Startups: Argentina’s Agtech sector as cutting edge for the region
Latin America is the world’s most rapidly growing region when it comes to the funding of startup companies. According to Crunchbase, a leading business information company, venture capital investors poured a record $19.5 billion into startups based in Latin America last year. That was more than triple the amount invested in the region’s startups in 2020, turning Latin America into “the fastest growing region in the world for venture funding in 2021
As for this year, Crunchbase added that, in just the first two weeks of 2022, Latin American startups pulled in more than $450 million, and that investors “are optimistic that tallies will keep rising.” This figure represents more venture capital going into technology investments in the region than over the past 10 years together.
The bad news, however, is that Latin America’s rapidly growing startups are almost always individual success stories. The amount of money the region is investing in innovation is pitiful. While Israel invests 4.9% of its annual gross domestic product in research and development of new products, South Korea invest 4.5% and the United States puts in 2.8%, Latin American countries’ average investment in research and development is only 0.6%, according to the World Bank.
Latin American startups are growing faster than anywhere else in the world, but they only receive a small fraction of the world’s investments in new companies. If countries in the region took advantage of their talent and put innovation at the center of their political agendas — investing funds and providing global contacts to young entrepreneurs — the region could dramatically increase its economic growth.
Argentina is no exception. Since agriculture is one of the main engines of its economy, cutting-edge and very resilient, it is not surprising that AgTech developments have a higher percentage in investments and startups.
ARGENTINA’s Agtech sector
Integration of various companies dedicated to technology for agriculture is the way forward, providing solutions that enhance the sector.
With the arrival of cryptocurrency to the agri-sector -even with tokens based on the price of grains-, the sector seems to have completed the cycle of technology: innovation is already present in each of the production or business stages.
Examples are ample. Satellite images to establish drought or flood rates, tractors and harvesters with autonomous commands, fin techs that intervene in the buying and selling process, and apps to facilitate logistics are some of the latest applications in the production chain. New alternatives to boost a sector that, against prejudice, has always looked into technology to boost the production of a total of 30 million hectares (the territory of Italy).
Argentina’s agtech sector grew by 14.6% annually in the last decade, when the world average was 4.5 percent, according to a study by the Universidad Austral and Endeavor.
The cutting edge for the field comes with the implementation of technology and innovation. Proposals will continue to appear: today agtechs represent 15.4% of total seed capital investments, according to a survey conducted by Microsoft and Arcap that ranked the sector only behind biotech and fintech. For Argentina, AgTech participation increases this percentage.
The arrival of cryptocurrencies in the sector is the last step in how the agri-sector joined the fin tech revolution that has taken place in Argentina in recent years, especially since the pandemic. The interesting thing about the current solutions that are spreading is that these cryptocurrencies work as stablecoins, which means they are backed by a valuable asset, in this case grain.
The proposal, of course, goes far beyond one or another solution. Today there are more than 140 companies on the Agtech list of the National Ministry of Agriculture, Livestock and Fisheries, in a registry that surely does not include many others. Integrating and cooperating with each other is obviously the next step.
Argentina has a thriving start up community in all sectors but specifically in Agriculture/ tech. This community is, however, not very much connected yet with Europe, and even less to The Netherlands. At the same time, the two communities could benefit from each other: Argentina has the challenges, The Netherlands has the ecosystem to come up with solutions for these challenges.
The LAN team “Cono Sur” sees opportunities for Dutch companies that are active in:
- Improving yields: p.ex. precision agriculture, integrated equipment, data collection and data quality, image management, access to seasonal trends and facts.
- Improving sustainability: p.ex. land use mapping, managing water, energy management, waste tracking, input traceability, farm/field performance reporting, harvest tractability.
- Water & Agriculture, water quality: p.ex. digitalization, sensoring & monitoring, irrigation, decontamination solid and liquid waste in productive establishments & waterways, desalination, water technology.
- Improving assets productivity: p.ex. enterprise agriculture (ERP) for the farm, telematics, automatous equipment, drones, sensory networks, services enablement, predictive analytics.
Do you want to know about this topic? Please contact LAN Team Cono Sur via BUE-LNV@minbuza.nl