TRAG Raises $370K to Enhance Parametric Agricultural Insurance Platform

TRAG, a parametric agricultural insurance platform, has successfully completed its first investment round, securing R$2 million in funding (about USD 370K). The round was led by DOMO.VC, a venture capital firm, with contributions from angel investors.

TRAG’s focus is on Brazil’s agricultural insurance market, which, according to the company, has the potential for annual premiums of approximately USD 28 billion. This estimate takes into account the country’s vast agricultural sector, which spans more than 115 million hectares of crops, in addition to forests and pastures that could benefit from insurance coverage.

The platform employs artificial intelligence to assess risks by analyzing data from satellites. This technology allows for real-time evaluation of soil, plant, and atmospheric conditions. The AI-driven approach aims to provide more precise risk assessments, offering tailored solutions to clients.

The newly acquired investment will be used to further develop TRAG’s platform, expand its range of AI-based products, and attract new customers. According to co-founder and Chief Product Officer Luis Ricci Maia, this round of funding will help the company grow by enhancing its platform and recruiting key personnel.

Unlike traditional agricultural insurance, which compensates based on actual damage, parametric insurance pays out when certain predefined conditions, such as rainfall levels, are met. This approach simplifies the claims process, offering quicker payouts without the need for detailed damage assessments.

Franco Pontillo, partner at DOMO.VC, emphasized that TRAG’s solutions address a key challenge in Brazil’s agribusiness sector, which is increasingly affected by climate change.

TRAG was also recently selected as one of the 10 finalists to pitch at GLOCAL’s Final Pitch Day on October 3, 2024.