Digital transformation process in the field opens opportunities for Brazilian startups to develop solutions for Canadian clients
By Sérgio Siscaro
A real revolution is taking place in the countryside. The increasingly widespread use of innovative and disruptive solutions, which have been common in several areas of activity, also make a difference in agriculture – and contribute to giving more intelligence, efficiency and cost reduction to food production. In this context, agtechs, agrotechs or agritechs, which are startups specialized in developing technologies that contribute to making the sector more competitive, have a fundamental role.
Given the importance of the agricultural sector for its economy, Brazil is one of the countries that has stood out in the development of innovative technologies in the field. So much so that, according to recent data from the Brazilian Association of Startups (ABStartups), out of a total universe of 13.7 thousand startups operating in the country in October, 3.65% of them are agritechs.
In order to show these startups the opportunities to offer their solutions in the Canadian market, the Ministry of Foreign Affairs, through the Science, Technology and Innovation Promotion sector (Sectec) of the Embassy of Brazil in Ottawa and in partnership with the CTRS Solutions, launched in September the report Agritechs Market in Canada: Regulatory Milestone and Opportunities. The document, available for download, deals with Canadian agricultural and technological regulatory aspects and maps the cooperation and business opportunities for Brazilian companies that develop innovative agricultural technologies in that country. On October 6th, the embassy held a webinar on the study, also available online.
Space for new players
The study analyzes the main characteristics of the Canadian agricultural market, the different regions in the country that stand out and the use of technological solutions to increase agricultural productivity – defined in the document as “new methods, processes or devices used to improve agricultural production, profits , efficiency or greater sustainability”. Going deeper into the agritech market in Canada, the report highlights that Canadian startups operating in this segment raised only 3.4% of the financing, in dollars, available in 2018 (US$ 577 million), accounting for 3.4% of business flow. As a comparison, in the United States agritechs raised 48% of financing and 39% of the business flow. “Canada lags behind in investments in the region and this suggests that there is ample room for growth in the market”, evaluates the survey.
Even so, the embassy report makes it clear that Canada is home to some of the most prominent agritechs in the world, operating in the areas of genetics and reproduction, farm management, crop and nutrient protection, machinery and robotics, irrigation and water management, farming systems and solutions to connect the farm to the final consumer, among other areas.
Attention is also given to the Canadian innovation incentive system, which allows the development of agritechs in an ecosystem formed by investors, incubators and accelerators, and universities and research centers. In addition, federal programs support innovation in the field, such as the Innovation, Science and Economic Development Canada (ISED), the Agri-Food Table, the Innovation Superclusters Initiative, the Agriculture and Agri-Food Canada (AAFC) and the Canadian Agricultural Partnership.
The development of clean technologies, which contributes to achieving a low-carbon economy, is also the subject of initiatives by the Government of Canada, supporting solutions that reduce the emission of greenhouse gases and increase energy efficiency. This is the case, for example, of the Living Laboratories Initiative, which brings together farmers, scientists and other collaborators to develop technologies aimed at mitigating and adapting to climate change, reducing water contamination and increasing biodiversity.
According to the report, some segments tend to concentrate most of the Canadian demand for technological solutions developed by agritechs. This is because final users – farmers and producers – often purchase these products or services directly from trusted distributors and suppliers.
Thus, the key segments would be those formed by wholesalers, distributors and intermediaries; providers; telecommunications companies; and big producers.
Operations in Canada
Based on interviews with several experts, the report produced by the Brazilian embassy in Ottawa established some considerations for Brazilian agritechs interested in expanding their operations to the Canadian market. The need to establish a subsidiary in Canada is highlighted, as well as forging relationships with suppliers (especially channel partnerships), participating in trade fairs, using incubators or accelerators, and preparing for the process of entering the market – which involves from immigration and obtaining work permits to learning about regulatory, federal and provincial requirements.