In South America, two sectors are promising for fast-growing startups: AgTech and Fintech. Latin America relies deeply on AgTech, due to its important agricultural sector that it’s exporting to Europe and China. Meanwhile, the Fintech startups are helping to incorporate in the financial system to a wide portion of the population. For that reason, it’s not strange that investors gave their confidence (and money) to Essent Agro, a Brazilian fintech focused on agricultural companies.
In Latin America, Agrobusiness has a big potential to grow up in the coming years, receiving a boost in its production through AgTech. However, for achieving that goal, companies, and producers of the agricultural sector need to get capital for adopting the last technology and expanding their business.
Investors rely in Essent Agro
The CEO of startup Essent Agro from Rio Grande do Sul, Giandrei Basso, was surprised last week by raising 100,000 reais (around $20 000) an hour in an investment round, according to Brazilian business journal Exame. Almost 260 investors became partners in the company with shares starting at 800 reais. The capture, made through CapTable, reached the goal of 700,000 reais ($140 000) in 7 hours.
The value represents a record for the startup, which was born in 2018 in Tucunduva, Rio Grande do Sul. The business model promises to help rural producers and accountants with financial management, especially tax. With the complex tax payment system in Brazil, a change in the way a tax is calculated generates savings. The cost of the service is 247 reais ($50) a month.
According to Basso, the company was surprised by this business round,
We didn’t imagine it would be so fast. This proves that our business has everything to grow even more, mainly because the agro sector is at a totally different time from the Brazilian economy”
Giandrei Basso, CEO of Essent Agro
The agribusiness was the one that grew the most in the first quarter of 2021, with an increase of 5.7% compared to the previous three months. The sector was highlighted in the composition of the country’s gross domestic product (GDP), which grew above expectations at the beginning of the year.
And it is precisely on this growing wave that fintech intends to surf. Currently, the startup has more than 400 producers from almost all Brazilian states that have hired its financial services. Sales rose from 16,000 reais in 2019 to 386,000 reais in 2020. In the first quarter, Essent Agro grew 33% and the expectation is that sales will double in 2021.
Read more: Seven Latin American AgTech that revolutionize the countryside