Launchway Media spoke with Edouard Kaiflin and Karlu Chu, Co-Founders of Colombian agtech startup Ynasu to learn more about the Latin American agriculture technology space. Read on to discover what’s new, what’s trending, and where agtech is going in Latin America.
The word ‘Ynasu’ comes from the indigenous chibcha language meaning to meet with someone. And that is the idea behind Ynasu, a B2B direct trade platform connecting farmers and buyers for more transparent, traceable, and direct agricultural trade.
Ynasu is developing a direct trade platform for cacao and other agricultural raw materials. The company is building digital tools in order to ensure traceability and transparency along the supply chain.
All the farmer associations whom they work with are reachable directly through the interface, allowing buyers to know not only the origin of the products but also the stories of those producing them. A percentage of the transactions are reinvested in social projects, allowing buyers across the world to take part directly in the improvement of their lives, setting up a virtuous circle between the farmer and the food producers.
1. How has agriculture technology in Latin America changed in the past five years? What can be attributed to its growth?
Working in the industry, we have noticed that agriculture technology is slowly growing with new concepts being introduced. This is all thanks to Internet penetration access in more rural areas. Whereas farmers were once rather isolated and lacked access to information (although many still do), the younger generation, such as the children of farmers now have access to better education and also to more information. As a result, they are now becoming farmers who can benefit from technology. Given that, farmers are more open to embracing new technologies.
2. What challenges are there for startups wanting to enter the agtech in Latin America space?
Building Ynasu in Latin America, we’ve faced a lot of challenges that we’re sure many other agtech startups face. These are common across most agtech ventures in any area of the world but are amplified in Latin America.
In no particular order, these would be:
Internet access – most towns in the countryside have the Internet and are connected. However, once you go a short distance outside of the towns, Internet and cellular access are patchy at best.
Smartphone penetration – some farmers use smartphones, but the majority do not. They still rely on feature phones and calls to do business or communicate.
Technological uptake – when we think of start-ups in the West, the most successful ones are made for users who are already up skilled in technology and can see the benefits of doing things in a different and innovative way. There are also more early-adopters of new technology who are willing to use a new product and provide very useful feedback, which is a significant advantage for a startup in the development phase. The challenge with agriculture in Latin America is that business and trade are still conducted in quite an old-fashioned manner, so you not only have to explain the technology to the farmers, but also the ideas themselves are often even more abstract than your startups in the west. This is an added obstacle.
Traditional business practices – The actors in the agriculture sector in Latin America can be grouped into two categories: small-scale farmers and large monopolies or multinationals. We think that agricultural innovations should aim to assist the small-scale farmers, who are the majority who work the fields, but at times have been left behind by society in terms of advancement of technology and benefits. Many times, however, it is also this group, which is harder to influence with innovation and new ways of doing business.
3. What advice can you give to startups that want to enter the agtech in Latin America space?
A key piece of advice is to establish local networks and have local partners to help navigate and bridge cultural differences, and if necessary language barriers. When looking for a partner, be careful with whom you partner. It takes time, but in the end, it will be worth the extra effort.
We consider ourselves an international and multicultural founding team, and we both also speak Spanish. Despite this, at times it may have been helpful to have had a native speaker with us, especially when working in agriculture.
It’s one thing speaking and using Spanish in the cities and with professionals, but in the countryside, there are often versions of the language that many locals in the cities themselves struggle with. I remember one of the first interviews I did with a farmer who was telling me about how his family had all left him alone on the farm and had gone to the cities because they couldn’t see a future in farming. I tried my best to understand him and to express how bad I felt but that our mission at Ynasu is to help improve farmers’ lives and make it a viable future, but in the end, I don’t think many verbal messages got through. I think he understood my facial expressions, though!
The second reason for a local partner is that sometimes there are also unsaid rules and ways to do things, which, as foreigners, take a long time to understand. In addition, there can also be some skepticism towards foreigners, especially in agriculture due to history of colonization and then the entrance of multinationals.
In light of all this, we recently brought on board Sergio, our Colombian director and partner. We’ve known Sergio for a while now, and he helped us along our journey, providing much needed local insight and advice. We thought it only made sense to bring him on board officially. Since joining Ynasu, Sergio has helped us progress a lot quicker.
4. What should VCs look for in new agtech technology set to benefit Latin America? And precautions they should take?
Depending on what the VC’s are targeting, they should look for startups that have found an innovative platform that marries both the local market traditions as well as a way to bridge this with “western” expectations of markets and accessibility.
Teams that have both local and international experience are important as well, as business culture is different in local markets.
5. What startups in this space do you consider successful (or on their way to success)?
We admire Siembraviva for putting farmers at the core of their success, which is obviously something we aim to do. They help farmers construct greenhouses and sell fresh fruit and vegetables to consumers directly.
On the other end of the spectrum, Comproagro is building a platform that allows farmers to harness the power of group buying to source and buy their farming inputs.