Episode 76: Proba: Sijbrand Tieleman on raising an Extension Round and dominating a hyper-niche market

In this episode, I sit down with Sijbrand Tieleman, Co-founder and CEO of Proba, an Amsterdam-based startup tackling the massive footprint of fertilizer emissions. Sijbrand walks us through his recent €1.25M ($1.5M USD) extension round, which was led by existing investor Future Food Fund. We discuss the strategic decision to raise from the current cap table rather than burning time chasing new investors, the reality of setting achievable milestones, and why agriculture startups cannot be measured by traditional SaaS ARR metrics. Most importantly, Sijbrand delivers a masterclass on finding a competitive moat by becoming the absolute world leader in a highly specific, hyper-niche use case before expanding into larger markets.

🎧 Listen to the full episode to hear how Sijbrand navigated the delicate valuation negotiations with his existing investors to secure 18-24 months of runway.

Key Facts Proba:

Goal: To help the agri-food supply chain quantify and reduce greenhouse gas emissions specifically related to fertilizer use.
Milestone: Recently closed a €1.25M extension round, primarily funded by their existing investors, to focus entirely on business execution without the distraction of a protracted fundraising roadshow.

Alex’s Top Findings:

The Power of the Hyper-Niche. Startups often fail by trying to solve too many problems across too many industries. Proba initially explored steel and cement before pivoting entirely to fertilizer emissions. Sijbrand explains that by picking a "vertical within a vertical," Proba created a monopoly. They didn't just target agriculture; they targeted the specific emissions effect of nitrification inhibitors used alongside urea fertilizer for coffee grown in the Minas Gerais region of Brazil. "The more opportunity you give yourself to become successful, that I think is kind of a lesson... just make it super small and then extend from there... You want to position yourself in a way that there's no competition. If somebody wants to solve the problem, they more or less need to come to you."
The "Insider" Extension Round. Instead of spending 8 months pitching 100 new VCs, Proba chose to raise an extension round directly from their current investors. Sijbrand reveals that they began discussing the need for this follow-on capital just two months after closing the previous round. By maintaining transparent communication and setting realistic milestones, they secured the cash needed to focus on the business rather than the roadshow. "We kind of took a bit of an implicit decision to say... we can go out there to the capital market and basically spend a lot of time finding a new investor without guarantee on success, or we spent a bit less time together with the existing investors and basically have more time to spend in the actual business."
Agriculture SaaS is Not Silicon Valley SaaS. Sijbrand highlights a critical disconnect between generalist VCs and AgTech startups. Generalist funds demand rapid Month-over-Month Monthly Recurring Revenue (MRR) growth. However, agriculture operates on physical, annual growing seasons. Proba partnered with specialized investors (Future Food Fund) who understand that growth in this sector is a compounding, season-by-season process, not an overnight software rocket ship. "Building a business in agriculture has a bit of a different speed... things need to grow in a physical world and they grow in one growing season... The normal SaaS investors who are used to [rapid] ARR levels are not interested yet.”