right there with him when his mother was passing away. And death is a great reminder that we’re only here for a certain amount of time. And so, you know, I think it’s, it’s mobilizing to try to commit to doing something that you think will really matter. I would add that, you know, we recently crossed over the 50th anniversary of Milton Friedman seminal work on capitalism. And a lot’s changed in 50 years about the role that business leaders think the private sector should play and making the earth a better place. And now you have guys like Ray Dalio and Jamie Diamond and so many others saying, hey, it’s got to be way more than just shareholder return.

Sudhir and I saw that you know that we were a part of that generation in the 90s and early aughts that saw the potential for business to be a conduit of change. And you didn’t necessarily have to go serve in government or go work for an NGO or nonprofit to make that happen. So I think, you know, we always felt like once we trained up and we talked about this, actually, once we trained up, we would try to work in impact-oriented businesses. Of course, we had no idea we would do it together or would come this far. But it’s something that was a part of our shared bar conversations from many years ago.

Host Raj Daniels  23:26

So let’s talk about that for a moment. So you’ve been doing this for 10 years now. What are some of the challenges both professional and personal you faced on this journey? And specifically, I want to go back to that comment you made regarding the Milton Friedman and the 50-year tipping point, because I know that there have been times when I’ve struggled when I had my own software startup about five or six years ago. And the goal of the startup was to create more community and connection between individuals. And as we’re walking on this journey, and I’m trying to convince people that no, we need to do things differently. And, you know, whether it’s peers, whether it’s family, there’s pushback regarding, you know, what about making money, what about notoriety? What are some of the challenges you’ve had in your journey and how you’ve been able to handle those?

Sudhir Rani  24:19

Neither Naveen nor I grew up in a wealthy household. We’re very much middle-class kind of upbringing. So we had great parents, great brothers, that have helped us along the journey, and great friends, you know, get into finance and all of a sudden the world looks different. And you start to pursue monetary compensation as your primary driver because in finance at least, that is how you determine whether someone is good or not, for the most part, and so getting off of that train is rather difficult. And for the better part of the last 10 years, Naveen and I have sacrificed ourselves, and our families, in particular, have sacrificed a lot, allowing us to kind of pursue our mission here, TerViva. I guess what I would say is that you have to ask yourself, what is important? And for me, you know, all of those things are always important, I’d be lying if I didn’t say that money or, or fame, or one of those things didn’t generally matter. But how you get there, I think does matter. I want to live my life. If I’m not considered broadly successful by society, being successful by the pursuit of what I think are meaningful, and building something that’s unique that connects to the broader mission.

Host Raj Daniels  25:57

Naveen, do you have anything to add?

Naveen Sikka  25:59

Yeah, I’ll just sort of pull up something I said earlier, Raj, I think it’s gotten easier to cut a path that Sudhir and I have cut. I mean, I’m not trying to shortchange what we’ve done. But we’re insiders, you know, we spent 10 years in investment banking and management consulting. During that time, we saw the changes that were happening in business, it’s become increasingly easier to both strive to be a profitable organization that returns capital to shareholders, and to meet broader social needs. Because consumers care about that. Right? Consumers being the ultimate purchasers of everything, you know, whether it’s electrons or protein shakes.They’re caring more and more about buying the right kinds of things. And they’re driving change through many industries to make sure that they’re getting what they want. So I do think we had this sort of core belief on how we wanted our careers to go. And we’ve also benefited from the fact that business as a space has moved toward social impact. 

Sudhir Rani  27:14

Can I just pick on that, briefly on this, this idea of shared belief systems? I think it’s pretty interesting, you know, started hearing about the idea of shared belief systems, you know, call it six or seven years ago. I’m sure it was there before, but I wasn’t really privy to it. And as I researched it, it kind of made more sense. And I think what has changed in the last call it five years, 10 years, is that, you know, I think we have the opportunity to kind of be the central rallying point for lots of rapidly growing and sometimes independent shared belief systems around the world.

So to give you an example of that, you’ve got folks that believe in organic, clean food, climate change, obviously, is a big deal. Those people that are anti soy, because of, you know, the biological effects on the human body, perhaps or on climate, animal welfare. There’s many of these things and they’re all coming together. And it’s becoming this more much more cohesive group that believes what they believe, and it’s rapidly shifting how businesses see their interactions with consumers.

Host Raj Daniels  28:31

I agree. And in my mind, I kind of see this venn diagram that opens and shrinks into concentric circles and opens up again. So I like the comment about shared belief systems. Before we go on, you mentioned the pongamia tree, can you share all the uses for the fruit itself, the seed and the shells?

Sudhir Rani  28:50

So pongamia itself is a crop. It produces beans in shell, and this shell is kind of like a peanut husk if you will. So you can kind of open it with your hands, but we use the shell. And that leaves us with essentially two things. One is a dry woody mass, biomass for the shells, and then a bean that has essentially two things in it. An oil, crude oil, and a high protein meal. And pongamia as Naveen mentioned earlier, has historically been used kind of for because it’s so bitter the oil, it hasn’t really been used in food applications, but more in kind of ayurvedic medicinal applications. And functionally what everybody has been able to figure out over the last, you know, four or five years is how to remove these flavor compounds that make the oil and the meal very better. And we use traditional oilseed processing equipment with some secret sauce for the production itself. A composition and method patents that we’ve filed and have to reduce the bitterness in the oil and the protein. So now you have essentially two major products. One is a heart-healthy, extremely tasty vegetable oil for cooking, sauteeing, and other food ingredient applications, and a protein product that can go into all sorts of alternative meats, dairies, and food ingredients that are now growing at pace. The shells, we’ve done some tests in the past. Our plan isn’t really to monetize that right now. But we know that we can, you know, pelletize it and burn it.

Host Raj Daniels  30:49

Just another technical question. How do you harvest the beans from the trees?

Sudhir Rani  30:54

Yeah, it’s a good question. So one of the things I didn’t mention is that we work extensively in Florida for the past nearly decade. There, you’ve got, historically a million-acre citrus farm. Citrus trees have been planted and growing really well, mostly for the orange juice market. Unfortunately, there is a disease that’s affected that crop and now a supermajority of those acres have come out of production, leaving hundreds of thousands of arable land that is essentially idle, because there’s not a lot of other crops that can grow on those soils at that scale, and it’s really our opportunity to use that land better. And when we got there, you know, in 2010 and 2011, we learned very quickly, it wasn’t good enough just to provide growers with a high yielding crop. You really needed to create all of the best agronomic practices surrounding the growing, right. So it’s genetics and the environment and optimizing those for yield and costs. And so to your direct question about harvesting, we knew that we couldn’t hand-harvest this crop. It’s just too expensive to do so. And so we use a mechanical extractor, essentially a harvesting machine that Californians know all about. The million-acre pistachio and almond industry uses shaking equipment. And we have developed methods to use that same equipment.

Host Raj Daniels  32:43

And you mentioned provide growers. what is the business model? Do you own the farms grow the farms? Do you franchise the trees? How does this work?

Sudhir Rani  32:52

Yeah, good question. Raj. We up this is a 30-year crop, it will start producing and year four, the beans. We partner with these growers over that time. And what that means for us is that we sell these trees to growers, they will use their land to farm it, which is what they’re best at doing, better than we can. We help provide the data analytics and the agronomic best practices around managing weeds and harvesting and things like that. Ultimately, we then buy back those beans from the grower through an off-take agreement. We take those beans and we process those beans into the vegetable oil and protein. So the growers are the farmers, farming these trees on this idled land. We provide the technology on the front end on the trees, these non-GMO, non genetically modified varietals that we’ve developed. And we provide a market for the farm itself.

Host Raj Daniels  33:59

And I know I’m getting in the weeds here, but I’m just really curious, do you finance the farmers? Do they bring their own financing? And follow up question is, can they be grown in Texas?

Sudhir Rani  34:14

One of the first grow first plantings was, in Texas in Port Lavaca. And in the southern part of Texas, it can grow there. You know, one of the things that we realized early on is that we wanted to leverage the fact that this citrus farming industry actually grew trees and the associated infrastructure around the trees that pongamia can drop right into. In terms of your first question. The financing model. Historically, growers have paid for trees and we’ve done the other things like buying back the beans, however, we are now looking at creative financing solutions. So in particular, we recently announced a partnership with Farmer Mac, which is the Freddie and Fannie of the agriculture industry. And they’re looking to use their asset base and their capital to further develop their sustainability prowess. And obviously, the million-acre, distress that they see in citrus is an area they can help. So they’ve, they’re going to provide debt financing to growers to develop pongamia fields in Florida. And so a grower can use his or her land, borrow capital from Farmer Mac, develop those fields for the yields that they’re gonna get.

Host Raj Daniels  35:55

Thank you. So 10 years on this journey, 11 years? What are some of the aha moments or surprise moments you’ve experienced? And Naveen, feel free to chime in? Yeah,

Naveen Sikka  36:07

A lot of things have changed since we started. Probably the only thing that’s remained consistent is that we continue to work on this tree. I think it’s important, and I’ve learned when you build a business like this, that you’ve got to have a true north, Raj, you’ve got to know what you’re trying to achieve overall. And I think Sudhir said it perfectly right upfront. For us, it’s about climate-resilient, low carbon, profitable agriculture. That’s always been our goal, but how to get there has very much changed. So, you know, we indicated upfront that we started by thinking about this tree for biofuel, and for livestock feed. And about halfway through the journey, the plant-based food movement kicked into overdrive. Now everybody’s interested in plant-based burgers and nut milks and alternatives to dairy and meat. And we decided to capitalize on that we decided to see if we could actually take these beans, and further processed them into food-grade plant protein and vegetable oil. And we knew we would need to do that in a way that was natural, that wasn’t loaded with chemicals in the processing, because that would make this not attractive to consumers.

So it was a gamble. And it worked out. And now we very much position ourselves as a company that makes these food ingredients for plant-based foods from this beautiful tree. But it didn’t start that way. What stayed consistent, is the goal of getting a lot of these trees in the ground, by getting consumers, by getting the demand around the products that we make whatever those products would be, so that we could achieve those impacts of low carbon agriculture and climate-resilient food supply. And really central to what we do is we think a lot about farmers. We need to continue to make farming a profitable business in the world, especially in light of all the problems that are out there with climate change. If we don’t do that, farmers will stop farming and will have big problems in food security.

Host Raj Daniels  38:09

Sudhir, would you would you like to add anything?

Sudhir Rani  38:11

Yeah, I think, you know, we ask ourselves, what if you could grow trees that just produce way more soybean like puts, but grow it on the millions of acres of farmland that currently are out of production? So it isn’t about replacing the current soil acres, right? You ask anyone, we’ve got 300 million acres of soy planted worldwide, you know, I think 50 to 70 million acres of palm oil planted worldwide. And it’s the last hundred million acres of soy that were planted or not in the Midwest, but rather insensitive wetlands and rain forest and other areas. We need another hundred to 200 million acres just to kind of feed the glowing growing demand for food. And so for us, what has always been consistent and true as being said is that as these demands for soy-based products and other kinds of products grow, the land base is going to continue to be impacted. And if we can do something about using what we already have better, then we can make a change.

And in terms of surprises on the journey. I mean, I think we’ve been hit it, you know, the rapid shift in consumer preferences towards plant-based foods, not just by vegetarians, but also through from meat-eaters is a game-changer. I think it’s gonna allow a lot of companies including ourselves to bring forward new and innovative technologies. And obviously, we’re using interface solutions for that. And, you know, if I had to share one thing consumers want now, and what we’ll want going forward is that consumers are going to want healthy, tasty, and sustainable sources. They’re gonna want to know where it came from, how it’s grown, and that what they’re doing is having leaving a positive impact around the world.

For us, it’s about climate-resilient, low carbon, profitable agriculture. That’s always been our goal, but how to get there has very much changed.

NAVEEN SIkka

Host Raj Daniels  40:15

So while I have you both in line, which one if you recognize that opportunity?

Naveen Sikka  40:19

Interesting question, Raj. Sudhir actually flagged for me in 2016, the momentum around plant-based foods and the need for us to pivot toward that market to more than anything, generate continued investor interest in what we’re doing. The intellectual in me initially resisted that, because in agriculture, most of our commodity crops don’t actually go to plant-based foods or even food, they go to energy and to livestock. And I’ll still maintain that the biggest impact on pongamia can have as a crop, in the long run, is replacing soybean and corn like acres, which are, you know, 80-90% used for energy and for feed, and not really for food. So, we dipped our necks into the market.

There was, for me a pretty pivotal moment that accelerated my thinking on moving into plant-based foods in general. And actually, this is a phone call that, Sudhir probably remembers, we were both on a phone call. It was pretty late at night here in California. And we had gotten connected to a senior executive in the food industry, in the food and feed industry in India. And we arranged for a time to speak to this person, he called him up, actually, I conference Sudhir in and just called him up directly on his cell phone. That’s what he asked for us to do. And he was in Mumbai, and it was in the morning. And you could tell he was walking on the street, it was very noisy. He’s a very senior person, carving out some time for us. And I just got straight into the pitch. I tell him, you know, wouldn’t it be amazing if we took this pongamia tree that’s already well known in India, and we made biofuel and livestock feed for India, for the growing needs for those products. And he listened. And he said, yeah, that would be really exciting. Then he said, you know, you should also look at doing food. Because people in India really need food.

And it was a very simple way of saying, Yes, we all know, a lot of the things we make agriculture go toward feeding animals and powering cars. But there still is that part of the food supply chain that’s underserved, right, where you don’t really have affordable food locally produced and accessible to everybody. And that’s where his that’s where this particular person’s mind was at. It was humbling, you know, off any of the streets of Bombay background, you know, you can sort of visualize what’s going on there. And, for me, it was a real turning point to just have the vision to try to see if we could land this in the food markets.

“…if I had to share one thing consumers want now, and what we’ll want going forward is…healthy, tasty, and sustainable sources. They’re gonna want to know where it came from, how it’s grown, and that what they’re doing is having leaving a positive impact around the world.”

SUDHIR RANI

Host Raj Daniels  43:01

I appreciate you sharing that before we go further. Sudhir mentioned earlier, 30 year tree. What does that mean?

Sudhir Rani  43:08

Well, it’s a permanent crop, so it will live for actually more than 30 years. We’ve seen trees in Florida, where it’s been grown for over 100 years. We’ve seen trees in Hawaii that are over 100 years old, still producing crop. But in your traditional permanent crop setting like almonds and pistachios you typically rotate out of those trees after about 25 or 30 years. So it starts producing in year four, and it will produce for another 25 years and at some point, you will probably want to replace them with new varietals.

Host Raj Daniels  43:56

So it’s, let’s call it 2025. What does the future hold for TerViva?

Naveen Sikka  44:07

We see this crop having the potential to be on millions of acres. It’ll make food, it will make feed, it will make energy. It’ll make everything that you can get out of big-scale crops like corn and soy and palm. And we’re beginning to think if we plant 100 trees, an acre, even 5 million acres is 500 million trees. We’re starting to think about how we get there. What kinds of resources we need, what kinds of partners, the food enact supply chain is long and slow and doesn’t necessarily take to innovation easily. And so I think the next big thing for us is to court the biggest partners in our space that really care about all the things we keep mentioning you know, food security, climate change, low carbon, farmer livelihood, find those people so they can help accelerate this journey, right? We’ve always said, This isn’t about us or and this isn’t even about us, this is about the tree. A tree that has dramatic potential to improve a lot of what’s wrong right now and will continue to be big problems going forward. So I’d like to see us really stitched together with some of the most influential players in the food and ag supply chain, and scaling pongamia very aggressively. I do think that means that we’ll look very different five years from now than we look today. But I think that’s okay, so long as the mission of what we do, and its relevance is cemented into how we conduct business.

Host Raj Daniels  45:41

Sudhir, do you have anything to add?

Sudhir Rani  45:43

I think that was well said. I mean, I think consumers are also going to be important to how those constantly evolve in the types of products we bring to market and the channels in which we go to. We’re closely listening to the partners that we have now, both on the farming side, as well as on the consumer side. You know, I think from my vantage point, one of the things that I want to be able to bring here is innovative financing tools for farmers to deploy large scale pongomia plantings. And I’m very excited because I think finance and ESG are becoming much more real. And as we continue to get these food products into the hands of consumers, we’re going to have an opportunity to really do pretty cool stuff around finance and structures.

We see this crop having the potential to be on millions of acres. It’ll make food, it will make feed, it will make energy.

NAVEEN SIKKA

Host Raj Daniels  46:43

You know, you both have made this tree sound like a super tree, I think you should have its own campaign.

Naveen Sikka  46:49

It is really an amazing tree. It’s also emblematic, I think of many other natural assets that we have. Other types of crops, that if consumers are willing to eat and try new and different things like they are today, I think you could see a couple other pongamia has come out there and a couple of dozen other, more niche crops meet the food needs of our planet more sustainably. So we hope to kind of be paving a path here for future innovation using our broad biodiversity.

Host Raj Daniels  47:19

Which sounds like a beautiful path. So before I get to my last question, I want to just thank you, gentlemen, it’s been a great conversation. I’ve enjoyed this experiment, and I appreciate you guys participating. The last question is, and you can take this individually if you could share some advice or words of wisdom with the audience, what would it be?

Sudhir Rani  47:38

I will start. I will say that building a company being an entrepreneur is gonna be a lot more fun and harder than you think. I think, for me, the key has been having the chance to work with one of my closest friends. As Naveen knows, there’s been lots of dark days, over the last decade, but there’s also been, you know, amazing ups. And I think, for us, the key is to be humble, to be content with the mission that we’ve set ourselves to. And I guess I’ll leave with the quote that one of our advisors, Mark Tercek, who is the former CEO of the Nature Conservancy, recently put up on LinkedIn that I really liked. And it goes like this: “Think big, act big, try to do the right thing, period.”

Host Raj Daniels  48:38

I love that.

Naveen Sikka  48:39

I love that quote, too. And I’ll borrow from the last part of that, quote. It helps a lot when consumers, all of us, buy our values. Meaning we purchase things that reflect the world that we want to live in. It really does help a lot. Maybe sometimes it feels like your vote in a presidential election. My vote doesn’t matter. But it does actually. Right. If everybody voted, then that would matter. Right? So I would say the same thing. If everybody purchased their values, we would see even faster change in energy in food and health care in education. We would not be here if it were not for consumers deciding that they want something different. So please keep going out there and buying your values.

www.terviva.com

Before we go, I’m excited to share that we’ve launched the Bigger Than Us comic strip, The Adventures of Mira and Nexi.

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