PwC, the global management consultancy, accounting and professional services business, acquired AgTech Garage, an open innovation hub for agtech in Brazil last month.
According to a press release announcing the deal, “the acquisition reinforces the importance of Brazilian agribusiness in the global scenario and reaffirms PwC’s focus on the sector.”
To find out more about how the deal came about and what it means for Brazil’s agtech sector, we caught up with AgTech Garage CEO José Tomé (JT).
AFN: Why did PwC buy AgTech Garage? Does it add totally new capabilities to the firm, or will it be an extension of work already being done at the firm?
JT: The AgTech Garage has created an open innovation community management model that is new and unique. We created a strong brand, well positioned and protagonist in the ecosystem with high potential of scale. Agribusiness is strategic for PwC, and Brazil is where the Global Center of Excellence in this industry is located.
PwC and AgTech Garage add new capabilities. Together, we will offer complete solutions to players in this sector, with unprecedented support from strategy to execution, with a lot of innovation and technology.
AFN: How will the work of AgTech Garage change? Will you still interact with startups in the same way?
JT: The way AgTech Garage interacts with startups does not change with the arrival of PwC. We will, in fact, generate even more value and provide new services for the community of entrepreneurs. As startups scale up, we can also support them on several fronts, such as strategy, financing, mergers and acquisitions, processes, access to capital markets, technology, taxes, ESG, among others. Nothing changes in our relationship with startups, corporates, or any other agent in the ecosystem. We will be more comprehensive and more solid, providing confidence to our partners and a new look at innovation.
AFN: Please describe how AgTech Garage was created and why? What was the journey like from then to now?
JT: AgTech Garage was founded in 2017 by three entrepreneurs in Piracicaba (SP), a region that is an innovation area for agribusiness in Brazil. Our intention has always been to encourage open innovation in the country and, through it, increase the competitiveness of entrepreneurs and large companies. Especially in the last two years, we have had very fast growth, becoming one of the main innovation hubs worldwide.
Nowadays, AgTech Garage has a network of more than 80 large partner companies, more than 1,000 connected startups (including almost 15% from outside Brazil), and a team of more than 50 people. Even though we are an Agribusiness hub, our network comprises companies from more than nine sectors of the economy that interact in some way with Agribusiness. Given all this, we began to analyze how to accelerate our growth, and the acquisition by PwC was natural. PwC has been part of our community for over 2 years and the conversations that resulted in this movement, to unite skills and capabilities, were an evolution of this relationship.
AFN: What is next for Brazil’s agtech ecosystem in 2023 and beyond?
JT: The ecosystem, of which we are a part, is not only of agtechs. It is an agribusiness ecosystem that attracts traditional agtechs and agfintechs and food techs. In addition, it attracts edtechs, because we have to transform education in agribusiness. So it is a more complex ecosystem, where different sectors and technologies converge to transform agribusiness. I believe all the techs will be in agribusiness, and we will work hard on this in 2023. And our community is not only after agtechs. It demands the solutions of fintechs, edtechs, logitechs, climate techs… all of this is agribusiness.
On the investment side, we are already noticing the diversification of the venture capital industry. We follow the structuring of many corporate venture capitals (CVCs), for example, which come with a much more strategic look than a financial one. Many other investor profiles are also consolidating, such as large producer groups that invest directly in startups, groups of specialized executive angels and there is also crowdfunding. The moment is for diversification.
Regarding VC exits, some may happen in 2023, very much along the lines of the early exits. I think we will also see corporations making more acquisitions and generating early exits. We are heading toward a very dynamic scenario.