U.S. agribusiness unicorn preparing the ground to enter Brazil

RIO DE JANEIRO, BRAZIL – Less than two weeks ago, the American startup Farmers Business Network (FBN), an agribusiness giant, announced a US$300 million Series G round, led by Fidelity Investments and accompanied by Archer Daniels Midland (ADM).

With the round, the company reached a total of US$870 million raised since its founding in 2014 and achieved a market valuation of US$3.9 billion. It is one of the world’s largest agribusiness unicorns, owning a base that is worth a fortune.

The company has 33 thousand farmers from the United States, Canada, and Australia connected to its platform, and has accurate data of 85,000 acres (34,300 hectares) covered. But, if it depends on a Brazilian who lives in Chicago, the company will ‘invade’ Brazilian territory.

The executive, Felipe Yazbek, head of new business development, responsible for discovering new market opportunities for the company, was recently in Brazil visiting farms in Mato Grosso with a team from FBN and has been studying the entry into the Brazilian national market.

“My job is to find new opportunities for FBN,” Yazbek tells NeoFeed. “We are looking at Brazil and India, which are two big players in agriculture,” he says. Brazil, an agribusiness powerhouse that handled R$1.98 trillion (US$359 billion) in 2020, cannot be ruled out.

The groundwork for FBN’s entry into Brazil is being prepared with the help of Antonio Moreira Salles and Julio Benetti, founders and managers of Mandi Ventures, a venture capital fund specialized in agribusiness and an investor in FBN.

“It is a strategic investor that is helping us in this analysis process to enter the Brazilian market,” says Yazbek. When asked by NeoFeed, Moreira Salles confirmed that he is advising FBN in this challenge.

“We are explaining to them the legal, juridical, and regulatory issues. In addition, we are putting them in contact with professionals who understand agribusiness in Brazil, providing them with market studies and competition analysis,” says Moreira Salles.

FBN is a large ecosystem made up of three platforms. It started, in 2014, with analytics, then, in 2016, it began selling inputs directly to producers, and, finally, in 2018, it started selling financial products. Of these three pillars, analytics is the only free service.

The system gathers information from the various machines that a farm has, a tractor, a harvester, and so on. Each brand has a data platform, and FBN gathers all the information, previously separate, in a single environment.

In addition, the startup complements this with new insights such as satellite images and compares production with nearby producers without identifying who they are. All data is anonymous but accurate for each region.

With this, it is possible to know if the farmer harvested well or poorly, how well each herbicide worked if the planting was well executed, which seed variety worked best, and so on. “It’s not rocket science, what we did was to bring all the available data together on one platform and make it accessible to growers,” says Yazbek.

From there, by having the data and access to thousands of producers, in 2016, the startup began to explore another segment: that of raw materials. The company set up a marketplace with all the seeds on the market to offer to farmers. It would be another distribution channel allied to market intelligence.

When they saw that FBN was selling directly to farmers, the large industries in the sector cut off the supply of seeds and pesticides to “nip it in the bud”. In other words, kill the competition at the outset.

“The problem is that we had already set up warehouses, assembled the whole logistical infrastructure with teams distributing,” says Yazbek. In the three countries where it operates, the startup has 25 warehouses and 500 commercial representatives.

Faced with resistance from seed manufacturers and the business already set up, FBN decided to pivot, becoming an even more powerful competitor. “Eighty to ninety percent of the pesticides used by farmers already have patents that have expired,” says Yazbek.

FBN then went after the patent registrations that already had authorization from American agencies. It spent millions of dollars in the process. One of the companies bought was Willowood. With the papers in hand, it went to China to outsource the production and create its brand.

With information from Neo Feed