TLDR:
- Agtech funding in South America is facing challenges due to decreasing venture capital investment and market uncertainty.
- Despite the downturn, panelists at a summit in Sao Paulo see opportunities for investors in agtech in the region.
At the World Agri-Tech South America Summit, investors discussed the challenges and opportunities in agtech funding in South America. The panel highlighted the declining venture capital funding in the agtech sector, with a 50% drop in investments in the past few years. A report by McKinsey estimated that significant losses had been incurred by agtech start-ups in 2023 due to fundraising struggles.
Panelists at the summit, however, saw a silver lining in the current market slowdown. Flavio Zaclis from Barn Investments noted that a slowing market presents opportunities for investors, as competition decreases and prices become more favorable. Francisco Jardim from SP Ventures also expressed optimism, citing significant growth in venture capital interest in agtech in Latin America in recent years.
While acknowledging the challenges faced by start-ups, the panelists emphasized the need for long-term support for these ventures. Natalie Vergara Giron from Mercy Corps Ventures highlighted the importance of resilience and innovation in the face of limited resources and support structures in regions like Latin America.
Despite the current funding challenges, panelists believe that South America offers significant opportunities for agtech investors. Flavio Zaclis stressed the importance of investment discipline to attract more capital and transform the industry. Francisco Jardim pointed to a maturing investment environment in the region, where investors are becoming more selective and offering better support to founders.
Overall, while South American agtech may be facing a “funding winter,” there are signs of opportunity and growth on the horizon for investors willing to weather the storm.
