Brazil remains farm-tech funding trailer–but agfintech is picking up the pace

Data Snapshot is a regular AFN feature in which we analyze agrifoodtech market investment data provided by our parent company, AgFunder. Click here for more research from AgFunder and sign up to our newsletters to receive alerts about new research reports.

In the past fortnight, AFN has reported two large agtech funding deals out of Brazil: TerraMagna‘s $40 million debt-and-equity round, and Agrolend‘s $21 million Series A raise.

That these deals were announced within days of each other stands out because, until now, eight-figure US dollar venture rounds involving agtech companies have been a rarity in Brazil.

Brazil is one of the world’s largest agrifood producers, and is the leading grower of major commodities like soybean, sugarcane, oranges, and coffee. It is second only to the US in terms of beef production, and is among the top five producers of chicken, eggs, milk, maize, and fuel wood as well.

However, it was the 11th biggest market in terms of venture funding into agritech startups in 2020, according to the most recent edition of AgFunder’s Farm Tech Investment Report – falling way behind peers like China and India, as well as significantly smaller agricultural players such as Israel and the Netherlands.

Brazilian startups developing technologies for farms and farmers raised a combined total of $67 million across 18 discrete deals in 2020:

Top 20 countries by farm tech investment, 2020

Nevertheless, there are signs that Brazil’s agtech investment landscape is hotting up. The emergence of a local venture capital ecosystem, in addition to increased interest from North American and European investors, is helping to fuel this trend; while several startups have reached a level of scale and maturity that enables them to secure larger amounts when fundraising.

One area in particular which has seen an explosion of investment activity — including three substantial deals just in the past two months — is ag-focused fintech; specifically, digital-first companies aiming to solve the liquidity problems experienced by many of Brazil’s small- and mid-scale farmers.

The aforementioned Agrolend and TerraMagna both fall into this bracket, securing a mix of equity and debt financing to fund both their own expansion plans as well as their growing credit portfolios.

Another category which has clearly caught investor eyes is farm management software and devices. This includes Brazil’s single largest agtech round to date: Solinftec‘s $60 million Series B raise back in February 2020 [disclosure: AgFunder is an investor in Solinftec.]

The table below lists the top 10 Brazilian agtech funding rounds to date (note that it does not include pure debt financings or private equity deals):