Agrofy is an online marketplace for Latin America’s agribusiness market, matching up buyers and sellers of farm machinery, vehicles, farmland, tools, equipment, insurance, and other financial services. The business also offers e-commerce marketing and consulting services for agricultural products companies, and is set to launch an online payment platform later this year along with the introduction of six new agribusiness categories including grain.
The startup was founded in 2015 by Maximiliano Landrein and Alejandro Larosa who have a deep history in agriculture since launching one of the first online agriculture marketplaces in 1999 called fyo.com to sell grain. It was too early for an e-commerce play, particularly as it preceded the dot-com crash of 2000, Landrein told AgFunderNews, so FYO became a brick and mortar grain brokerage and is now one of Argentina’s main brokers.
Agrofy, which has now raised $10 million across two seed rounds and a Series A earlier this year, is one of Argentina’s most successful agtech startups and counts Syngenta and Bunge as investors.
It has signed up over 5,000 companies, including multinational ag players, to list more than 65,000 products. Agrofy also has a news platform called AgrofyNews, offering industry news and real-time commodity pricing.
We caught up with Landrein and Larosa in Rosario, an agtech hub in Argentina, to find out more about the startup and how they see Argentina’s agtech ecosystem developing.
Was it challenging raising your first rounds of capital?
In our seed round, we raised capital from some of the key players in the Argentinian agribusiness market: inputs and service providers, farming and grain trading companies, among others. [Nasdaq-listed company Cresud, the largest farming company in Latin America, was a seed investor.]
Our Series A was led by SP Ventures, the leading agtech VC in Brazil, Endeavor Catalyst, Syngenta and Bunge Ventures.
We invited to join the company smart and passionate people. We have learned that having great partners is very important to the company’s success. It was challenging because we gathered very experienced and successful partners for our seed rounds.
In our case, for our Series A and B, we want to partner with investors from Brazil and the US that can help us with our global expansion. Our dream is to develop a global company from Argentina, and we looked for partners that share that vision and can work with us to achieve our goals.
What types of investors are available for agtech startups at later stages?
There are a few VCs in Argentina that invest in all types of tech companies and are starting to follow the fast-growing local agtech ecosystem. The government is doing a great job to promote and attract foreign venture capitalists. Everybody recognizes there is a huge opportunity here.
How different is the agtech sector today in Argentina compared to when you launched Fyo.com in 1999?
Wow! That was a long time ago… it is completely different. Fyo.com was one of the first agtech companies in the world, even though we didn’t use the term “agtech” at that time. With fyo we started to provide real-time information about ag markets and we created a transactional platform for grains and inputs.
I think that there was almost no venture capital in Argentina at that time, so we raised capital from local business partners that wanted to invest in the new internet wave.
Regarding traction, connectivity on farms was very poor. There were no smartphones, no google and that generation of farmers was not digital at all.
Traditional companies were not used to digital marketing. They did not have an e-commerce strategy and the majority didn’t have people thinking about it. So, in general, they considered us a threat and they turned their backs to us.
As a consequence, and in order to save the company, we turned the business model into a digital solution service provider and tried to sell them products based on the technology we had developed.
Why did you create Agrofy? What was the most challenging part of creating the business that Agrofy is today?
We have been working in the intersection of agribusiness and the internet industry for more than 18 years. We believe that online transactions are going to grow exponentially in this sector. As a consequence, traditional companies are looking for partners to help them empower their businesses with digital tools. Until now, farmers have not had an online platform where they can buy or sell all products or services. So we are developing a global marketplace that will let farmers and companies make transactions in all the categories related to the agribusiness sector.
The most challenging part is developing some services around the platform that solve the difficulties of e-commerce, such as logistics, payments, credit, trust, reputation, etc. Our solutions in this fields are designed specifically for agribusiness.
What are the main challenges for an agtech startup in Argentina today?
Probably to get product-market fit with farmers, generate revenues, and raise capital. It is also very important to show proof of concept and the scalability of the business model.
But we have great and creative entrepreneurs in Argentina. Also, there are very successful companies and unicorns in other industries. We think the same will happen in the agtech sector.
Is there any other advice you’d give to entrepreneurs creating agtech businesses in Argentina?
To focus on developing a great product and business model that can scale from Argentina to the rest of the world. And always prioritize building a great team and bringing on great partners. This is a long race and to have the right people on board is vital.