Just as agriculture is moving closer to the center of Brazilian industry, agtech startups are inching toward the center of venture capital investment and Syngenta has indicated that it wants to play a major part in that growth.
Syngenta announced plans to acquire Brazilian farm management software platform Strider for an undisclosed sum, pending regulatory review by Brazilian authorities in March.
Though not in Brazil, the chemical giant also participated in an oversubscribed $6 million Series A round for Argentinian agribusiness marketplace Agrofy — making clear a commitment to Latin American agtech.
As digital agriculture lead for Latin America (LATAM) at Syngenta, part of Ariadne Caballero’s job is to track all of the innovation coming out of and targeting the region and keeping up is half the battle, she says.
We caught up with Caballero at the Thought For Food Academy and Summit In Rio de Janeiro, Brazil to discuss how she evaluates digital ag startups and what her country’s farmers really need from technology.
AgFunder Co-Investment Fund III is now open for investment. Closing June 15, Spots are limited.
How do you interact with Syngenta Ventures in your current role?
We identify companies and make evaluations together regarding capabilities and what is interesting to the market. Since I am involved with the ecosystem and startup companies, we always offer feedback.
What are the problems that you’re looking to solve for farmers in LATAM with digital ag?
In Latin America, we have so many different segments of growers. It is very difficult to point out a specific problem. One that is definitely across all the segments is management. We need to start with good management tools and some farms have them and some don’t.
At the top, you have huge agribusinesses that are using ERPs and everything runs through software, but once you come down from that you have some that are using pen and paper and some that are just keeping it all in their head. So we’re trying to serve all of those different segments depending on the type of decisions that they have to make.
What technology is top of mind right now on your shopping list for investment and acquisition?
We focus on three pillars. At the heart is farm management systems because this is where we create the most value to the client at the level of understanding their numbers. From that we have digital agronomy tools that are the core of Syngenta because we are an R&D company. We are already using certain algorithms to predict pests and disease. We partner with companies that make predictions using 60 different variables, from weather to historical data, and they really add value because they bring efficiency and make growers more accurate with their spraying. the final piece is risk management tools – how do you use data to reduce risk for growers?
When do you bring tool from the US to Latin American and when do you build or buy it here?
Our latest buy was Strider, a Brazilian company with great capabilities and a great team. Strider is becoming our digital hub in Latin America. We have Ag Connections, which is our digital hub in the US and there is space for the companies to merge and to encourage synergies. Our strategy is to continue acquisitions, investments, and internal development, but also partnerships because partnerships for us are as important as investment and acquisitions.
When you’re evaluating LATAM agtech companies in, do you feel the competition from the other big ag players?
You would be surprised by how many companies there are. Recently AgFunderNews had an article by Francisco Jardim that found around 350 companies that are coming up. Once the companies are really solving a specific problem for growers, there is space for everyone. At this moment the difficulty is to connect with all of them and to really understand where to find this value.
We have noticed that farmer adoption of LATAM-based software like Strider, or Solinftec is remarkable in terms of adoption rates and use numbers for their age? Why is that?
It has something to do with the profile of the grower. We have huge companies and huge growers here in Brazil and they are avid that they need technology to be more efficient.
The challenges for Latin America are bigger sometimes and there is a pressure to keep ourselves relevant to the market and there is no safety net. It’s a risky business. They are looking for the best way to reduce risk and to increase their profitability. This is the mindset of the grower.
What do you think is the future of digital retail in ag in Latin America?
Specifically ag retail is going to jump into a different phase soon. We understand that retail is going to be part of the digital ag movement. Retailers want to modernize the way they approach the market. You see this movement of cooperative and retailers already understanding that this is the way to go.
What is the one thing that you want all agtech startups to know?
Go into the field. Identify the real needs of the growers. Make it simple and really try to tackle a key issues for the grower. If you’re not very clear what your proposition is to the grower, its going to be difficult. Start with the problem first and you will find the funding.