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Brazilian Ag Marketplace Raises $630k Seed Round from Monsanto Growth Ventures and Others

May 23, 2018

Grão Direto, a digital commodities trading platform based in Brazil, has raised R$ 2.3 million ($633k) in seed funding from Monsanto Growth Ventures (MGV), Canary, and OpenVC. Grão Direto plans to use the funds to expand its operations across Brazil, further develop its products and services, and partner with other tech companies and financial institutions to further digitize the grain chain.

The deal represents the first direct investment in Brazil for MGV, which has invested out of third-party funds until now. The deal closed some months ago before the leadership of MGV all left calling into question the future for the corporate venture group ahead of Monsanto’s merger with Bayer.

It’s also the latest deal for one of a growing number of agribusiness marketplace startups globally as the trend to take input purchasing and crop marketing online takes hold.

“Farmers, already so used to technology in their daily routine on the farm, can now also take advantage of the benefits of technology for their sales. We have made negotiation process easier between farmers and the buyers, bringing much more information and integration to support both sides,” explains Alexandre Borges, CEO of Grão Direto in a press release from Monsanto.

When describing Grão Direto’s business model, Borges explains, “Buyers currently contact farmers by telephone to trade grain. This process takes a lot of time and money. At Grão Direto, buyers and sellers with greater potential to do business are connected through the system and can directly negotiate their prices, delivery conditions, deadlines and any other important aspects for closing. The negotiation can be securely done through the system”.

Digital commodities platforms, coupled with data about their land and crop yields that farmers can collect and analyze, are upending traditional methods of commodities trading. Agribusiness marketplaces raised $541 million worldwide in startup funding in 2017, according to AgFunder data.

Farmlead is a similar startup based in Canada, which serves grain farmers across North America and is also backed by MGV. These investments complement Monsanto’s business and provide producers with better tools and technologies for their field activities. “The benefit of investing in startups is keeping us close to these entrepreneurs, to quickly identify emerging and promising ideas,” says Monsanto Growth Ventures Lead in Brazil, Bernardo Nogueira in the press release. “We believe that as Grão Direto grows and evolves as a company, it will enhance the ever-changing digital landscape of modern agriculture.”

The leadership team of Monsanto Growth Ventures recently left to pursue roles elsewhere in agtech venture capital calling into question the future for the corporate venture arm as the merger with Bayer gets closer to completion. Read more here.

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