Seedz raises $16.5 million for M&As and farmer loans

Alexia Ventures leads series A at agtech that created a loyalty program for rural producers

A (rare) startup that generates cash. Seedz, an agtech that has been helping to digitize the world of the countryside with the lure of a loyalty program for farmers, has just received a contribution of US$ 16.5 million — more than R$ 85 million — to reinforce the M&As agenda , give traction to the internationalization of the business and provide funding for the still incipient financial services vertical.

The series A round was led by Alexia Ventures, Patrick Arippol’s firm that has already invested in startups such as Gaivota (another agtech), Carbonext and Neuralmed. VOX Capital, Endeavor Scale-Up and Parceiro Ventures also became part of the startup’s cap table.

Seedz was able to renew the bet of investors who had already supported the company in the closed seed capital round just over a year ago. Volpe Capital (a firm created by former Softbank André Maciel), 10b and The Yield Lab — two funds specialized in agro — and Tridon Participações followed the round.

Created in 2017, Seedz built customer management software (a CRM, the market acronym) to help with the digitalization of agriculture, giving intelligence to data that was previously dispersed. The startup serves from machine companies such as John Deere to pesticide and fertilizer manufacturers.

“We wanted to create a platform that could connect transactional data. For this, we needed a CRM with a data view of the farmer’s journey, starting before the gate”, said Matheus Ganem, CEO and co-founder of Seedz.

With the data, input manufacturers now have more data on the sales process at resellers — better understanding the pace of sell-in and sell-out —, which was not always possible before due to the lack of integration of the systems.

To attract farmers to the process, the creation of a loyalty program was essential, generating discounts for producers when purchasing inputs from partner companies. The reward model of a loyalty business also helped Seedz become a cash generator very early on.

In Seedz’s business model, which is quadrupling in size every year, companies pay a subscription to use the customer management software, but the flagship in terms of revenue is the loyalty program. To give points (the Seedz currency) to producers who buy from resellers, companies buy these credits from the startup itself.

“Seedz’s economics have always been very positive, which allowed the business to grow, generating cash even due to the particular dynamics of the loyalty business,” said Volpe Capital partner Gabriel Marcassa to Pipeline. “Seedz currency is the biggest revenue engine,” reinforced Ganem. In the agro loyalty market, the startup competes with Orbia, an onslaught of giants such as Bayer, Itaú BBA, Yara and Bravium.

With 80,000 active farmers in the base and more than 1,000 companies using the platform, Seedz understood that it could also grow by expanding the base of digital services for farmers. Last year, funds raised from 10b and Volpe helped finance the acquisitions of Pefarm, a farm management company, and Atomic Agro, a crop planning application.

With the capital raised now with the A series, Seedz should continue the M&As strategy, acquiring more service companies that help in the digitization of the field.

Resources should also be applied in the internationalization process and in the financial services vertical. The credit operations for farmers are already being tested, but the idea now is to use part of the money raised to enter the senior or mezzanine quotas of the FIDCs that portfolio the operations originated in the Seedz ecosystem.

Source: Pipeline Value