Meet Guillermo de Vivanco, CEO and Co-Founder of SpaceAg. Guillermo shares his background as an investor and what inspired his transition into the world of ag-tech entrepreneurship. He highlights the critical problems and opportunities SpaceAg addresses in the agriculture industry, emphasizing the importance of data-driven decision-making and sustainability. Guillermo sheds light on SpaceAg’s innovative solutions and their impact on helping farmers make smarter decisions, improve yields, and reduce inputs.
tribu (T): Guillermo, can you tell us a bit about your background as an investor and what inspired you to transition into the role of a founder in the ag-tech sector?
Guillermo (G): Before co-founding SpaceAG, I co-founded and was Managing Director of Angel Ventures Peru (the first angel investors’ network and seed VC fund in Peru). I was constantly meeting startup founders, reviewing their companies, and presenting the best opportunities to investors. Many of these companies were Peruvian companies trying to replicate other startups operating in larger markets such as the US. I realized there were few companies leveraging the competitive advantages of their locations to become global players.
Peru is one of the largest producers of high-value crops in the world. We are the largest exporter of blueberries and table grapes and second exporter of avocados worldwide. Located in Peru are the top, global producers of these crops. One of the main reasons I decided to transition from Angel Ventures to become co-founder of SpaceAG is that my co-founder had access to these growers. He was already working with them in other business, selling drone images of their farms. I realized that we could build a software product with the help of these leading growers and gain access to other countries in which they operated. I decided this was a great opportunity not only to build a product hand-by-hand with top early adopters but also to scale to other countries in the region with them.
(T): What specific problems or opportunities did you identify in the agriculture industry that led you to start SpaceAg?
(G): The main problem was how they collect and analyze data to make critical decisions related to pest and disease management, irrigation and labor management. They were still using paper and pen, and multiple spreadsheets to manage their top, strategic KPIs. Especially in agriculture, growers need integrated data because plants are integrated systems that correlate multiple variables to perform (weather, irrigation, pests and diseases, labor tasks, etc.) Without an integrated and digital platform, growers were making late and imprecise decisions. This not only reduced the income of growers but resulted in wasted resources vital to our environment such as water and land.
(T): SpaceAg is focused on reinventing agriculture through digital transformation. Could you elaborate on how your solutions work to help farmers make smarter decisions and improve their yields while reducing inputs?
(G): We replace paper and pen in agriculture with a mobile app that serves as a digital notebook. Growers can customize multiple forms in our software to capture any type of data they want to collect in their fields. Our app works offline, capturing the exact place and time data is collected. When users have access to internet, they can upload their data to our platform. This data is integrated to weather stations and irrigation controllers that we connect to our platform via APIs. With all this data, our web app generates maps and reports to help growers make better decisions.
For example, our users collect data related to pests and diseases affecting their crops. With this information, we build maps to show which areas in their farms are most affected so they can make focalized pesticides applications, reducing costs and applying less chemicals to the ground. Our users also collect data of workers’ performance such as kilograms harvested per worker. We use this information to build performance rankings and help growers to automatically generate payrolls and to decide the workers that need to be recognized (with bonuses) or trained.
(T): What products or services does SpaceAg offer, and which markets are you primarily targeting with your solutions?
We offer 5 different modules: pest and disease management, irrigation, labor, phenology, and packing. We currently target high-value crop growers of more than 50 hectares. However, we are launching standard and “lighter” versions of our modules to serve a much larger market and target small and medium sized growers of any type of crops. We have customers in Peru, Chile, Ecuador, and Mexico. Our plan is to expand our operations to all Latin American markets in the near term.
(T): Who’s your typical client and who are the main users of your products?
(G): Our typical client is an industrial grower of high-value crops with over 50 hectares under management. We serve 2 type of users per client: (1) scouts: workers who walk the fields to capture information about several variables such as pests and diseases, irrigation, and labor. They are users of our mobile app (2) supervisors: managers who have access to maps and reports build with the data captured by scouts. They are users of our web app.
(T): The digitalization of agriculture comes with its own set of challenges. Could you share some of the key challenges you’ve encountered and how they may differ across the various markets in which you operate?
(G): The main challenges we find in the digitalization of agriculture are the following:
- Users are not tech savvy. They have profound experience and knowledge of plants, but they are not knowledgeable and experienced in digital solutions.
- ROI is difficult to prove: Plants are complex systems affected by multiple variables. It is hard to attribute an improvement in plants’ performance to certain digital solution. The results are not directly traceable.
- Validation timeframes: Most digital solutions in agriculture require a whole agricultural year (6 to 12 months) to show their benefits. This could be a normal timeframe for growers but is a long wait for startups.
- Scaling an agtech product can be a huge challenge. There are thousands of crops and varieties. There are multiple types of farms and growers. It is very hard to find a unique solution that can serve this diverse and wide market.
- There is a lot of tradition in agriculture: Agriculture is a 12,000-year-old industry. Many farmers are used to traditional practices such as touching the ground to analyze soil moisture or walking the fields to analyze plant growth and search for pests and disease. Replacing these traditional activities with digital solutions involves breaking paradigms.
- Little time of growers: Growers are always busy in their fields. They must perform thousands of activities during a growing season. Finding the right time and place to present growers with potential innovations is a big challenge.
(T): Building on the previous question, what steps do you believe can be taken by the ecosystem—startups, corporations, investors, and others—to address and overcome these challenges? And how is SpaceAg contributing to this effort?
- Startups must be aware of how difficult is to calculate ROI of many agtech solutions. They need to work hand-by-hand with early adopters to record and communicate success cases that serve as a proof to scale their solutions to the mainstream market. They also need to consider agricultural timeframes, validation and sales cycles are longer. They need to raise money accordingly.
- Investors need to understand the particularities of agriculture compared to other industries. Validation times and sales cycles are longer, they follow the rhythm of plants and not of humans. Agtech startups might take more time to scale. However, when they do their solutions are stickier.
- Corporations need to collaborate with agtech startups. Most agricultural corporations have access to many growers with whom they could pilot new solutions. They also have the brand recognition and audiences to promote success stories, as well as large distribution networks to serve as startups’ channel partners.
(T): In your experience, are there any unique advantages that Latin America offers in terms of ag-tech adoption compared to other regions, and how has this influenced your company’s strategy?
(G): The agriculture market of Latin America is huge. Latin America provides with fruit and other crops to the northern hemisphere during the winter season. Compared to other regions in the southern hemisphere, Latin America has a well-developed agriculture industry, consolidated in many markets with leading global companies. Most of the global growers and agriculture corporations have important operations in the region. Once startups gain access to these growers and corporations, there is a big opportunity to scale globally.
(T): Collaboration is often key in the startup and ag-tech ecosystems. Are there any notable partnerships or collaborations that have played a significant role in SpaceAg’s growth and success?
(G): We have a partnership with Netafim, the largest manufacturer of irrigation systems in the world. Together with Netafim, we have developed Netavision – an irrigation module included in our software. This collaboration has helped us increase our revenue in 25% in the last 6 months. The potential of this partnership is much bigger. Netafim has a 30% share of the global market. The goal is to start scaling with them to different countries in the region.
(T): SpaceAg has undoubtedly achieved significant milestones in its journey. Could you highlight one that you’re particularly proud of?
(G): Definitely our partnership with Netafim and having the 2 top agtech early stage investors in the world in our cap table: The Yield Lab and Silicon Valley Growth Venture THRIVE. Last year, THRIVE selected us as the most innovative early stage agtech startup in the world. We won first prize among 900 startups from more than 25 countries.
(T): What are some of the current projects or initiatives that SpaceAg is actively working on, and what can we expect from the company in the near future?
(G): We have won a very important project to digitize all sugar cane cutters in Mexico. We are working with top multinational brands, NGOs, and the largest sugarcane producers in this country to gain traceability of the sugarcane workers payment system, and to create social impact for this large group of people.
(T): As a final question, what advice would you give to aspiring entrepreneurs, especially those interested in entering the ag-tech sector, considering your many years of experience as an investor and entrepreneur?
(G): I think the most important advice is to make the time understand the market, the customers and the users. This is not an easy market. The closer you are to the users, the better product and business you are going to build. This is obvious but in agtech there is a difference. Being close to users, means a lot of visits to the farms, crazy schedules (farm work starts early) and working under extreme conditions. If you have a farmer in your founding team, it could be a great move. Also, be ready to break paradigms. Agriculture a very traditional industry. Don’t get discourage by rejection, try to understand farmers needs and personality, and adapt. Lastly, recognize there is a big challenge in scaling agtech solutions. There are many types of crops and farms. It is very difficult to build a unique solution that fits all. Find an attractive market and focus before thinking about scaling but have a strategy to scale and to access a larger market when the moment is right.