The Yield Lab Latam (YLL) was formed in 2017 to address a lack of capital and support for early stage agtech companies in Latin America. AgFunderNews’ managing editor Louisa Burwood-Taylor caught up with managing director Roberto Vitón in São Paulo, Brazil, to discuss:
- How investors are looking at food and agriculture as an asset class. (Vitón is also managing director of Valoral Advisors, a consultancy that’s spent over a decade tracking investment across a variety of food and agriculture funds- not just venture capital.)
- The second close of YLL’s third fund, with $20 million+ to invest in early-stage agrifoodtech startups in the region.
- Agrifoodtech exits over the past few years.
- Areas ripe for investment.
According to Vitón: “We have mapped around 80 exits [in agrifoodtech in Latin America] over the last 12 years or so. But out of those 80, probably there are 10 which were successful in a way, and some which were, I would say, neutral exits or situations where companies were in some kind of distress and were absorbed or merged into other companies.”
He added: “I believe successful exits are coming, but it takes time, and today it’s becoming clear that corporates will be leading those exits, most likely. We also see some consolidation among startups here in the region.”
The Yield Lab Latam: Areas of opportunity
Novel production systems: “We continue to see a very broad set of opportunities in novel production systems including indoor farming and aquaculture, as the region is actually not developed at all there. I think we can learn from some of the successes but also some of the challenges that we have seen elsewhere and see what can be more relevant and better adapted to the region.”
Mechanization: “I also think about mechanization and automation. Nobody can say that we are going to be the [top] developers of robotics in Latin America, especially compared to the US, Israel or Europe, but basic mechanization can help in different crops in different kinds of production systems.”
Biologicals: “We see biologicals as a major area of investment today in Europe in North America. As we know, biologicals have to be very well adapted to the reality of specific crops, specific soil conditions and climate conditions, so that’s definitely one exciting area for us.”
Big data: “All the big areas of precision ag, digital, big data, even farm management systems… there’s so much to be done because you could argue that the digitization level today is really, really low.”
Fintech: “Mexico, Brazil, Colombia, are some of the places where digital solutions can help disintermediate the financial sector, make it more more efficient, more accessible.”
Carbon markets: “There’s a lot of buzz around climate tech, carbon markets, and regenerative agriculture, but I believe that there are still a lot of question marks on the regulatory side about how that is going to play.”