Show Me the Money: How AgFintech Can Unlock the AgTech VC Flywheel
#11 BAR Raiser
There’s a paradox in VC for AgTech in Latin America. The market is enormous. The need is urgent. The potential impact is global—think food security, energy transition, and climate resilience. So why isn’t more venture capital flowing in?
Some say AgTech simply isn’t a good fit for venture capital. But the real issue may be simpler: most startups are focused on the wrong problems—and tackling them in the wrong order.
The Wrong Focus (for VC)
Too many AgTech startups are building science projects. They start in the lab or on the field plot—tracking chlorophyll, improving yields, training drones to spot crop stress. Technically impressive. Commercially limited.
In reality, investors aren’t looking for agronomic breakthroughs. They’re looking for scalable, profitable businesses that solve painful, urgent problems.
And in Latin America, there’s no shortage of pain. Climate volatility. Supply chain inefficiencies. Price shocks. And above all—credit. Farmers don’t just need better data and technology. First they need better access to capital.
Yet most AgTech startups are stuck in yield optimization while their customers are struggling to finance the next crop. The result? Great tech. Weak adoption. And no investor appetite.
The Wrong Order (for VC)
Even when startups are addressing real problems, many approach them in the wrong sequence—at least from a venture capital perspective.
In any emerging sector, capital flows first to what’s familiar. Generalist VCs back what they know: SaaS platforms, fintech rails, recurring revenue. Deep science and complex hardware tend to come later—after the early exits, not before.
That’s the progression AgTech skipped. And it’s why the capital flywheel hasn’t started.
AgFintech is the obvious entry point. It’s a proven model, easy to understand, and aligns with how VCs already evaluate risk and scale. It also offers the potential for big returns and future unicorns—just like fintech did in other sectors across Latin America, with successes such as Nubank, Creditas and Ebanx.
For a VC, it’s a rare combination: massive market, painful problem, familiar structure. That’s what gets deals done.
Start with Credit, Unlock the Flywheel
Credit isn’t just a pain point—it’s the most urgent need for farmers in Latin America. And that makes it the smartest place to start from a customer perspective.
AgFintechs that finance working capital, embed payments, or improve risk scoring are solving a mission-critical problem. But more than that, they gain something invaluable: visibility.
By controlling the credit layer, AgFintechs gain deep insight into how farmers operate—what they plant, how they spend, when they earn, and what they can afford. That data unlocks a natural upsell path to agronomic tools, digital services, insurance, and sustainability solutions.
You’re no longer guessing who your customer is or what they need. You’re segmenting intelligently. You’re timing perfectly.
That’s how you build trust. That’s how you scale efficiently. And that’s how AgTech—starting from credit—becomes a platform business.
Sustainability Can Win—If It Pays
Sustainability is another massive opportunity—but only if it’s treated as a business lever, not a moral imperative.
The pressure is real. Carbon markets, emissions reporting, and regenerative supply chains are no longer distant goals—they’re fast becoming requirements. Retailers, regulators, and global buyers are all tightening the screws. Compliance will be mandatory.
But compliance isn’t a business model. Founders need to flip the pitch.
Don’t sell climate impact. Sell cost savings. Sell new revenue streams. Sell risk reduction or supply chain access. If your solution helps companies meet new standards and improve their bottom line, it moves from ESG checkbox to essential infrastructure.
That’s when sustainability scales. And that’s when it gets funded.
Conclusion: Build What the Market—and the Money—Wants
Venture capital is about pain—and scale. Investors want to back businesses that solve urgent problems in ways that can grow fast and generate strong returns.
If you’re building in AgTech, ask yourself:
Is your customer’s pain real and urgent?
Can your solution scale?
Can you make money?
If the answer isn’t a clear and strong “yes” to all three, you may have a useful tool—but not a venture-backable startup.
Latin America doesn’t need more AgTech ideas. It needs AgTech businesses. Pain-killing. Scalable. Profitable.
And the best place to start is with the most broken—and most bankable—part of the value chain: credit.
AgFintech is the on-ramp that aligns the interests of farmers and investors. It solves a real, urgent need with a business model VCs already understand.
Get that right, and the AgTech flywheel will finally start to spin.
Thanks for reading.
KFG 🚀
Kieran Finbar Gartlan is an Irish native with over 30 years experience living and working in Brazil. He is Managing Partner at The Yield Lab Latam, a leading venture capital firm investing in Agrifood and Climate Tech startups in Latin America. All views, opinions, and commentary expressed are strictly his own.