Gaivota is Focused on the Digital Transformation of Agribusinesses

For years, Valor has scanned for opportunities in the Brazilian agriculture industry, a tremendously large space with an estimated US$250B addressable market (14% of the country’s GDP). The country boasts a total of 5 million farms and is the world’s leading producer of coffee, sugarcane, orange, soybeans, corn, and cotton — no wonder Brazil is known as “the world’s farm”.

Brazilian farms, partly because of their size, are among the most modern in the world, with highly mechanized operations and some of the highest yields globally. However, when it comes to the digitization of ag’s supply chain– in Brazil, and abroad –players are still stuck with legacy systems and inefficient processes, opening opportunities for technological innovations that could drive productivity up and benefit the entire supply chain.

With a global population that is projected to reach 10B by 2050 — causing a disproportionate 70% increase in the demand for food — figuring out how to make the agricultural supply chain more efficient is of utmost importance. But, with the advancement of technologies such as artificial intelligence, predictive analytics, and automation, there may be some hope for the industry.

With the evolution of our thesis around digitization of agribusiness Valor saw a massive market potential for efficiency gains, and looked for a startup that could take the industry to the next level. Valor is proud to announce our investment in Gaivota, which came out of stealth last week. We were joined by Canary, Mandi Ventures, and Alexia Ventures in the Series A financing.

While lots of innovation is coming from the emerging AgTech ecosystem in Brazil (with estimates ranging between 300 and 1,500 startups), the vast majority of these startups are focused on agronomic optimization for the farm.

Enter Gaivota, a company founded by three Brazilians in late 2016 at Stanford (an MBA, a PhD, and a Professor). Rather than working directly with the farm, Gaivota chose to build a platform for players higher up in the value chain — input suppliers, trading companies, banks, retailers, and support-service providers. Apart from operating in a sector embedded with uncertainty, these players still rely on the use of Excel spreadsheets to prospect new farms as customers, coordinate sales processes, assess risk, and monitor operations across sales, finance, and support. As a consequence, internal processes are haphazard and inefficient, and data science optimizations are out of the question. These are just some of the pains Gaivota is set to tackle.

Gaivota spent years working with the industry, understanding these workflows, and redesigning them from scratch. They are amongst the first in the world to build an industry-specific, fully integrated platform that deploys AI-driven intelligence inside end-to-end business workflows. They are pioneers in embedding social and environmental compliance into common business processes like sales and financing, enabling ESG practices at scale. For example, their clients have access to a proprietary algorithm detecting crops growing in land where it should not, like deforested areas in the Cerrado and the Amazon.

Although still early in Gaivota’s journey, we are impressed with the depth and breadth the company has achieved so far in the industry, working with global and local players of all sizes. Gaivota is well on its way to be the digital catalyzer that the physically-native, $2+ trillion global agriculture industry needs.

Phillip Trauer — Principal at Valor Capital Group