BRAZIL – BASF Venture Capital, the investment arm of German agribusiness company BASF, has committed to invest US$4 million in the Brazilian fund AgVentures II, marking BASF Venture Capital’s first investment in Brazil.
Managed by São Paulo-based SP Ventures, the fund focuses on startups from the Latin American agricultural and food (AgFood) sector. It aims to support 20 to 25 new companies founded and headquartered in Latin America.
The funding round also saw the participation multinational companies as strategic investors as well as financial investors, international development finance institutions and local family offices.
Agriculture is one of the pillars of the economy in Brazil, accounting for around half of the South American country’s exports.
As such, the number of companies working on technologies and business models that fit to the Brazil’s unique agronomic conditions has grown considerably in the past two years.
Simultaneously, AgTech has become one of the most important sectors for venture capital firms in Brazil in a race to support innovative and sustainable solutions.
However, the sector still experiences a myriad of challenges due to specific climatic conditions including a greater proliferation of pests and crop diseases as well as different soil conditions.
In tandem with this the AgVentures II fund was launched. It is currently the only fund focusing exclusively on agricultural technology.
The focus areas for the fund include: agricultural production factors, business management, precision farming, software solutions and livestock management.
In addition, AgVentures will also focus on food technologies for innovative food, new ingredients and plant-based proteins, as well as supply chain technologies, for example, food safety and traceability, logistics and processing technologies.
The emergence of a tech-enabled financial services industry focused on the agribusiness segment will also be an important target.
As a partner of AgVentures II, BASF will be providing financial and technical support, and also plans to collaborate and share know-how and market insights with the young businesses in the SP Ventures network.
Francisco Jardim, Managing Director of SP Ventures says, “BASF is a unique anchor investor that will make SP Ventures an even better financial investor.
“As a partner in our network and with its high profile in our region, BASF will convey institutional credibility with the entire agribusiness economy in Brazil.
“By tapping into BASF’s technical expertise and market know-how, we will also be able to make more qualified investment decisions.
“Moreover, BASF’s operating assets are well suited to add value to the fund’s portfolio. The venture-backed AgTech firms in our portfolio and BASF will mutually benefit from information sharing and strategic synergies.”
Markus Solibieda, Managing Director of BASF Venture Capital, added: “We look forward to supporting promising startups and our business colleagues with this investment.
“As a partner of AgVentures II, we are preparing the ground for our own future direct investment activities in Brazil and Latin America.”
In 2016, BASF launched the AgroStart, an acceleration program that has already registered 420 startups in the AgTech sector providing the company with an opportunity to further participate in the sector.
In October, BASF Venture Capital also invested in a London-headquartered advanced crop analytics startup, Hummingbird Technologies.