Basf invests US$4 million in the AgVentures II fund managed by SP Ventures

Basf Venture Capital is one of the largest investors in the first round of fundraising for the Brazilian fund AgVentures II, allocating US$4 million. The fund is managed by SP Ventures, based in São Paulo (SP), and targets Latin American technology startups in the agricultural and food sector, called AgFood. The fund intends to support 20 to 25 startups operating in Latin America. In addition to Basf, there are other strategic investors, international development agencies and banks and family offices. For Basf Venture Capital, this represents the first investment in Brazil.

Agriculture is one of the main pillars of the Brazilian economy, a sector responsible for around half of the country's exports, which is a global leader in the commercialization of crops such as cereals and corn. Still, local agricultural producers face peculiar challenges, due to specific climatic conditions, during the two to three harvests per year that are possible in Brazil. Among these challenges are the greater proliferation of pests and diseases, in addition to different soil conditions.

The number of companies working with technologies or business models suited to the specific agronomic conditions of the region has increased considerably in the last two years. At the same time, the AgTech sector has become one of the most important for investment funds in startups in Brazil. Currently, the AgVentures II fund is the only one that focuses exclusively on technologies for agriculture and food.

The challenges facing agriculture in the region and, therefore, the focus of this fund include: agricultural production factors, business management, precision agriculture, software and livestock management; technologies for the food industry such as new plant-based ingredients and proteins; and solutions for the supply chain, considering food safety and traceability, logistics and processing. The emerging technology-based, agribusiness-focused financial services sector will also be an important target.

“Cooperation between our businesses and startups has become an important driver of innovation for customers, as well as growth for Basf in South America. We took an important step with the launch of AgroStart, an acceleration program that has already registered 420 startups in the AgTech sector since 2016. Basf Venture Capital's investment in the AgVentures II fund will give us the opportunity to increase our participation in this dynamic, innovative and collaborative environment, which can generate valuable solutions for the sector", says the President of Basf South America, Manfredo Rübens.

With the investment in the AgVentures II Fund, Basf Venture Capital takes a step towards supporting the activities of Basf's Agricultural Solutions segment. “Based on this investment, we seek to support promising startups and Basf’s business areas. As investors in AgVentures II, we are laying the foundations for our own future direct investment activities in Brazil and Latin America”, says the General Director of Basf Venture Capital, Markus Solibieda.

In addition to providing financial and technical support, Basf also plans to collaborate and share knowledge and market insights with the disruptive businesses in the SP Ventures network. “Basf is a unique anchor investor that will make SP Ventures an even better financial investor,” said SP Ventures General Director, Francisco Jardim.

“As a partner in our network and with its prominent position in the region, Basf will provide institutional credibility to the entire agribusiness economy in Brazil. By having access to technical expertise and market knowledge, we will also be able to make more qualified investment decisions. Furthermore, the company's operating assets are appropriate to add value to the fund's portfolio. Just like Basf, AgTechs – which also have startup investors and are part of our portfolio – will mutually benefit from information sharing and strategic synergies”, adds Solibieda.