Contxto – Guess what’s growing in Brazil? Funds for Agrotech.
This week German BASF Venture Capital announced the channeling of US$4 million to Brazilian fund AgVentures II. This fund is run by SP Ventures in São Paulo, specializing in agribusiness from farm to fridge.
AgVentures II, beside having admirable punmanship to its name, aims to help 20 to 25 startups in Latin America. It is currently the only fund in Brazil with capital tagged exclusively for agrotech development.
BASF in Latin America
The investment is BASF Venture Capital’s first venture into caipirinha country. Furthermore, the fact that with this investment makes BASF one of the primary investors in AgVentures II just showcases its interest in Latin American agrotech.
Through this funding partnership, BASF hopes to get further insight into the agrotech market. Moreover, BASF aims to work with the young startups of SP Ventures’ portfolio.
What’s even more interesting is how this German venture capital (VC) firm aims to leverage the partnership and sow the seeds for future direct investments into Brazil and Latin America.
Growing potential in agriculture
Know what region the World Bank says has the largest potential supply of new land for rain-fed agriculture? Sub-Saharan Africa (yeah, I thought so too…).
Know what region takes second place? Latin America and the Caribbean.
However, Latin America makes for a more attractive prospect, since it has more logistical infrastructure for agriculture. For investors, this translates to bigger potential in exporting and moving agricultural products around.
Now, to call Brazil an agro-giant is an understatement. Agribusiness made up 46 percent of Brazilian exports while accounting for 26 percent of the country’s GDP in 2016. Plus, agriculture gives jobs to more than 32 percent of the population.
However, tech is needed to reap an even bigger harvest. Which is why the agrotech startup scene is also so fascinating, as we’ve discussed before. The total number in the country reportedly nets up to around 300 startups.
Add more technology to this equation and it becomes clear why BASF Venture Capital is so interested in what grows in this part of the globe.
-ML
