Decoy's founding team: Lucas von Zuben, Túlio Nunes and Tatiana Magalhães. Photo: Courtesy

Brazilian agritech Decoy raises BRL 9 million to launch biotechnological pest control solution

Funding round was led by SP Ventures and followed by Farmbase fund. In an interview with LABS, COO Túlio Nunes said that the startup is also developing products for the pet and poultry markets

Ler em português

Decoy Smart Control received an investment of BRL 9 million ($1.8 million in today’s currency) to scale its operations. The biotechnology startup has been developing sustainable solutions for animal health monitoring and pest control and currently serves more than 800 farms in Brazil within its testing program. More than 90,000 heads of cattle have been treated with the startup‘s first and main product: a biological acaricide. Last year’s revenue exceeded BRL 2 million ($400,000).

The investment was led by SP Ventures, a Latin American manager company focused on agtechs and foodtech startups, and accompanied by the corporate venture capital fund of Farmabase, a Brazilian company that works in the animal health segment.

“Our company was created with the purpose of bringing sustainable solutions to the animal health segment. We use a technological package that today is a frontier within agriculture: biological control,” the COO and partner of the company, Túlio Nunes, told LABS.

READ ALSO: The future of farming: how Brazilian agtechs can multiply and change the sector for good

At the moment, the company’s main product is the biological acaricide for cattle, which is in an advanced stage of development and in the process of being registered for commercialization at the Brazilian Ministry of Agriculture, Livestock and Supply (Mapa).

The cattle tick is an ectoparasite that feeds on the animal’s blood, reducing its weight, productivity, leather quality and is a vector of several diseases. The main one is the bovine parasitic sadness, which can lead to death of the animal.

“The rancher struggles with the way the tick is treated today. Nowadays, chemical products can’t deliver the effectiveness they did before, as there are several strains of ticks throughout Brazil that are resistant to several of the molecules available on the market,” explained Nunes.

READ ALSO: Brazilian Pink Farms grows to new heights

In order to make the products profitable and enable the necessary tests and research, Decoy works directly with the ranchers. “We sign a testing partnership agreement; they test our technology and provide us important insights, which we incorporate to improve our project”, said Nunes. “We signed this contract for testing, so they get to know the technology and get in touch with us. We offer the tools and they deliver the results and the cost support, so that way we can carry out our activities and increasingly develop our products,” he added.

In the short term, Decoy intends to launch three products for the same animal health segment. In addition to the acaricide for cattle, a product for flea and tick control in dogs is under development (still at an earlier stage than the acaricide, but already being tested) and two other products aiming the poultry market (still at an early stage and not revealed).

The funds will be invested in different areas. The main plan is to launch our products and build our portfolio, which should occur within the next two years. We expect to launch the acaricide for cattle on the market in early 2023. As part of the launch process, we are assembling a commercial and marketing structure and infrastructure

Túlio Nunes, COO and partner at Decoy.

The Brazilian market is a benchmark in the use of biopesticides. According to the Brazilian Agricultural Research Corporation (Embrapa), linked to Mapa, more than 58,6 million acres of farms used some type of biological control in Brazil in 2019, making the country the world leader in technology.

The segment had revenues of US$ 3.8 billion in 2018 and has the potential to reach US$ 11 billion by 2025. But there’s not an easy path to reach these numbers. “Different from other areas of technology, biotechnology requires greater funding and requires more time for product development”, Nunes pointed out. The program of direct partnerships with ranchers, according to Nunes, helps to speed up the process. Still, any solution requires back-and-forth between laboratories and hands-on testing all the way to the registration process, not to mention the regulatory and health barriers in the industry.