SP Ventures, a São Paulo-based venture capital firm focused on agriculture and climate technology, reached a $50 million second close for its third agriculture tech fund this week.
The fund will invest in Latin American startups working on solutions that replace chemical farm inputs with biological alternatives, expand financial services for farmers, and digitize agricultural supply chains. Investors included IDB Lab, which allocated $8 million, along with Japan’s development agency JICA and Belgian family office Nest.
The fund also counts AGCO Corp., FMC Corporation, BASF Venture Capital, Minerva Foods, and Morocco-based fertilizer producer Office Chérifien des Phosphates among its backers. The close follows an $8 million investment from the Soros Economic Development Fund last week.
Agriculture employs some 28 million people in Brazil. “You can’t have a sector more vulnerable to climate than that. Rural livelihoods depend on resilience,” SP Venture’s Francisco Jardim told ImpactAlpha. “By backing foundational technologies, we help agriculture preserve productivity and profitability through this transition.”
SP Ventures was founded in 2007 and was incubated through Brazilian development bank BNDES’ inaugural seed capital program, which backed six first-time fund managers as part of an effort to help kickstart the country’s startup ecosystem. It spun out of the development bank in 2014 to raise its first proprietary fund, and raised $58 million for its second fund in 2020.
The firm’s portfolio companies include Genica, a Brazilian company that mass-produces natural biological organisms such as fungi, bacteria, and viruses to replace chemical pesticides on tropical farms, and Bug, which developed biological solutions to combat sugarcane pests and was acquired by Dutch biologics giant Koppert.
With its third fund, SP Ventures aims to support sustainable management practices across 50 million hectares, improve the livelihoods of 500,000 rural workers, and help replace one million tons of chemical fertilizers and pesticides with organic alternatives. The firm is targeting $100 million by final close.
Valley of death
The fund raise comes during an especially tough period for Brazilian venture capital firms. Record interest rates have driven out domestic investors, helping dethrone Brazil as Latin America’s largest VC market.
“We’re having a near extinction event where a lot of the investors that were created over the past decade are not being able to raise a fund,” Jardim said.
SP Ventures says it succeeded because of its track record and support from key investors such as IDB and Meraki
“You really had to demonstrate why, even though you were successful in Fund II, you would be able to continue in a much tougher environment marked by volatility and broad uncertainty,” said Jardim. “Every single investor wanted to sit down and say, it’s a very different macro outlook, and we want to know why we should continue to back this region.”
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