Editor’s Note: Ricardo Jaramillo is the co-founder of Expo AgroFuturo, one of the largest agricultural events in the world, which takes place in Colombia every year. Jaramillo and his partners established the Grupo NovoAgro in 2007 to help transfer knowledge and technology in Colombia’s agriculture industry and launched Expo AgroFuturo 12 years ago as a means to encourage investment in the agriculture sector. Grupo NovoAgro has founded four agricultural companies – Croper.com, Agricapital, Agrow, and AgriLink. Ahead of AgroFuturo 2018, which takes place between August 22 and 24 in Bogota, Jaramillo speaks to AgFunderNews about agtech in Colombia and the Latin American region.
Where is the most opportunity for entrepreneurs in agtech in Colombia today?
In Colombia, and most of the tropical countries, there is an interesting context. There are many long-term crops such as coffee, rubber, cocoa, palm oil, among others. In addition, there is a wide variety of fruits, which presents business opportunities for countries that are in the meridians.
In Colombia particularly, we need to develop algorithms that can identify the images of the crops of the tropics. This would help us be more efficient in terms of employment; many of the crops cannot be mechanized and crops must be farmed manually. The robotics, analysis and traceability of harvesting processes are fundamental.
Another important goal is to bring producers and buyers closer through e-commerce or the development of platforms. Then we can empower them to market their products directly and with better values, as well as provide traceability; it is very difficult to certify the standards of products under international standards in terms of the inputs or agrochemicals they use.
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In genomics, there are also many processes to develop. We must use technologies that already exist worldwide to read plant DNA in a much faster way and be able to cross them. By doing this, we may achieve the necessary hybridizations to resist more heat, cold, humidity or plague. These practices, among others, are fundamental agtech applications for Colombia that we are promoting from Expo Agrofuturo.
How would you characterize Colombia’s startup scene compared to other Latin American countries and globally?
We have a lot of talent in Latin America. We need to take advantage of the solutions that are being generated, because in many cases they are different from those that already exist in the world. It is evident that the progress of Latin America is slower in relation to countries such as Israel, USA or Holland. In terms of agrotechnological developments, the technology in these developed countries is not always relevant in Latin America because it often can’t be used in the tropics because of the different conditions we have here. But technologies developed in the tropics can often be expanded to other countries. If we work together, we will generate a solution for a large part of the world. Not only Latin America but Africa, Asia and all the meridians that are in tropical zones.
In Latin America, the most developed countries in terms of agtech solutions are Argentina and Brazil. I believe Colombia follows since there are more and more developed ecosystems that promote innovation in the agricultural sector, and agtech specifically. We definitely need investors to place more trust in entrepreneurs in Latin America so that development can be accelerated.
Is there a good local VC community to support their development? Or do you rely on foreign funding too?
Yes there is. Even we at Grupo NovoAgro have received investment and we have created an entrepreneurship contest in Expo Agrofuturo where we managed to connect national investors to companies that are developing solutions in the field. But evidently, to arrive at a model where we can scale at a global level, international investors are required that have not only the capital, but the connections that allow these entrepreneurs to be much more agile in their scalability.
What is your experience investing in agtech?
Today, Grupo NovoAgro is leading two very important projects. One is croper.com, where we are making the supply chain more efficient through a partnership with producers to make some purchases of specialized volume inputs, and thus being able to track the traceability of these purchases and connect directly with buyers certifying the inputs used. Croper is growing significantly, and has more than 150 clients. We expect to reach 1,500 clients by 2019.
We also have AgriCapital, a microfinance company where we develop technologies to generate better credit scoring of producers, who normally have not had access to agricultural loans. We can also support them in the management of their operations, so that it is not simply to give them capital, but also knowledge and guidance in the whole process. Today, the group is betting on agtech and supporting all the companies that present themselves through the entrepreneurship area and the entrepreneurship contest.
What excites you about the agriculture industry for venture capital?
The agriculture industry is the pillar of all countries; especially in Latin America. The new information trends and the global demand for food require new solutions that have to go beyond mechanization and traditional methods. For this, we will have many opportunities with companies – even in other sectors – which can present their solutions to agtech and the agriculture sector to make it much more efficient.
What are some of the worst pitfalls of startups you’ve come across as a VC?
The agricultural field tends to adapt more slowly to economic changes and the development of companies. It is often difficult to break into the market, but when people gain confidence and realize that the product or solution is beneficial, the company gets noticed quickly. In this sense, I think that the first phase is very slow and difficult, because it has a high component of disbelief on the part of many users. You have to choose wisely who you start with, and in which sector you focus. That is the main problem. I
There is already a presence of national investors and more and more internationals are arriving. Agtech worldwide is growing steadily as there is a necessity for food. It is essential to be able to develop the Latin American ecosystem to unite and show the investors of the world the good things that are happening here and the important solutions that are being developed. Expo Agrofuturo, which will take place from August 22 to 24 in Bogota, will be an opportunity for investors to learn more about Latin America, to see all these companies that are providing solutions, which are globally scalable and for which there is much more confidence in the ecosystem. We can count on many more companies launching in the region in the future.