Bloomberg Línea — GrainChain, a US-based agtech that produces software for agribusiness, has partnered with MasterBarter to start operations in Brazil.
The company helps in the digitalization of the supply chain with business models that range from production to transactions.
GrainChain was born in Texas, but its largest office is in Guadalajara, Mexico. The company also serves Central America through an office in Tegucigalpa, Honduras.
With inflation driving up costs around the world, Luis Macias, CEO of GrainChain, told Bloomberg Línea that the one thing the world is not going to stop doing no matter how bad things get is consuming food.
“If we do not produce enough food, the impact of the cost increase in basic food like grains would cause devastation,” he said.
With this focus, the company has been developing agriculture software for the last ten years focused on first-mile, traceability, logistics, and IoT integration to the settlement of grains. The startup earns in transactions through the platform, in a subscription model, or even the “pay for what you use” SaaS.
GrainChain works with 24 different products, from coffee, palm oil, sunflower, and corn, focusing on agriculture products. It doesn’t operate with livestock.
“We can work from many models. Our main focus with MasterBarter is a very effective transactional model that includes financing,” said Macias.
“Our overall goal is just to level the plain field, to be able to bring effective liquidity, and financing to the farmer, and to be able to do that with fully automated systems. In Brazil, we’ve partnered with MasterBarter and Mastercard to bring fully digital solutions to the small-medium farmer for them not only being able to access instant liquidity, but to have a transparent traceable transaction on our platform,” he stated.
The CEO states that it is important to find local partners for each country in which it operates to understand the business and have relationships with the agro community.
GrainChain operates the technology from the offices in Mexico and the United States, and in Brazil MasterBarter will be its physical presence executing sales.
“Brazil has always been our dream. When you start looking at agriculture technology Brazil is the best customer you want to have. Not only are they very open to digitization but they are very open to technology and solutions that will solve significant problems that are out there. Brazil is one of the most important grain markets in the world and is also the perfect partner for our technology. There is great connectivity, excellent relationships with banking through open banking, there is a strong reception to tech with young farmers,” said Macias.
GrainChain is expanding to Brazil with its own capital but doesn’t rule out raising money in the future for faster expansion.
The startup completed its Series A about two years ago. Macias says the company will grow earnings six times this year versus the last year. “We have reached breakeven for many of the previous months of the year, so we are in a positive place.”
The company began the year with about 18,000 users and should close in 2022 with over 30,000 users.
“We do grains, large-scale commodities, one user can be very significant.”
The CEO adds that even though the future is very uncertain right now, leading technology to pump up the breaks, agriculture works differently. The inputs pricing and the price of food is going up, and he sees an opportunity for growers, but to manage volatility he says they need technology and investment.
With inflation, if countries don’t have domestic production, it is going to be hard to import, he believes.
“We have a significant problem, but if brakes are pumped in agriculture we are going to have a bigger problem. We had a lot of conversations in the last two months about how to keep going. We feel that if we slow down, we wouldn’t ‘t be ensuring that kind of food security that GrainChain creates. We have to make sure that every dollar that we spend is a very effective dollar and provides true growth and impact. We would be doing a disservice to our industry, and right now is probably one of the most important times to invest in agriculture,” said Macias.
GrainChain is currently negotiating expansion plans to Peru, Colombia, and Argentina.