Brazil has seen a boom of AgTechs — startups dedicated to finding technological solutions to agribusiness — in the past three years. In 2020, the country registered more than one new AgTech per day, according to a survey carried out by Radar AgTech, an initiative from the Brazilian Agricultural Research Corporation (EMBRAPA), in partnership with SP Ventures and Homo Ludens, and with support from the Ministry of Agriculture Livestock and Food Supply (MAPA).
The document mapped a 40% higher number of active startups compared to 2019. Brazil has today at least 1,574 AgTechs, against 1,125 in 2019.
For Matheus Ferreira, the innovation coordinator at the Confederation of Agriculture and Livestock of Brazil (CNA), this growing interest of tech companies in the rural business can be explained by the importance of the agro for the country. “If the sector is significant from an economic point of view; if it generates foreign exchange; and if it has the resources to hire this type of service or product, it ends up attracting the market interest.”
Agribusiness is the basis of the Brazilian economy, being one of the main levers of the country’s development. The sector stands out due to its capacity to expand productivity and production and generate employment opportunities throughout the country.
The sector’s GDP, calculated by the Center for Advanced Studies in Applied Economics (CEPEA) in partnership with CNA, advanced an important 24.3% last year, reaching a considerable share of 26.1% of the Brazilian GDP.
Investments
Seventy-eight institutions are investing in and supporting the entrepreneurship of startups in the agricultural sector in Brazil, enabling access to incubation, acceleration, and investment opportunities.
Cyklo is a Brazilian incubator working exclusively with agro startups. On its second anniversary, this September, Cyklo launched a new investment fund intending to raise R$ 10 million and accelerate 40 agro startups in the next four years (2022-2025). So far, 14 out of the 20 startups that participated in their program have turned out to be successful and lucrative.
The incubator is located in Luis Eduardo Magalhães, considered the capital of “Matopiba” — an acronym formed with the initials of the states of Maranhão, Tocantins, Piauí, and Bahia. The region experienced an impressive agricultural expansion from the second half of the 1980s onwards and is today one of the most productive in the world.
Luis Eduardo Magalhães is not an ordinary city. It gathers research centers, agronomic consultancies, more than 250 large rural producers who are an eager audience for innovation, an active rural union, and universities with courses related to agriculture. In addition, it has a local airport and a strong relationship with MAPA, CNA, and the Parliamentary Front for Agriculture (FPA).
“We came here at the invitation of rural producers from the region,” says Cyklo CEO, Pompeo Scola, who has solid experience in startups. He explains the main challenge for any innovation company is to come up with a good thesis, a good idea that can turn things easier for potential customers.
“Besides that, they need mentorship, advisers with experience in the agro routine and its market to help them develop their thesis. The third challenge is having enough money to support their company at this stage. We offer all of that and more to make sure the startup can grow steadily,” says Scola.
Innovation
Among the successful Brazilian initiatives is the startup Krilltech, which will represent the country at the Global Tech Innovator 2021, promoted by KPMG. The event will take place next month, in Lisbon, Portugal, and will bring together technologies from 15 countries.
Krilltech was created after a partnership between EMBRAPA and the University of Brasília (UnB). They developed a nanotech biofertilizer that improves the growth of various crops.