Microsoft, Monsanto-backed Brazilian Fund Makes First Investment in Tbit

Brazilian automated inspection technology platform with agriculture applications Tbit has raised a BRL $1 million ($320k) in seed funding from the BR Startup Fund, a Brazilian early-stage technology fund backed by Monsanto, Microsoft, and other strategic corporate players.

According to the company, Tbit automates the quality inspection of materials and products using digital image processing and artificial intelligence to replace manual or chemically-based inspection protocols. The company has eight product lines and approximately 50 customers. Roughly 80 percent of Tbit’s customers are in the agriculture industry.

In agriculture, Tbit is working primarily with seed distributors and grain processors to find quality issues. Tbit claims their grain analyzing software product can reduce the amount of time needed to analyze the quality of a batch of seed or grain by 70% without damaging the material.

This deal marks the first direct investment into an individual company by the Brazilian fund, which was first structured in 2014. The fund made a previous investment in accelerator Acelera Partners.

The BR Startup Fund has to date raised BRL $27 million ($8.64 million) and remains open, with a target of BRL $60-80 million ($20-$25 million). BR Startups is a seed capital fund with contributions from Microsoft, Qualcomm, Monsanto, Brazilian bank Banco Votorantim,  Brazilian multi-sector conglomerate Grupo Algar, Brazilian insurance company BB Seguridade, and Rio de Janeiro state development agency Age-Rio.

The fund was established to help develop Brazil’s startup ecosystem and covers sectors outside of agrifood tech including fintech, insurtech, edutech, mobility, IoT, health, and telecom.

This investment comes nearly three years after the fund was established. Richard Zeiger, managing director at MSW Capital, which manages the fund said that BR Startups has to evaluated 74 startups in that time.

“It was a long selection and negotiation process. We learned a lot and we are reviewing it in order to become faster,” said Zeiger.

Venture capital firms in Brazil have little appetite for angel or seed stage investments, preferring to invest in companies that have revenues and are about to become profitable, John Hamer, managing partner at MGV told AgFunderNews last year.

“Typical Brazilian VCs look more like growth equity investors and that’s why Microsoft has developed this strategy of incubation with partners,” he said. “I’ve been impressed with the growth of the Brazilian startup ecosystem over the years and have met some very interesting companies on trips there. It’s also a key market for Monsanto with all the soy and corn grown there, so we’ve been looking for the right way to participate in that market. We drew the conclusion that working with partners like Microsoft and Qualcomm was a better approach than putting a team there.”