1Mby1M Virtual Accelerator Investor Forum: With Francisco Jardim of SP Ventures (Part 5)

Sramana Mitra: Why did they choose to go in that direction? What was the draw for them?

Francisco Jardim: The same thing that drew us. First of all, it’s purpose-driven. It’s a representative part of our economy. At the same time, it’s a sector that is highly exposed and volatile to all these external issues.

Sramana Mitra: There was nothing like these guys came from farming families. They didn’t have any roots at all in farming. They just chose farming as the domain they want to work on.

Francisco Jardim: Exactly. It’s a Malthusian dilemma. The current agricultural system is broken. It’s unsustainable the way it is. The way it’s done today, it doesn’t work.

To think that we’re going to have to increase it by 60% to 80%, it’s just getting deeper. We were the first investors in the company. We wrote a seed check. The company grew significantly. We did two rounds.

Besides building a great company, what they have done is, there was a big concern or paradox. People would always tell you, “You’re never going to sell technology to the farmers if you don’t go to the farm, get your boots dirty, have coffee with the farmers, and spend hours and hours chatting with them.”

These boys said, “We don’t believe this. Farmers are just regular people.” They are going through information overload. They’re being digitally transformed and impacted. Inside sales and inbound marketing is going to work.

The revolution that happened in other sectors of sales where you produce content and attract users and close the sale is going to work in farming. The boys did this. It has worked. The company is growing 13% a month without having one field sales guy. It’s all inbound.

Sramana Mitra: Excellent. How far along are they?

Francisco Jardim: They’re not disclosing revenues, but I can tell you the hectares they’re doing. They are doing 6,000 farms. That’s over 1,000 paying customers. They’re growing by over 700 new farms per month. They’re already doing over four million hectares.

Let me give you a comparison. There was a company called Granular that did something similar to them in the US. Granular, when they had three million hectares, was acquired by Corteva for $300 million. The boys here are already 30% bigger than Granular was when they were acquired.

What we see that’s very interesting is, once you have farmers with SMS and you’re managing the entire operation and you’re collecting data, you’re in a very competitive position to do much more efficiently to do what the banks try to do, which is provide capital, identify if they’re good farmers or not, and send people on the field.

We are in a very comfortable position to distribute financial instruments. We think that this company can become a digital bank for farmers and a leading provider of credit and insurance for farmers.

Sramana Mitra: Is there any other company that you want to discuss?

Francisco Jardim: Perhaps a company that we co-invested in Argentina. Argentina is making the headlines and getting a pretty bad rap for political turmoil. Coming from Brazil, Argentines have always been fantastic entrepreneurs.

They have a dilemma that is very similar to what we have seen in Israel. They have a very small consumer market, so Argentine entrepreneurs usually start their business looking globally.

We have invested in Rosario in a company called Agrofy which is the eBay or Amazon of agriculture. They’re a little bit over two and a half years. They have become an early winner in Argentina. It has 40% of its revenues in Brazil. It has launched in Bolivia, Paraguay, and Uruguay. It’s a company that is dominating the e-commerce space for agricultural products in Latin America.

Sramana Mitra: Excellent. You gave us a wonderful insight into the AgTech space. It was a fascinating discussion. Thank you. 

This segment is part 5 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Francisco Jardim of SP Ventures
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