Mexico , Brazil , Chile and Argentina

Latin American agtechs harvesting VC capital despite funding drought

Latin American agtechs harvesting VC capital despite funding drought

Agtechs, also referred to as agritechs or agrifoodtechs, have risen to become one of the apples of private investors’ eyes in Latin America while other types of startups, particularly late-stage ones, are dealing with a generalized slowdown in venture capital (VC) funds for their operations.

The growing interest in companies that provide agribusiness solutions is well-founded, as Latin America is seeing surging demand for agricultural products and positioning itself as the world’s breadbasket.

A report from the OECD and the United Nations Food and Agriculture Organization (FAO) published last June projected that agricultural and fish production in Latin America and the Caribbean will grow 14% over the next decade, with the region expected to account for 18% of global food exports, supplying 61% of global soybean exports, 59% of sugar, 45% of fish meal, 43% of maize, 40% of beef and fish oils, 32% of poultry and 25% of ethanol.

According to agribusiness-focused VC group Yield Lab Latam, the AgriFoodTech startup market in Latin America has grown exponentially over the last six years, swelling from an estimated market value of US$730mn in 2016 to US$1.4bn in 2022, and the outlook is for that to continue.

“Agribusiness should continue to see momentum and grow strongly in 2023, with Brazil increasingly becoming 'the man' in this sector, globally speaking,” Renato Ramalho, CEO of asset management group KPTL, told BNamericas.

The sectors specifically targeted by KPTL are agribusiness, along with biotech and climate change, as well as govtechs and IoT-related projects.

The group has invested in 110 companies since it was founded almost 20 years ago and it currently has around 1bn reais (US$189mn) under management in six active funds, with 51 firms in its portfolio.

“We were the first and continue to be among the main investors in biotech, biotech for agriculture, for health, and others," Ramalho said.

According to the executive, the group has deals in various sectors in the pipeline that will be announced at the start of next year, and it expects to make 10 investments in 2023, including follow-on funding and new contributions.

The latest edition of the Radar Agtech Brasil study maps over 1,600 agtech companies in the country and it is clear that, despite the growth in recent years, Latin America can still reap plenty more in terms of agtech financing.

According to global foodtech and agtech VC group AgFunder, the five countries receiving the most capital for agtechs in 2021 were the US, with US$21bn in 1,062 deals, followed by China (US$7.3bn in 123 deals), India (US$4.0bn in 164 deals), Germany (US$3.0bn in 100 deals) and the UK (US$1.3bn in 188 deals).

Brazil was ranked sixth for AgFunder, with 102 deals involving US$1.3bn.

With an eye on these opportunities, a few months ago Yield Lab Latam launched its third investment fund for the region, with which it expects to allocate US$50mn in seed capital to Series B (early-stage) rounds to scale up LatAm agtech and foodtech startups over the next five years.

Founded in 2017, Yield Lab Latam has offices in Argentina, Brazil and Chile and it targets investments in innovation across the entire value chain of the food production industry.

The firm has mapped more than 1,300 startups from Mexico to Chile. It is in these markets where it is seeing the biggest sources of innovation and startups in the AgriFoodTech ecosystem, along with Brazil and Argentina.


In one of the latest agtech deals, on Tuesday, Brazil’s Cromai announced it had secured 15mn reais in a funding round with the participation of local groups Baraúna Venture Capital and Agropecuária Sucuri.

The agtech, whose technology uses artificial intelligence to process drone images, spot weeds and suggest proper crop management reports, claims that its solution is present in 16% of the country's sugar mills, including the 30 largest ones. It aims to reach 33% by the end of 2024.

This is the second investment Cromai has received in less than two years, adding to a previous round worth 5mn reais.

Earlier this month, regional investment fund Kamay Ventures invested in Argentine startup Kilimo, which has developed a platform to allow farmers to manage irrigation efficiently. The value of the deal was not disclosed by the parties.

Also in December, Chilean company WiseConn, which has developed georeferencing solutions for irrigation, closed a Series B funding round in another deal with no disclosed value, led by Boston-based private equity and venture capital company Morningside Group.

This investment is expected to support WiseConn's global expansion to countries such as Australia, Europe and Brazil in 2023.

“In the context of the digital economy, technologies such as precision agriculture, continuous genetic research and financial protection mechanisms, and the sophistication of financial products such as the derivatives and insurance market, are only scalable with intensive use of data and mathematical models and statistics,” wrote Luiz Ohara, head of Financial Markets at data analytics firm Semantix, in a recent article about data usage in agribusiness.

For Ohara, there is a lot of opportunity for digitization and use of advanced data in the sector.

“On a broader spectrum, even recent demands such as chain traceability, monitoring, as well as food safety and control over environmental sustainability activities, are essentially unstructured information chains,” he said.

Because of its potential, the agtech segment has increasingly attracted the attention of consultancies and professional service giants.

Last month, PwC spent an undisclosed sum to acquire AgTech Garage, which is deemed the largest open innovation agribusiness hub in Brazil and one of the biggest in the world. Founded in 2017, the hub has over 1,000 startups connected to customers across the agribusiness chain.

According to PwC, the acquisition reinforces its global strategy and it expects to make investments of more than 1bn reais in Brazil over the next five years.

“Technology and innovation are essential to support our customers in the various opportunities and challenges that occur in the sector every day, the main one being that of feeding a world in constant change and with population growth in a sustainable way,” Marco Castro, CEO of PwC Brasil, said at the time.

“Themes such as biotechnology, traceability, operational efficiency, data analytics, connectivity in the field, foodtechs, agro fintechs, decarbonization, alternative proteins, energy transition, and ESG, among others, are on the agenda of the main decision makers of 'Agro' companies,” Castro added.


According to the Latin American Private Equity & Venture Capital Association (Lavca), VC investment in the region has resumed a more reasonable rate of growth, with a total of US$1.2bn invested in the region in 3Q22, in line with the US$1.1bn quarterly average for 2019-20.

In line with global trends, the adjustment in VC investment has extended beyond late-stage (Series C+) rounds. Late-stage startups have increasingly opted for credit lines from traditional investment banks as an alternative source of financing.

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