“We are going global together with our partners in the market, however this round still focuses mostly in Latin America where we already started operations,” Mariana Vasconcelos, CEO & founder of São Paulo-based digital agtech startup Agrosmart tells AFN.
The digital agriculture platform recently booked a $5.8 million Series A, receiving backing from Brazil’s second-largest banking giant Bradesco’s Inovabra Ventures fund, as well as computer manufacturer Positivo Tecnologia’s corporate venture arm.
Snapshot: All about Agrosmart
Agrosmart uses big data and analytics to help farmers across nine countries increase the efficiency and sustainability of their operations across a diverse range of crops — grains, coffee, sugar cane, cotton and fruits. It captures data from different sources, including soil sensors, drones, and satellite images to “generate intelligent agronomic models based on the genetic material, soil type and microclimate of each field.” Its software analyzes this raw data and then uses machine learning algorithms to make recommendations on everything from seed placement to climate modeling. The end result? Agrosmart says it has helped farmers produce savings of “up to 60% water and 20% energy.”
But farmers aren’t Agrosmart’s only customers; Cargill, Syngenta and Coca-Cola are some big name corporate clients that use the platform to monitor and benchmark the sustainability of their supply chains, provide transparency to their clients, and understand the climate risks associated with their businesses. The US soda juggernaut uses Agrosmart to monitor its fruit farms in Espírito Santo, Brazil.
Agrosmart is constantly adding to its technology stack, according to Vasconcelos who says it deploys new features quickly. “From IoT to AI and blockchain, we use state of the art tech to solve our customers’ problems,” says Vasconcelos, acknowledging the ever-changing nature of her customers’ needs, “we continue to invest on growing our tech, so we can develop further algorithms.”
“It was a challenge to grow robust datasets from local soil and microclimate conditions, but generalizing our algorithms to support inputs that comes from different sources, sensors and providers, led us to create high precision algorithms for irrigation, 7-day weather forecast and coffee rust prediction.”
Agrosmart’s vision: to conquer Latin America, and beyond
But what helps the app stand out from the rest in Latin America? Its low barrier to entry. It’s available on Google Play and the Apple Store. It also reaches farmers in rural areas as it uses and transmits data via satellite or lower-broadband 3G networks. It reminds us at AFN of apps like Impact Terra’s Golden Paddy in Myanmar and India’s Gramophone, although there are many more.
A low barrier to entry is also one way to keep a farm app “sticky” Impact Terra’s founder told us a couple of weeks ago.
With a presence in nine countries and counting, Agrosmarts plans to use the Series A capital to expand the product portfolio and catapult the company into the rest of the Americas.
“My vision is for us to become the largest digital agriculture platform in Latin America by integrating the whole food supply chain,” says Vasconcelos, who started her business crunching numbers on her father’s farm back in 2014, in order to help him make better decisions.
The expansion includes launching new features, such as farmer insurance programs in case of crop disease. Vasconcelos plans to make the most of Bradesco’s financial services expertise as Agrosmart ventures into that space.
“They have a massive penetration in both in our country and its agricultural sector,” she adds.
Any operational growth calls for a greater influx of talent, and Vasconcelos plans on doing just that. Agrosmart’s expansion also includes an increase in manpower, including a new head of Digital Sales and a head of Customer Success. (Keep on eye on our jobs board for when the details are out!)
“We are hiring in Brazil, the rest of Latin America and perhaps North America. We are also investing an amount towards capex for the value chains that we need to kick-off by renting equipment. Our current offering will see a major increase in quality, user-friendliness and the quantity of features available.”
Lots of funding, but ‘hard to find’ right fit
There was a lot of funding available, according to 27-year-old Vasconcelos, no doubt aided by her growing list of accolades including a position on Fast Company’s 2019 list of “Most Creative People in Business, graduating from NASA, collecting MIT and Forbes awards. Also, in 2018, the World Economic Forum recognized Agrosmart as one of the world’s most innovative companies.
But it was the process of finding the right investors for Agrosmart that took up the bulk of the 10-month Series A process.
“It’s a long process to find the right partners who share a vision with you and see the future the way we see it,” she shares.
Bearing in mind Agrosmart’s expansion into financial services, Bradesco was a clear match, while Positivo Tecnologia made sense on the technology front; they’re one of the region’s leading tech companies with a lot of hardware and supply chain knowledge, according to Vasconcelos. She wants to tap their expertise as Agrosmart reviews the ‘sensoring’ part of their business to improve efficiencies in production, imports, and exports.
While Vasconcelos has no plans to raise more funding until the end of 2020, like many entrepreneurs, she will continue to eye out “for investment opportunities or growth acceleration on a case-by-case basis.”
We’re watching you, Brasil.
AFN is keeping close tabs on Brazil and last year partnered with the country’s leading agtech VC SP Ventures to release an agtech startup market map detailing some 338 startups in the ecosystem; there’s likely more today and we’re looking forward to an update (hint hint Francisco!)
Brazilian agriculture has seen a meteoric rise in relevance over the past few decades. Exports rose by over 420% to around $80 billion between 2001 and 2018, according to Trade Map data. The South American nation has surpassed Canada, Spain, Belgium, China, Germany, and France in terms of export volumes, all within the span of two decades.
Fitch Solutions remains bullish on Brazil, expecting it to retain its dominant position on the global export market in its report published August 5. This, despite downsides, which include President Jair Bolsonaro’s “political inexperience” and “growing global environmental concerns”.
But just how much untapped agtech startup potential is there in Brazil? The country’s Statistical Office IBGE shows that the country was home to some five million agricultural entrepreneurs in 2018. It’s hard to know what counts as an entrepreneur in this sense — IBGE states that “Agricultural Entrepreneurship can be defined as being primarily related to the marketing and production of various agricultural products. Agricultural Entrepreneurship is also related to agricultural inputs — so it certainly involves farmers but also likely the businesses surrounding them. In any case, that statistic dwarves the 338 recognized startups in the country, so there’s clearly room for more innovation.
The investment team over at AgFunder is bullish about the potential for Brazil as a breeding ground for agtech startups, pointing to the success one of portfolio company Solinftec. Find out more here.
What does Vasconcelos think?
“For Brazil, I want to see us go beyond commodities. I really believe we have an essential role in feeding the world,” she said. “Brazil can not only position itself as a country that’s able to lead in agriculture produce, but also for tech in the sector.”
Snapshot: Brazil’s Agriculture Sector
Source: IBEG, SP Ventures
Know a startup in Brazil that we need to know about? Drop me an email at [email protected].