Investor interest grows in technology ventures with an agricultural focus

Investor interest grows in technology ventures with an agricultural focus

The panorama of the agrotechnological sector in the country, the AgTechec ecosystem, is incipient with almost a hundred recent startups / Photo 123RF.

The sector of technology-based companies with a focus on the agricultural sector (known as agtech), although it is incipient and is lagging behind as a recipient of capital, in 2021 it accounted for a good part of the investments destined for startups, even surpassing the FinTech sectors, BioTech, EdTech, Commerce and HealtTech.

According to a study presented by the Argentine Association of Private, Entrepreneurial and Seed Capital (Arcap) and the Microsoft company, in 2021 -after two years of the pandemic- the number of Venture Capital and Seed transactions broke a record compared to previous yearswith 110 investments for a total of US$ 1,337.2 million.

“The investment record in Entrepreneurial Capital that occurred in Argentina in 2021 is part of a growth in the region, where what was invested in 2021 alone exceeds the total amount of the last years added together,” said Lorena Suárez, president of Arcap.

For Suarez, “What is interesting about the phenomenon is that Latin America still has a lot of room to continue growing and very good material in terms of human capital, innovation and business developments”.

“That the volume of investment grows so much is great news because startups are a way of social, economic development and environmental repair; for this reason, Entrepreneurial Capital has an essential role in a country and a region where there are so many challenges to be solved”, complete.

In Argentina, since 2016 there has been a sustained growth trend in the number of Venture Capital transactions (investments of more than US$ 1 million); the trend even continued in 2020, despite the pandemic; and in 2021, 44 transactions were registered; 69.2% increase over the previous year, and the highest annual jump on record.

Investments in Venture Capital

The US$1,312.7 million invested in Venture Capital in 2021 is almost four times higher than the previous year and is 46 times larger than the total amount invested in the first year that Arcap began measuring these indicators.

Investments in this segment were allocated to AgTech (18.8%), FinTech and Enterprise Software (15.6%), BioTech (12.5%), EdTech (9.4%), Commerce and HealtTech (6.3 %); Geographically, 75.9% of the startups that received investments are located in CABA and PBA; 12% in Santa Fe; and 4.8% in Córdoba and Mendoza; and, out of the total number of companies, 72.7% offer B2B products or services; and 27.3%, B2C.

Investments in Seed Capital

In the case of investments in Seed Capital -operations that generally range from US$25,000 to US$1 million-, 66 transactions were registered in 2021, an amount that has remained stable since 2019, but the total amount invested has increased (US$ 25 million, 50% more than in 2020).

In this case, investments were channeled to the BioTech (45.2%), FinTech (26.2%), HealthTech (14.3%) and AgTech (11.9%) sectors.

Announcements from IICA

In the last daysat Digital Agriculture Week, the Inter-American Institute for Cooperation on Agriculture (IICA) announced that it will support the consolidation of the Agtechs network in the Americas to promote digital transformation in agriculture and will promote a virtual round that links these developers of technological solutions for use by the agricultural sector with investment funds or other leverage organizations.

“At IICA we do everything possible to link actors and make transformation a truly substantive issue, we are committed to continuing to strengthen the network because it is a super noble cause, because here what is in the future is a better quality of life for everyone,” said the agency’s director general, Manuel Otero.

Among the Argentine startups that make up the network promoted by IICA are Agroconsultas, Ecodrip, Milar, Origino, Wiagro, Appi.ar by Beemore and Gbot Solutions.

“The digital transformation of agriculture is inevitable, it is going to happen sooner rather than later, and what we want at IICA is to promote and encourage it so that it is dynamic and inclusive,” explained Federico Bert, the organization’s Digital Agriculture specialist.

The AgTech Ecosystem

According to a study carried out by the Austral University with the support of Endeavor, Glocal and The Yield Lab Institute to investigate the panorama of the agrotechnological sector in the country, Argentina’s “AgTech ecosystem” it is incipient, with almost a hundred startups, almost all of them a few years old.

Agtech is an industry that, although it is in the process of development, has grown in recent years, with companies such as Agrofy, Agidea, Maqtec, Bioceres, Caiman, From field to field, Rural Payment, Kilimo, Acronex, Beeflow, Auravant and ZoomAgri, says the work.

According to research from Startup Genome, Agtech grew 14.6% annually in the last decade, above the world average of 4.5%; Meanwhile, according to Deloitte, Agtech as a market exceeds three trillion dollars worldwide and employs one billion people.

It is a sector that “offers opportunities not only because of the constant search for greater productivity of resources, but also because of the search for sustainability and care for the environment,” the report said.

Agtech grew 14.6% annually in the last decade, above the world average of 4.5%.

In a context of environmental degradation and limited natural resources, and faced with a population of 10,000 million inhabitants projected for 2050, it will be essential to “investigate alternatives to be able to satisfy their basic needs,” he stated.

Thus, he considered, “the increase in digitization will help progress and guarantee that the agricultural industry can meet these demands and will contribute to being more competitive globally.”

The study suggests that the opportunities to innovate in the sector are found in all production phases: “Agtech companies provide technological and research solutions to optimize processes and design innovative strategies that are different from traditional agriculture,” it concludes.



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