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Contxto – The venture capital arm of BASF, a German chemical producer, recently added US$4 million into its Brazil AgVentures II fund following its first round of closing. Managed by SP Ventures from São Paulo, the investment fund aims to support nutrition and agrotech business solutions in a region of major interest.
“Latin America is a strategic region for venture capital and for the chemical company, said Markus Solibieda. He works as the managing director of BASF Venture Capital.
As a chemical producer, this just so happens to be BASF’s first involvement with Brazil and its agricultural food market. Most likely, though, it won’t be the last. At the same time, it intends to link businesses with disruptive startups developing new products and services.
“Cooperation between our businesses and startups has become an important driver of innovation for our customers and growth for BASF in South America,” said Manfredo Rubens, president of BASF South America.
Moving forward, the agrotech fund will support between 20 and 25 emergent Latin American startups.
Agriculture in Brazil
As one of the world’s most biodiverse countries, Brazilian agriculture represents nearly 50 percent of all its exports. Some years even have three harvests due to the terrain’s fecundity. Nonetheless, the nation isn’t immune to crop diseases, pests or harmful soil conditions.
With that said, the fact that so many startups are trying to protect this industry from environmental degradation is what makes investors so bullish.
“The Latin American agrotech scene is one of the most exciting places to be,” said Francisco Jardim, SP Ventures co-founder. “The region has a large addressable market; Brazil alone is the second-largest food producer on the planet and represents one of the most promising growth opportunities.”
As hazardous agricultural practices, not to mention the ongoing arson of the Amazon rainforest, create risks for the Brazilian countryside, this fund hopes to fund native strategies to curb these harmful trends.
Some of these include food technology, plant-based proteins, food safety and traceability, logistics and processing technology, plus improved livestock management.