1Mby1M Virtual Accelerator Investor Forum: With Francisco Jardim of SP Ventures (Part 4)

Sramana Mitra: What is the limited partner scenario for AgTech? This $75 million and the rounds before, is there a set of limited partners that are particularly interested in AgTech?

Francisco Jardim: We have two anchors that are very large agriculture multinationals who have been active in the corporate venture sectors. These two guys are our LPs.

We have a large Development Finance Institution (DFI). We have funds who have been deploying capital and diversifying their LP base across several different venture ecosystems. Our new fund is ESG-compliant.

Whenever you invest in AgTech, what we noticed is that there’s something that you’re doing no matter what. You’re increasing global food security while optimizing the way you produce it. When you produce more from less land, you put less pressure on deforestation.

AgTech tends to be an environment-friendly investing space. We have a lot of impact investors such as LPs that are concerned with the rate of CO2 emissions.

70% of global freshwater application is agriculture. It’s difficult to have a sustainable policy involving freshwater if you don’t tackle agriculture. They see agriculture as not only a transformational sector from a technology perspective but also a defensive sector.

Sramana Mitra: Let’s talk about a few of your companies. You can pick whichever case study you want to discuss in a bit more depth. Take maybe one to three companies that you’ve invested in that are moving well.

Talk about what kind of problems they are solving. What stage did they come to you? How did you find them? What is it about them that caught your attention to want to invest in them?

Francisco Jardim: Let me start with Aegro. It’s the leading SMS farm management system. It sells enterprise software for small and medium farmers. We got this company at a very early stage. It was founded by four brilliant computer scientists from a university in Brazil.

We saw the SMS-based platform as one of the spearheads of the digital transformation of farmers. Farmers still manage their farms either with a notebook or with an Excel spreadsheet. It’s a very complex operation. We’re using seed and chemicals. You’re exposed to climatic adversities. These guys are managing it in a very simple fashion.

I’ve heard that this is the same if you’re talking about Illinois or Ohio. You have farmers that have high productivity in producing 80 bags of soybeans per hectare. The neighbor is doing 20 bags of soybeans. That’s the difference between a guy who’s making money and a guy who’s going out of business.

What’s the major difference? It’s management. The best way for you to spearhead management is through information technology. These guys were very focused on building a fantastic product. We decided to choose these guys as our bet to be able to lead a very important part of the digital transformation.

Sramana Mitra: You said these are three brilliant computer scientists. Where did the domain knowledge about farms come from?

Francisco Jardim: They attracted a senior agronomist who was a consultant to the rice industry in the south of Brazil. He became their mentor. He had gotten a little bit of equity in the company. He was helping the boys to make the leap from computer science to understanding the pain points of the farmer.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Francisco Jardim of SP Ventures
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