InstaAgro completes $600k funding round and prepares for growth phase

InstaAgro, the first online direct sales platform of for agricultural inputs, machinery and parts in Brazil, has completed its first year entering the phase of “Investment for Growth”. Led by the family office Rolesis Holdings, the company received a first tranche of $300k in 2019, and followed by the second piece at the beginning of 2020.

InstaAgro was originally founded by partners Avram Slovic, an American scientist turned Agtech executive currently working in a new Flagship Pioneering venture in Brazil, along with Rodrigo Santini who comes from an extensive background in management consulting, with the goal of creating an additional sales channel for the agricultural inputs industry and supply the giant Brazilian market, with a strong focus on the small producer. Today, in Brazil, there are over 4.5 million rural producers, purchasing upwards of $20B in crop inputs (including chemicals, fertilizers, seeds and irrigation), according to official Brazilian estimates.

Inputs are sold through a network of over 5,000 resellers throughout the country, or farm stores, which focus on large producers which typically purchase on credit. Despite the reseller stores being multi-brand, the stores are dominated by one or two main brands such as Syngenta, Bayer, or Corteva, with complementary products from generic chemical manufacturers filling the portfolio gaps. Reseller’s portfolios are geared towards large producers, who’s purchases offset the logistics costs needed to deliver the merchandise.

The “cost of sale” to small producers however, with less than 100 Ha planted, and largely focused on fruits, vegetables and coffee is high, leaving these growers out of the loop, and forcing them to incur high costs to seek out affordable products. InstaAgro fills this gap, offer a wide and diversified portfolio with optimized logistics for geographically dispersed small plot growers.

According to Daniel Bachner, an investor and former long-time Syngenta executive, the InstaAgro operational model is already validated and is now expanding its customer portfolio. “The first customers of our platform have entered in the ‘recurrence stage’, which shows a true change regarding the purchasing habits. For us, this is very rewarding, indicating that the purchase experience was very good and easy, including easy logistics in a country where this is not always the case. We delivered products in up to five working days, door to door, which is a huge step change from what these producers typically deal with.”

Daniel also recounts that the platform’s product portfolio is rapidly broadening its offer, including a wide range of biological inputs, seeds, liquid and granular fertilizers, among others. He highlights recent additions to the site such as big players in the industry such as Enza Zaden (Seeds), TopSeed (Seeds), Haifa (Fertilizers), Netafim (Irrigation), Vittia (Biologicals and Fertilizers) and the SuperBac fertilizer line.

“Today we have 16 active companies on the platform. We are in the process of expand our portfolio with high quality suppliers. Our intention is to be the “one-stop-shop” for agricultural inputs for the small and medium size grower in Brazil and Latin America,” explains Bachner. When asked how InstaAgro’s business model compares to other players in the field such as the recently funded Agrofy, Bachner explains, “We don’t see our model as competitive with Agrofy. They are focused on helping the current “brick-and-mortar” stores sell more though online platforms. The small grower will face the same hurdles, accessing reliable products in their model as in the status quo. Since we work directly with the manufacturers, and not the retailers, we can assure that the products that the grower receives are not counterfeit and are of the utmost quality. The new generation of producers comes with a profile that is very technological and has an accurate market vision. For this new generation, the major worry is where their own products are being sold and what needs to be done to conquer more markets and expanding its operations in sustainable and profitable way.”

According to the InstaAgro investor, on-farm production is something already established and now the focus of this new Brazilian grower is on how to use products with less residue and that are more sustainable. This makes that the time previously used to visit the dealerships and acquiring inputs is more limited. This is eased by the technology of the platform, which enables acquiring products at any time, any place, in quick, simple, and safe way. On the other hand, highlights Bachner, something very well received by the customers is the agronomic prescription. “We send an independent 3rd party agronomist to the farm to identify the disease and generate the adequate prescription, beyond the necessary technical support. We do not share an do not agree with writing the prescription at the store-counter, a practice widely used in the market, which is an illegal,” concludes.

InstaAgro reveals that now the focus is the total expansion of customer base through push marketing actions. The startup invests in operational excellence in fulfilling all sales request and acts strongly to reduce the delivery time lead, respond the customer in up to 24/48 hours after the purchase. Concomitantly, the platform aims to continue expanding the supplier base – always with a focus on customer necessity. Finally, it has also on the radar to bring more partners to give more credit to customers through fintech’s, credit cooperatives, banks, and others.