By Lynda Kiernan, Global AgInvesting Media
Brazil’s SP Ventures has raised $17.2 million, announcing a first close for its $50 million Latin America-focused ag and food tech fund.
With high-profile backers Syngenta Ventures and BASF, along with high-net-worth investors and an unnamed Seattle-based fund of funds, the fund plans to make early stage Seed and Series A investments between $100,000 and $6 million.
Every segment of the food and agtech value chain will be considered, with a decided lean into ESG and impact investments. The firm’s website outlines that areas of opportunity could include food production and deforestation mitigation, water use management, health and welfare, energy use management, land use management, input use management, greenhouse gas and emissions reductions, and chemical use and pollutant emission mitigation, among others.
“We envision a new economy, one that creates wealth and is also socially inclusive and environmentally sustainable,” the company states on its website. “We believe that great investments deliver sustainable value by making a positive impact in our world.”
SP Ventures has made 23 investments, however, it made news at the beginning of 2020 when it led the largest funding round for a Latin American agtech startup to-date. In January GAI News shared that SP Ventures returned to lead a $23 million Series B for Agrofy, an Argentinian ag marketplace platform. Other investors that participated in the round included Fall Line Capital and Acre Capital.
In March 2018, SP Ventures led a $6 million Series A for Agrofy that included Bunge, Syngenta, leading pan-Latin American technology accelerator Endeavor Catalyst, high net-worth South American agribusiness investors, and funds provided by existing investors including Cresud, the largest farming company in Latin America.
SP Ventures is the most active agtech venture capital investor in Brazil. And while it’s true that there are not many such investors in the region, Latin America is well positioned to be a market of rapid growth for agtech and investment in the space.
The UN FAO states that the Latin America and Caribbean (LAC) region encompasses 34 countries with 2 billion hectares of land. Of this landmass, 38 percent is used for agricultural production, and 46 percent is covered in forests.
The region represents 15 percent of the world’s land, receives 30 percent of the world’s precipitation, and generates 33 percent of the world’s water, making it a great global resource of arable land and forests, according to the organization.
However, despite having 24 percent of the world’s arable land, production growth is stagnant, Marnix Doorn, business development manager at the Institute Fraunhofer Chile Research told Food Navigator-Latam.
Doorn goes on to note that an equilibrium needs to be achieved between crops and their environment with biological and informational science coming together to create a resilient food production system.
What has the power to foster this convergence is agtech.
The huge potential for agtech growth in the region was reflected in the fact that the aforementioned record-breaking investment round for Agrofy didn’t stand for very long. One month later Brazilian agricultural SaaS leader Solinftec announced it had closed on a $40 million Series B led by Unbox Capital, the $100 million investment arm of the media mogul Trajano family.
As agricultural production in the LAC region matures and defragments in order to meet global food demand, there will still be challenges on multiple fronts, from climate change to socio-political tensions, and beyond. However, it will be agtech and investors such as SP Ventures that will disrupt the status quo and usher in new sustainable food production systems.
– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com