BASF Venture Capital, an investment arm of German chemicals company BASF Group, is among the primary investors in the first closing of the AgVentures II having committed US$4 million to the Brazillian fund. Managed by São Paulo-based SP Ventures, the fund focuses on start-ups from the Latin American agri-food sector and aims to support 20 to 25 new companies founded and headquartered in the region. For BASF Venture Capital, this represents the first investment in Brazil.
“Cooperation between our businesses and start-ups has become an important driver of innovation for our customers and growth for BASF in South America. BASF, for example, took an important step by launching AgroStart, an acceleration program that has already registered 420 start-ups in the agri-tech sector since 2016. BASF Venture Capital’s investment in the AgVentures II Fund will provide us with the opportunity to further participate in this dynamic, innovative and co-creative environment that can bring valuable solutions to the industry,” says Manfredo Rübens, President, BASF South America.
Agriculture is one of the pillars of the economy in Brazil, underscores BASF. The country is a global exporter of crops such as cereals and maize, with agricultural products accounting for around half of the country’s exports. However, local agricultural growers face particular hurdles, such as dealing with the region’s climatic conditions. Other challenges include a greater proliferation of pests and crop diseases as well as different soil conditions. Nevertheless, BASF highlights that two to three harvests a year are possible in Brazil.
The number of companies working on technologies and business models that fit to the area’s unique agronomic conditions has grown considerably in the past two years, highlights the company. Simultaneously, agri-tech has become one of the most important sectors for venture capital firms in Brazil. The AgVentures II fund is currently the only fund focusing exclusively on agricultural technology.
The challenges in Brazilian agriculture, and thus the focus areas for the fund, include: agricultural production factors, business management, precision farming, software solutions and livestock management. The fund is also centered on food technologies for innovative food, new ingredients and plant-based proteins, in addition to supply chain technologies such as 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.
“We look forward to supporting promising start-ups 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,” says Markus Solibieda, Managing Director of BASF Venture Capital, highlighting the significance of the investment in supporting the activities of BASF’s Agricultural Solutions segment.
In addition to providing financial and technical support, BASF also plans to collaborate and share know-how and market insights with the young businesses in the SP Ventures network.
“BASF is a unique anchor investor that will make SP Ventures an even better financial investor,” says Francisco Jardim, Managing Director of SP Ventures. “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,” he concludes.
Last October, BASF Venture Capital was among the lead investors in a Series B investment round for UK start-up Hummingbird Technologies, an advanced crop analytics firm. The investment will fund advancements in remote sensing, artificial intelligence (AI), machine learning and data analytics for in-field precision farming.
