Latin American Agtech Deals from 2010 to 2020

Latin American Agtech Deals from 2010 to 2020

The agriculture technology (agtech) industry encompasses all companies that apply technology to farming activities. Technology-assisted farming, from complex water management solutions to modern genomics, has been around since the early ages of civilization. Advancements in agtech drove the food industry, and the management systems developed for farms and crops can be applied to other industries, like resource management and big data. The agtech industry can be segmented into inputs, production, selection, processing, distribution, and marketing. The inputs segment accounts for over 80% of the capital invested in Latin American companies.

With agriculture pivoting toward relying more on technological advancements and their applications, venture capitalists and investors have increased cross-border operations with Latin American companies in agtech.

This report outlines the announced investments made in Latin American agtech companies between 2010 and 2020. The focus is placed on deal count, volume, and industry with spotlights on the most active investors, such as SP Ventures, NXTP Ventures, and The Yield Lab, as well as the deals closed by Produquimica Industria e Comercio.

Segments Overview

A Closer Look into the Agtech Value Chain



Inputs is the sector’s largest and broadest segment. Companies that deal in agtech inputs work with seeds, agrochemicals, and equipment for farming and irrigation. Working with seeds includes genomics and biotechnology; agrochemicals deal with pesticides, fertilizers, and foliar feeding.


Production and cultivation are arguably the most crowded agtech segments, yet they receive a small share of the total investments. Cultivation companies that include data analysis systems or incorporate machinery into their process have a better chance of securing investments, since traditional farming has not seen a notable growth rate over the last decade. Vertical farming, indoor farming, and hydroponics follow a rising trend in agricultural regions, such as Latin America, rural China, and Egypt.

Selection and Processing

If the raw material management allows for it, the selection and processing segment is usually integrated within the same firm in the value chain This segment includes the storage, manufacturing, or exportation of secondary or end products ready for the consumer. Exportation is the end goal for most producers and processing plants within Latin America, and capital invested into such companies is used for operational expenses. There are many advancements in raw food ingredients processing, yet minimal research and development expenditure occurs in Central and South American agriculture companies.

Distribution and Marketing

Logistics companies in the food and beverage business require cold storage units for most agricultural products. Latin American logistics companies deal with rot, odors, and pests. Distribution companies with an international presence partner with agrochemical companies for food preservation and transportation. Capital sources invested in 150 B2B firms, as opposed to less than 50% of B2C companies.

Marketing companies brand products for different sources. Most Latin American marketing firms promote local produce, while the international community advertises foreign, imported ingredients.

Latin American Market Overview

Agtech Deals from 2010 to 2020

  • Vale (metals and mining) acquired Vale Fertilizantes for $1.2 billion in 2011, making 2011 the year with the largest amount of capital raised for agtech companies in Latin America.
  • Drought issues prevented the closure of agriculture deals between 2010 and 2012, and besides Vale, few other firms were active in financing. The growing trend continued between 2013 and 2018 and is expected to resume in 2021.
  • 2018 was the most active year in the period with over $1.4 billion deployed across 57 deals.

Value Chain Spotlight

Agrochemicals in Inputs

Foreign capital sources actively invest in chemical production companies and research and development activities in Latin America. These investments made agrochemicals the largest segment for Latin American agtech companies in the last decade. Companies researching or implementing agrochemicals in the Latin American region do so with fertilizers, such as early-crop supplements, pesticides, and foliar feeding.

  • A total of 29 agrochemical companies in Latin America were actively involved in a private placement between 2010 and 2020. In 2015, several companies from Argentina, Brazil, and nearby countries were sanctioned for their use of chemicals in their crops. Several cancer cases in these countries were attributed to chemical exposure. This led to a notable drop in the companies actively looking for capital to acquire or produce similar chemicals.
  • Companies that could not withstand this period were forced to declare bankruptcy or sell their assets. This increased the M&A activity over the next four years, with similar companies acquiring businesses like Produquimica Industria e Comercio and Rizoflora Biotechnology due to their strategic value. During this period, eight Brazilian companies and two Argentinean agrochemical companies were purchased.
  • Venture capitalists and private equity firms invested $5 billion in agricultural chemical deals in Latin America, or over 85% of the total capital deployed for agtech deals in the region.
  • Deals with agrochemical companies in Latin America accounted for 64% of the total capital raised. In spite of the 2015 decrease in the number of deals, agrochemicals had more deals than all other verticals combined. Only 38 deals were completed for agrochemical firms, or 11% of the total deal count.

Value Chain Spotlight

Cultivation in Production

Agtech cultivation is a rather broad segment that encompasses early- to late-stage crop management, data analytics, chemical implementation, genomics, and care services. Cultivation is the foundational sector in Latin American agtech, yet it is second to agrochemicals. This is due to the number of companies in the region that do not have enough R&D expenditures to attract external private placements. Cultivation companies in the region tend to grow vertically toward logistics and distribution as opposed to technology and data. As a direct result, cultivation receives a consistent amount of capital and predictable trends in deal count for the Latin American region.

  • Cultivation deals raised 19% of the total capital for Latin American companies between 2010 and 2020. Thirty-nine cultivation companies in this region participated in 55 deals. This showcases the importance of cultivation in Latin American countries, as more than half of them were active in more than one round of investments.
  • Most investment activities halted in 2015 due to the rising health concerns of chemicals and pesticides used on crops. Companies that dealt with cultivation followed the same trend.
  • Agro Amazônia Produtos Agropecuários, a Brazilian company, was forced to sell to Sumitomo Corporation in 2015 with a 0.35 revenue multiple. Another company was marketed in 2016. After 2015, venture capital investment trends normalized until the 2020 COVID-19 pandemic, which introduced a 50% decrease in investment activities.

Agtech Deal Investment Forecasts Moving Forward

Latin American agtech startups set a new record for the decade in the first quarter of 2020.

Since the entire sector benefited from the concerns around food security due to the COVID-19 pandemic, new records are expected for this new decade. Jahani and Associates expects financial activities to grow gradually through 2021 and reach record numbers by the first quarters of 2022. Chemicals and early crop care are developing industries in Latin America. Trends show that manufacturing and chemical research and development will have the highest deal counts in the next coming years.

ASEAN Overview & Highlights

ASEAN Overview & Highlights

ASEAN: Size, Growth, and Relevance (1 of 4)

This is the first part of J&A’s ASEAN series. In it, we will investigate the ASEAN market and economy, its importance, its capital markets, its position in global trade, and finally its integration with other major players like the USA and China.

ASEAN Background

The Southeast Asian region has grown to global prominence over the last 20 years. Economies in Southeast Asia have been growing rapidly due to trade openness and their position in the global economic trade balances. The region is strategically positioned close to the emerging superpowers of China and India. Businesses should be aware of the growth potential and opportunities present in the region. The Association of Southeast Asian Nations (ASEAN), an economic and political union, has empowered the region and facilitated the conditions necessary for rapid development. The ASEAN union includes Singapore, Malaysia, the Philippines, Indonesia, Thailand, and Vietnam, Cambodia, Brunei, Laos, and Myanmar.

The Importance of Southeast Asia

Southeast Asia has demonstrated a remarkable model for economic growth and development that sets the region apart from other developing markets. The region is strategically positioned as a gateway to both China and India and boosts openness to trade and business that is no longer guaranteed in Hong Kong. J&A forecasts a continued expansion of the region’s economic and strategic importance as a link between the rising superpowers of India and China and the companies and consumers of the United States of America.

ASEAN was formed in 1967 to prevent a power vacuum caused by rapid decolonization and foster cooperation in the region. The official ASEAN declaration states that the objectives of the organization are to accelerate economic growth and social progress, and preserve cultural traditions in the region through cooperation and partnership. Regional peace, the rule of law, increased education, and cooperation in agriculture and industry are additional goals.

  • ASEAN has been successful in promoting peace in the region throughout the transition from colonialism and communism towards free-market economies.
  • Trade within the region has grown remarkably from $790 billion in 2000 to $2.8 trillion in 2019.
  • GDP growth in ASEAN has regularly exceeded the global average, resulting in a regional economic growth of 10,116% between 1970 and 2020.


 GDP Growth in ASEAN

  • The combined economy of ASEAN economies has grown at an average rate of 9.3% annually between 1970 and 2020.
  • In 1970 combined ASEAN gross domestic product (GDP) stood at approximately $29 billion, making the region one of the poorest in the world. In comparison, the GDP of South Africa and Brazil in 1970 were $48 billion and $42 billion respectively.
  • The member states of Indonesia, Malaysia, Singapore, and Thailand’s economies are among a handful of emerging markets whose GDP per capita has grown at a rate of at least 3.5% annually over the last 50 years.
  • Additionally Cambodia, Laos, Myanmar, and Vietnam have experienced at least 5% GDP per capita growth over the last 20 years, making the region home to eight of the top-performing emerging economies globally.

ASEAN Forecast Economic Performance in 2021

  • ASEAN markets are expected to rebound strongly in the second half of 2021 as the region and the world emerges from the economic impact of the COVID-19 pandemic.
  • Malaysia, Vietnam, and the Philippines are forecasted to experience GDP growth in excess of 6% for 2021.
  • The economies of Singapore and Indonesia are expected to expand at a rate of between 4% and 5%, which remains significant given the size of these markets.
  • Countries that rely heavily on tourism, such as Brunei and Thailand, are expected to recover more slowly than their other regional counterparts.
  • Myanmar is the regional outlier, with political turmoil resulting in negative growth forecasts.

ASEAN Countries are High Performers

  • ASEAN economies led the emerging markets in regional GDP growth between 2011 and 2019. The region was able to maintain consistent growth rates of between 4.6% and 6% over the period.
  • Economic diversification in Southeast Asia resulted in more consistent GDP growth in comparison to other regions that may be dependent on specific industries such as oil and gas, or heavily linked to the performance of neighboring developed markets.
  • In 2020, ASEAN economies contracted by 6% due to the ramifications of the COVID-19 pandemic and the region’s openness to trade. Southeast Asia is expected to recover at a significantly faster rate than regions such as sub-Saharan Africa, Latin America, and the Caribbean due to effective vaccine rollouts and growth from trade partners like the USA and China.

ASEAN Governments’ Debt-to-GDP Ratio Matches Similar Markets

  • Lower debt-to-GDP ratios give governments more margin for investment into infrastructure and public spending, lower interest payments on public debt, and better sovereign debt ratings.
  • Thailand, the Philippines, and Indonesia have maintained low debt-to-GDP ratios of under 50% despite the size of their economies and populations.
  • Singapore has the highest debt-to-GDP ratio in Southeast Asia. Singapore, however, has the most developed infrastructure in the region, and so would not require large public spending.

We hope that you enjoyed this introduction to ASEAN. We reviewed the organization’s history and economic performance, which provide the basis for the region’s rise to global prominence. The region’s economic growth has been spurred by strong capital markets and high openness to trade. Southeast Asia is a critical market to link the rising superpowers of the East with the spending power of the West. The economic and geopolitical integration of the region will enhance Southeast Asia’s global prominence and economic growth.

ASEAN: Capital Markets and Investment Banking (2 of 4)

This part of J&A’s ASEAN series focuses on the capital markets of the region, their maturity, and their activity. Capital market activity has increased steadily in the ASEAN region over the last 20 years. The number of capital market transactions has more than doubled between 2018 and 2020. Of the capital deployed by ASEAN investors, 56% occurred within mergers and acquisitions. This highlights the appetite for inorganic expansion and the intention for companies in Southeast Asia to grow geographically and into new market segments. Singapore remains the key regional market and houses the largest and most active institutional investors.

  • Capital markets are maturing in Southeast Asia. Capital deployed and deal count have been increasing steadily over time. Capital deployed by ASEAN investors in the first half of 2021 ($19.3 billion) has already exceeded total deployment in 2020 ($18.8 billion).
  • A deal count conducted between 2018 and 2020 increased by 147%, from 144 to 356 announced deals. In the first half of 2021, 244 capital market transactions were announced, with a strong capital market growth forecast as the region emerges from the COVID-19 pandemic.
  • The six largest institutional investment firms, in terms of assets under management, are based in Singapore. The sovereign wealth funds Temasek Holdings and the Government of Singapore Investment Corporation (GIC) are the two largest investors in the ASEAN region. The GIC has a total of 840 active investments and $500 billion in assets under management. Temasek Holdings has a total of $300 billion in assets under management and a total of 336 active portfolio investments.
  • Temasek Holdings has been the most active Southeast Asian investor in 2020 and 2021. The firm conducted a total of 30 investments between Q3 of 2020 and Q3 of 2021.
  • The top seven most active 2020 and 2021 investors in Southeast Asia are based in Singapore and include early-stage venture capital firms that made 25 investments in the period.

Mergers and Acquisitions Dominate Capital Markets in ASEAN

  • In 2020, 56% of total capital deployed by ASEAN investors occurred within mergers and acquisitions. Significant mergers and acquisitions activity highlights the expansion intentions of Southeast Asia firms.
  • As companies outgrow their markets and become comfortable with international expansion, investment banks will see increased opportunities in M&A advisory and acquisition financing.
  • Four sectors that illustrate this trend well are financial services, telecommunications, energy, and natural resources.

Competition is Normalizing ASEAN Equity Returns

Return on average equity of Asia-Pacific Banking has been drifting down toward the global average

  • APAC emerging markets include the 10 ASEAN countries as well as rising superpowers such as China and India.
  • APAC emerging markets have experienced outsized returns on equity investments over the period from 2010 to 2018. As these markets, and particularly China, have become more accessible to international investments, returns have trended towards global averages.
  • Returns among APAC developing nations are still higher than in APAC developed nations such as Australia, Canada, and Russia.
  • However, ASEAN returns are normalizing with parts of the world as growth slows and the region slows from capitalizing on its many competitive advantages.

Investment Banking in ASEAN

  • There are currently 91 registered investment banks operating in ASEAN. Over 80% of these institutions are headquartered outside of Southeast Asia with regional headquarters in Singapore. Morgan Stanley, Royal Bank of Canada, and Bank of America are the three most active investment banks in the region and are all headquartered in North America.
  • The expansion of international investment banks into Southeast Asia is driven by strong regional macroeconomic growth and positive investor environments.
  • The level of investment sophistication in Southeast Asia differentiates the region from other developing markets.

ASEAN Technology Companies are Globally Competitive and Their Strategic Geographic Access to the USA, China, and India Makes High-Growth Companies in the Region Prime Targets for Investors

With uncertainty surrounding the role of Hong Kong and Taiwan, Singapore has become the gateway to the East. Capital market activity in the region is dominated by institutional investors from the city-state. The strength of mergers and acquisition activity by Southeast Asia companies is a sign of the expansion ambitions of the region. International investors and companies seeking growth partners should be mindful of the continued expansion and strategic position of the ASEAN markets. J&A forecasts an increase in capital market activity as nations such as Indonesia, Malaysia, Thailand, and Vietnam develop.

We hope that you enjoyed this overview of ASEAN capital markets. In the next section of this analysis, we will review the region’s position on global trade. The region’s economic growth has been spurred by strong capital markets and high openness to trade. Southeast Asia is a critical market to link the rising superpowers of the East with the spending power of the West. The economic and geopolitical integration of the region will enhance Southeast Asia’s global prominence and economic growth.

ASEAN: Global Trade (3 of 4)

Part three of J&A’s ASEAN series focuses on the region’s trade openness and trade advantages. The Association of Southeast Asian Nations (ASEAN) has facilitated the rapid economic growth and development of the region. The increase in trade between member states and other regions internationally is a critical factor for this growth and success. Singapore acts as a regional trade hub and is ranked first in global exports per capita and third in openness to trade. J&A forecasts continued growth in trade in Southeast Asia and the continual rise of the region in global prominence.

Openness to Trade

The trade openness index is calculated through the sum of a nation’s exports and imports as a share of the total GDP as a percentage. Trade openness indicates the strong influence of trade on domestic industries.

Trade openness spurs economic growth and encourages foreign direct investment. It also promotes competitive markets and allows consumers access to a wider range of products at competitive prices.

Trade openness can negatively impact domestic businesses and industries that are not competitive with large, multinational companies. This is particularly common in sectors such as agriculture and manufacturing. Countries with high trade openness indexes rely heavily on international business cycles and may experience highly volatile economic conditions.

  • Trade within Southeast Asia has grown remarkably from $790 billion in 2000 to $2.8 trillion in 2019.
  • Five of the 10 ASEAN nations—Cambodia, Malaysia, Singapore, Thailand, and Vietnam—have a trade openness index of over 100%.
  • Intra-ASEAN trade accounted for 22.5% of total merchandising imports and exports.
  • ASEAN’s largest trading partners in 2019 were China, with 22% of imports and 14% of exports, the European Union, with 21.5% of imports and 13% of exports, and the United States, with 8% of imports and 13% of exports.

 Key Market: Singapore

  • Singapore ranks first globally on per capita exports, $52,700 annually, and fifth globally for imports per capita, $56,300 annually. The nation has a trade openness index of 317%, the third-highest globally.
  • Singapore is the regional trade hub of Southeast Asia and accounts for 27.5% of the region’s total exports.
  • The nation had a 79% manufacturing products to total exports ratio, and a 74% manufacturing products to imports ratio, showing the reliance of domestic industry on trade.
  • Top imports into Singapore include electrical equipment (21%), minerals (22%), machinery and appliances (13%), and precious metals (6%).
  • Leading exports from Singapore include electrical equipment (28%), minerals (15%), machinery and appliances (13%), and instruments and apparatus (7%).

Deregulation Has Boosted the ASEAN Economy

  • ASEAN nations have reduced internal and international tariffs and non-tariff barriers (NTB) in an effort to stimulate trade in the region.
  • Average regional tariffs have decreased from 25% in 1990 to 7% in 2010, a period in which ASEAN nations also experienced large real GDP growth.

Openness to trade and ease of business have been vital contributing elements to the growth of Southeast Asian economies such as Singapore, Malaysia, and Thailand.

The region is ideally positioned to act as a hub for trade among the emerging superpowers of India and China and developed markets such as Australia and the USA. J&A forecasts continued growth of regional and international trade in ASEAN, which will further spur the region’s economic and geopolitical rise.

We hope that you enjoyed this introduction to ASEAN. We reviewed the organization’s history and economic performance, which provides the basis for the region’s rise to global prominence. The region’s economic growth has been spurred by strong capital markets and high openness to trade. Southeast Asia is a critical market to link the rising superpowers of the East with the spending power of the West. The economic and geopolitical integration of the region will enhance Southeast Asia’s global prominence and economic growth.

ASEAN: Economic Integration with the USA, MENA, and China (4 of 4)

This is the final part of J&A’s ASEAN series, wherein we will investigate the integration of ASEAN economies into the rest of the world. ASEAN will prove a key geopolitical and economic battleground for the United States and China.

The region’s geographic positioning, openness to trade, and expeditious economic emergence have made the ASEAN a prominent economic and political force. Southeast Asia is closely integrated with the developed nations of the European Union, the USA, and Australia through trade, foreign direct investment (FDI), and business. China, however, is now the region’s closest trade partner and has increased its share in FDI to exceed that of the USA. Economic integration between ASEAN and the Middle East and North Africa (MENA) has strengthened through trade and capital market activity. J&A forecasts the continued rise to global prominence of the ASEAN as a hub for trade positioned to connect the manufacturing of the East with the spending power of the West.

  • Southeast Asia is strategically positioned to act as a link between the rising superpowers of India and China and established markets such as the USA, Canada, and Australia.
  • Intra-ASEAN trade has increased at a rate of 9.5% annually from $608 billion in 2013 to $1.15 trillion in 2020.
  • ASEAN’s biggest trading partner is China, which conducted a total trade, consisting of both imports and exports, of $777 billion with the region in 2020. The share of ASEAN exports to China has increased from 3.7% in total exports in 2005 to 13.9% in 2018. The share of Chinese imports in the region has increased from 5.4% to 20.5% of imports in the same period.
  • ASEAN conducted a total of $358 billion in trade with the US. The share of imports and exports with the US and the EU as a percentage of total trade has declined significantly between 2005 and 2018 and signals the global rise of Asian markets.
  • Trade between Southeast Asia and MENA has increased at a compound annual growth rate of 8.9% between 2013 and 2020 and now accounts for $296 billion in ASEAN total trade.

Southeast Asia is strategically positioned to act as a link between the rising superpowers of India and China and established markets such as the USA, Canada, and Australia.

  • Trade surpluses in ASEAN have been driven by nations’ rapid increase of production in agriculture and manufacturing. In addition, the region now has a globally competitive services sector.
  • The $1,432 billion of regional exports in 2018 exceeded the $1,384 billion spent on imports in the same year. Thus, a total regional trade surplus of $48 billion was achieved in 2018.
  • Large trade surpluses ensure a continual injection of capital into an economy and grant authorities the ability to increase foreign reserves or strengthen local currencies depending on policy preferences.

ASEAN Receives FDI from Diverse Nations and Growingly in China

  • Countries in Southeast Asia have historically received large amounts of FDI from developed nations such as the USA, Japan, and members of the European Union.
  • China and Hong Kong have recently displaced the USA in the region’s top five FDI contributors and jointly contributed over 13% of the region’s FDI in 2018. The geopolitical significance of China’s influence through FDI and trade, which now eclipse the influence of the USA, should not be understated.
  • Intra-ASEAN FDI has grown substantially and contributed approximately 16% of FDI in 2018. Developed nations in the region are contributing large quantities to stimulate growth in neighboring markets.

Southeast Asia is strategically positioned as a global trade and investment hub. The economies of Singapore, Indonesia, and Thailand could serve as a springboard for western companies to access the rising superpowers of India and China.

The level of Chinese influence in the region through trade and FDI will leave many in the USA weary. However, companies from North America should spot opportunities now available to them to access Chinese customers through the ASEAN markets. The increase in economic integration between the ASEAN through trade and FDI is undoubtedly a contributing factor to the region’s economic growth and one that many other developing regions have struggled to emulate. J&A forecasts the continued rise of ASEAN prominence through economic integration.

We hope that you enjoyed this introduction to ASEAN. We reviewed the organization’s history and economic performance, which provide the basis for the region’s rise to global prominence.
The region’s economic growth has been spurred by strong capital markets and high openness to trade. Southeast Asia is a critical market to link the rising superpowers of the East with the spending power of the West. The economic and geopolitical integration of the region will enhance Southeast Asia’s global prominence and economic growth.

Jahani & Associates Capital Market Report: Freight-Forward Technology

Jahani & Associates Capital Market Report: Freight-Forward Technology

As a top investment bank headquartered in New York City, Jahani and Associates (J&A) have rich experience providing bank mergers and acquisitions (M&A) advisory, private placement and commercialization, fund advisory, and global trade services to clients all over the world.

Our report provides an overview of the freight-forward technology sector, analyzes recent capital market activity in the space, and spotlights the recent rise conducted by Flexport. From the data collected in our capital market report, our expert tech investors forecast the continued expansion in freight technology and an increase in deals and capital deployed within the sector.

J&A Capital Markets Report: Freight Technology

Freight technology, or freight-forwarding technology, has seen an approximate 2,000% increase in capital deployment since 2010. Freight technology companies, such as Flexport, Forto, and YunQuNa, have achieved billion-dollar valuations and unicorn status based on their growth across the USA, Europe, and China. This report provides an overview of the freight technology sector, analyzes recent capital market activity in the space, and spotlights the recent rise conducted by Flexport.

Freight forwarding involves brokering a variety of logistics services to assist clients with international and domestic shipments. Freight technology companies have digitalized this brokering process. These companies allow customers to arrange international trade through ship or sea using an online portal, perform live tracking, and exercise logistics data management.

Announced Freight Technology

  • Global capital deployed in the freight technology sector increased by 1,987% between 2010 and 2021.
  • In the sector, $62.14 billion was deployed across 835 deals, with an average deal size of $74.42 million. Considerably large acquisitions have resulted in a significant increase in capital deployed over the first half of 2021. Deal count has increased by over 1,000% since 2010, a trend that J&A anticipates will continue.
  • The most significant deal within the sector was the acquisition of the German technology company Bombardier Transportation by the French logistics firm Alstom. The acquisition was announced on January 29, 2021, for a reported $9.24 billion.

Announced Supply Chain Management Technology Deals

  • Venture and pre-venture capital deals represented 24% of capital deployed in the sector. The involvement of early-stage investors shows the potential for new entrants to the market and the freight technology sector’s growth potential.
  • Mergers and acquisitions represented the largest capital deployment, 36%, since 2010 in the sector. Most acquisitions have been conducted by large logistics corporations looking to add the competitive advantages that cutting-edge freight technology provides.
  • Freight technology companies from the USA received over 65% of the deployed capital in the past decade. Venture capital and private equity groups in North America have been particularly active in the sector since 2010.

Deal Spotlight: Flexport

The Company

Flexport is a freight forwarding technology company that has implemented a platform designed to provide greater insights and influence over every stage of logistics in the supply chain. Flexport offers product delivery and tracking through its platform along with real-time data analytics. The company facilities logistics through cargo ship, plane, or truck and allows logistics companies to use and monitor their assets effectively.

 Recent Fundraising

  • Flexport completed a late-stage VC round of $10 million on July 15, 2021, at a pre-money valuation of $2.2 billion.
  • The deal was led by GV, SoftBank, and Fabrica Ventures. Ten other investors participated in the round.
  • Flexport has already raised $1.36 billion through 10 previous equity rounds and one debt raise.

The rapid acceleration of globalization was halted by the economic effects of the COVID-19 pandemic. International trade has rebounded and will reach new heights in 2022 and beyond. Freight technology already plays a critical role in international trade, and this will only increase over time. J&A forecasts the continued expansion in freight technology and an increase in deals and capital deployed within the sector.

Choose Jahani & Associates

J&A specializes in cutting-edge financial theory and business practicality. Our unmatched skills in technology, engineering, and business operations allow us to create sustainable value for our clients. Contact us today to gain unparalleled access to commercial and financial opportunities.

Inventory Management and Warehousing Technology

Inventory Management and Warehousing Technology

Capital markets activity for inventory and warehousing solutions has exceeded expectations in 2020 and is on track to more than double in 2021, with more than $90 billion in announced transactions thus far.

This is mostly due to pandemic-related changes in 2020 and 2021 in these industries. Contrary to most industries, inventory technology sectors have seen an increase in adoption over the last few months, increasing competition for retailers, e-commerce companies, wholesalers, and distribution firms.

In 2021, deal count has already exceeded previous years in both deal count and average deal size and could double by the end of the year. In this report, J&A provide an analysis of the reasons behind these trends, as well as a profile of key players in these industries.

Supply Chain Technology

Companies in the supply chain management industry and similar sectors are increasingly using a combination of technologies like artificial intelligence (AI), machine learning, and predictive analytics.

By doing so they can automate warehouse operations, improve delivery times, proactively manage inventory, optimize strategic sourcing relationships, and create new customer experiences. This increases customer satisfaction, reduces attrition, benefits the top line, and boosts income margins.

Inventory Management and Warehousing

Developments during the COVID-19 pandemic in 2020 and 2021 have increased the need for all businesses to integrate warehousing and inventory tracking technology. This trend has accelerated in 2021 and is not expected to slow down, even after business operations normalize once the virus is controlled.

Recent advancements in inventory management systems readily offer real-time tracking of inventory levels, orders, and deliveries, providing instant error detection, efficient actionable feedback, and quicker response times. Radio Frequency Identification (RFID) chips, sensors, and asset-tagging technologies are leading spaces attracting investor interests.

Innovations in warehousing revolved around improving warehouse efficiency through the application of robotics and other automation software; wearable augmented reality-based devices; and third-party warehousing services targeting individual retailers. The sector also saw the rise of warehousing marketplaces in recent years, adding alternatives to the handling of excess inventory and excess warehouse space.

Competitive Landscape

The supply chain management industry has over 2,000 technology firms in diverse verticals. Two of the most active verticals are inventory management systems and warehousing software. Other verticals include business productivity software for supply chain, logistics, media technology, and application software. The most crowded markets in 2020 are transportation logistics services ($39 billion raised), quality management software ($32 billion raised), and logistics service providers ($82 billion raised).

Public companies, such as Amazon, Oracle, Uber, and FedEx, are the most active companies involved in capital placements and M&A activity in this space. Private companies like Grab, Instacart, and Aurora are involved in smaller series funding in comparison. Forecasts show that players like these will continue being involved in PIPE transactions, Series A to D funding, and acquisition activities.

  • The year 2021 has been record-breaking for logistics software and supply management technology firms.
  • Forecasts suggest more than $180 billion will be raised by the end of 2021, doubling the capital raised in 2020.
  • With roughly the same number of deals forecasted for 2021 as were done in 2020, forecasts suggest 2021 will double the capital invested.
  • So far in 2021, $90 billion has been raised; $91 billion was raised in all of 2020. This upsurge in deal size is due to COVID-19 trends expected to require logistics technology for businesses to integrate or implement.
  • J&A does not expect that the deal count in this space will increase in 2021; deal counts in 2020 and previous years have consistently increased by an average of 25% since 2011.
So far $90 billion has been raised in 2021; $91 billion was raised in all of 2020. This upsurge in deal size is due to COVID-19 trends expected to require logistics technology for businesses to integrate or implement.

The Future of Inventory Management and Warehousing Technology

The COVID-19 pandemic has affected the way many businesses operate their in-house warehousing capabilities and outsourced technologies. J&A expects the trends set by this influence will grow for at least half a decade once the pandemic is officially contained. Most players in the industry have and will continue to buy strategic smaller entities to tap into new sectors and integrate the technologies offered by them.

Source: Pitchbook, Accessed August 2021

Global Trade Analysis: The Role of the GCC in Long-Term MENA Development (5/5)

Global Trade Analysis: The Role of the GCC in Long-Term MENA Development

Part 5 of 5

Global Trade Analysis: The Role of the GCC in Long Term MENA Development (5 of 5)

The Gulf Cooperation Council (GCC) includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The GCC was formally established on May 25, 1981. The council’s purpose is to unify the countries’ currency, trade markets, and other economic markets. There have been discussions to turn the council into a union with closer unity through a single currency and other economic integrations.

The GCC has made several changes to its policies that support its continued openness to trade. These policy changes include generating unified technical standards, harmonized customs administration procedures, and reduced clearance requirements to lower non-tariff barriers within the GCC. There are a number of special agencies in charge of creating and implementing technical standards, undertaking commercial arbitration, and registering patents: the Standardization and Metrology Organization for GCC in Saudi Arabia, the Technical Telecommunications Bureau in Bahrain, and the Regional Committee for Electrical Energy Systems in Qatar. These organizations have focused on making trade organizations more efficient.

The GCC Will Continue to Play a Crucial Role in International Trade

The following chart shows the trade openness of the GCC. This index is calculated by adding imports and exports in goods and services and dividing by the total GDP. The larger the ratio, the more the country is open to international trade.

  • All GCC countries are more open to trade than the world average.
  • The UAE has significantly increased its trade openness since 2006 and is currently the most open GCC country.
  • This openness to trade remains a significant strength of the region to attract new companies to offer products and services in and around the region.
  • Bahrain has maintained a historical and current openness to trade in excess of its GCC counterparts; this is likely due to the country’s limited oil reserves.

The GCC’s Greatest Long-Term Sustainability Risk Is Lack of Diversification

  • GCC countries remain wealthy due to their dominance of the global fuel market.
  • As global economies move towards renewable energies, the GCC can expect a reduction in oil revenue.
  • Therefore, for GCC countries to continue growing, they must diversify into non-fuel areas such as technology and services.
  • Factoring the oil industry into the GCC’s GDP increases its real GDP by 50%.

The UAE Has Implemented a Successful Path to Diversification and KSA Is Set to Follow

  • As evidenced in this series, the UAE has diversified its economy and will continue to do so as a hub for global trade, technology, and services—particularly in the MENA region.
  • The UAE’s investment in free zones and open economic policies have attracted businesses. These free zones include Abu Dhabi Global Markets (ADGM), Dubai International Financial Centre (DIFC), Dubai Multi-Commodities Centre (DMCC), and many more with specific industry focuses.
  • KSA will be a rising force in the GCC. The Kingdom’s Crown Prince, Mohammed Bin Salman Al Saud, has made a commitment to the country’s Vision 2030, which includes significant steps to diversify the economy.
  • Saudi Arabia’s debt as a percentage of GDP remains very favorable: in 2019 the kingdom’s debt was only 20% of the GDP, whereas countries like the USA and UK have over 100% debt-to-GDP ratios.

This completes J&A’s series on global trade in the MENA region. The series covered major categories of imports and exports in the region such as raw materials, fuels, transportation and machinery, textile, and other product categories. The region represents approximately half the volume of imports and exports compared to the USA and China, but produces nearly 40% of the world’s fuel supply. The general volatility of fuel has pushed leaders to diversify the economy. Food independence is a major objective of MENA leaders. The GCC’s trade openness as measured by the World Economic Forum has significantly increased over the last 10 years. J&A anticipates trade openness to continuously increase in the region, particularly with the anticipated expansion of the Kingdom of Saudi Arabia and its Vision 2030 program.

Source: IAGS | The World Bank | IMF GCC Banking | IMF GCC Markets | IMF Trade and Foreign Investment | Saudi Arabia Vision 2030 | UAE Ministry of Finance

Global Trade Analysis: Food Independence in the MENA Region (Part 4 of 5)

Global Trade Analysis: Food Independence in the MENA Region (Part 4 of 5)

Global Trade Analysis: Food Independence in the MENA Region (4 of 5)

So far this series has covered the MENA region’s global import and export position, the dynamics between KSA and the UAE, and the region’s general dependence on fuel, which drives the need for diversification.

As part of their effort to diversify, MENA countries are seeking food and agriculture independence. The UAE and KSA are minor contributors to MENA’s food and agriculture export totals. Food and agriculture imports and exports make up a relatively small portion of total MENA numbers, but they are essential to the long-term stability of the region.

The following data indicate the current state of food imports and exports in the MENA region, the UAE, and KSA as well as key steps being taken to improve food production capability through technology.

The UAE and KSA Are Minor Players in MENA’s Total Food and Agriculture Exports and Imports

UAE, KSA, and MENA Agriculture and Food Imports and Exports from 2015-2018
  • The UAE and KSA export less food and agriculture products than the average MENA country.
  • Food and agriculture account for approximately 4.5% and 3.5% of MENA’s imports and exports respectively; these percentages are expected to grow over the next five years.
  • The UAE’s food and agriculture exports are growing; imports have remained stable.
  • KSA’s food and agriculture exports have remained stable; imports have slowly decreased.

KSA Imports More Agriculture and Food Products Than Other MENA Countries

UAE, KSA, and MENA Agriculture and Food Imports as a Percentage of Total Imports
  • KSA imports approximately 2% more food and agriculture products compared to other MENA countries.
  • The UAE imports 50% less food and agriculture than other MENA countries.
  • This stark contrast between the two countries highlights the UAE’s investment in food production capacity and technology.

The UAE and KSA Export Fewer Food and Agriculture Products Compared to Other MENA Countries as a Percentage of Total Exports

UAE, KSA, and MENA Agriculture and Food Exports as a Percentage of Total Exports
  • The UAE and KSA both export less food on average than other MENA countries as a percentage of total exports.
  • This is less significant than import disparities since food independence is a major economic driver, while food production and distribution are not.
  • KSA and the UAE are expected to continue producing less food and agriculture products than MENA countries in the near future.

The UAE’s Commitment to Food and Agriculture Leadership Is Evidenced in Its Tech Investments

As shown in the previous J&A series, tech investments are on the rise in the MENA region. The UAE has recently made 10 major food-tech investments as part of its continued commitment to food independence and leadership. These food-tech investments include smart farms, food delivery, curated menus, and more. Below are three examples of these investments from different categories.

KSA & Middle East Food-tech investments
In the final part of our series, we will investigate the Gulf Cooperation Council’s (GCC) role in global trade for the MENA region, as well as steps the council is taking to increase its cooperation and cumulative strength.

Source: IAGS | The World Bank | IMF GCC Banking | IMF GCC Markets | IMF Trade and Foreign Investment | Saudi Arabia Vision 2030 | UAE Ministry of Finance

Global Trade Analysis: Fuel Dependency in the MENA Region (Part 3 of 5)

Global Trade Analysis: Fuel Dependency in the MENA Region (Part 3 of 5)

Global Trade Analysis: Fuel Dependency in the MENA Region (3 of 5)

Fuel has been, is, and will continue to be the MENA region’s most dominant export category. MENA countries export nearly 40% of the world’s fuel supply, and fuel makes up approximately 50% of the region’s exports. Global consumption of fuel has allowed the MENA region to grow in power over the last 50 years. However, these opportunities bring risk; fuel volatility can affect the region disproportionately to other more diversified economies. Therefore, MENA countries are seeking immediate diversification.

Today, the MENA Region Is Dependent on Fuel Exports

MENA Fuel Exports compared to All Other Export Categories
  • Fuel is consistently just over 50% of the entire MENA region’s exports.
  • There are major government initiatives within all MENA countries to continue diversifying their economies away from fuel dependence.
  • In 2020, fuel remains the region’s top export.

KSA Is More Dependent on Fuel Exports Compared to Other MENA Countries, Including the UAE

KSA Fuel Exports compared to All Other Export Categories
  • Fuel makes up approximately 80% of KSA’s yearly exports.
  • Saudi Arabia’s Vision 2030 is to reduce the kingdom’s dependence on oil and diversify its economy, and to develop public service sectors such as healthcare, education, infrastructure, recreation, and tourism.
  • Saudi Arabia’s economic evolution will also come with political considerations, as the kingdom continues to enhance its global positioning.

The UAE Is Least Dependent on Fuel as Its Major Export Compared to Other MENA Countries

UAE Fuel Exports compared to All Other Export Categories
  • Fuel makes up approximately 20% of the UAE’s yearly exports.
  • This is a result of the UAE’s ability to diversify its economy and increase its services, technology, and trading value.
  • The UAE’s investment in free zones and open economic policies have attracted businesses to the region. These free zones include Abu Dhabi Global Markets (ADGM), Dubai International Financial Centre (DIFC), Dubai Multi-Commodities Centre (DMCC), and many more with specific industry focuses.

KSA Is Expected to Follow the UAE’s Diversification Strategy Through Its Vision 2030

KSA’s Vision 2030 is a framework to reduce Saudi Arabia’s dependence on oil and diversify its economy. This will be accomplished through investments in health, education, infrastructure, recreation, and tourism. The Vision 2030’s goals include reinforcing economic and investment activities, increasing non-oil international trade, increasing government spending on the military, and promoting a more secular image of the kingdom.
The Crown Prince Mohammed bin Salman Al Saud announced Vision 2030 on April 25, 2016.
The next part of our series will review the importance of food independence for the MENA region as well as steps governments are taking to develop agricultural capabilities.

Source: IAGS | The World Bank | IMF GCC Banking | IMF GCC Markets | IMF Trade and Foreign Investment | Saudi Arabia Vision 2030 | UAE Ministry of Finance

Global Trade Analysis: UAE and KSA Imports and Exports (Part 2 of 5)

Global Trade Analysis: UAE and KSA Imports and Exports (Part 2 of 5)

Global Trade Analysis: UAE and KSA Imports and Exports (Part 1 of 5)

The Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) are the two most dominant countries in the Middle East and North Africa (MENA) region. These countries possess advantageous economic, cultural, financial, trade, and religious positions. They also represent almost half of the imports and exports for the entire region.

Herein is an analysis of KSA and UAE’s imports and exports across major categories. The data indicates key themes in food and fuels that will be the subject of parts three and four in this series.

J&A summarizes imports and exports into six major categories for MENA analysis

The nomenclature followed within these categories are based on World Customs Organization nomenclature and sector classifications for the harmonized system. Data was collected directly from publicly available World Bank systems.

The UAE and KSA Make up 50% of MENA’s Imports and Exports

  • The UAE and KSA are the most dominant players in MENA, accounting for over 50% of the region’s imports and exports.
  • Exports for the UAE, KSA, and the MENA region have steadily been increasing while imports have steadily decreased, suggesting increasing independence of MENA economies.

The UAE and KSA Are Relatively Equal When It Comes to Import Diversity

  • The UAE and KSA import goods and services in relatively equal proportions.
  • The UAE imports more than KSA by approximately 60%.
  • Both the UAE and KSA import and export transportation, machinery, and raw materials more than any other category.

KSA Dominates the Region’s Fuel Exports; the UAE Leads in Transportation Exports

  • KSA is by far the region’s leader in fuel exports, which serve as a major differentiator for the country and economy; there has been no year since 2015 where the UAE exported more fuels than KSA.
  • Fuel is less than 50% of UAE exports on average, while it makes up nearly 80% of KSA’s exports in any given year.
  • KSA’s second most common export is raw materials, accounting for approximately 10% of the kingdom’s exports.
The UAE and KSA are the most dominant players in the MENA economy. They account for the majority of imports and exports as well as most of the region’s economic activity. The UAE has been removing barriers to trade that are not tariff-related, such as allowing expedited customs and the use of technology to create more efficient government organizations. KSA has recently started opening trade policies that reflect UAE standards.

Source: IAGS | The World Bank | IMF GCC Banking | IMF GCC Markets | IMF Trade and Foreign Investment | Saudi Arabia Vision 2030 | UAE Ministry of Finance

J&A Report: Regional Focus: Why Single-Origin Coffee Matters

J&A Report: Regional Focus: Why Single-Origin Coffee Matters

Specialty coffees have been on the rise for coffee connoisseurs. This trend has boosted general knowledge and enthusiasm for single-origin coffees. In this report, J&A briefly provides an introduction of single-origin coffee, outlines the differences in flavor profiles by region, compares single-origin with blended or mixed coffees, and lays out overall trends.

What Is Single-Origin Coffee?

Single-origin coffee comes from a single producer, crop, or region in one country. Single-origin coffee is often called single-farm, single-estate, single-malt, or single-vineyard coffee. Coffees that are not single-origin are blends, which include more than one single-origin coffee. Due to the one-time harvest in the year, single-origins are only available during specific times throughout the year.

Because tracing single-origin coffee leads to a single place, they have a distinct flavor based on the process from growth to processing of the region. Many factors influence flavors including botanical variety, soil, climate, altitude, and shade. Processing methods also vary by region and influence the final taste.

FIGURE 1: Coffee Flavor Profiles Along the Coffee Bean Belt

Single-Origins Versus Blends

Blends are a mix of two or more single-origin coffees from different regions. As such, the tastes vary, and the origin is not as distinguishable. Blends are more flexible in the market but cannot be sold at the same price or compete against single-origin coffees in niche markets. Blends are usually cheaper and found most commonly.

Single-Origins Coffee Taste

Single-origin coffees taste different than blends in the market. Light roasting single-origin coffee develops subtle aromas and distinct tasting notes. The body is more tea-like, and the flavors are fruity and citric rather than nutty or chocolaty.

Single-Origin Coffee Popularity

  • In the first half of 2019, the single-origin coffee market resulted in $182 million in grocery sales.
  • In 2020, these sales grew by 4%, outpacing the total premium coffee segment.
  • Among coffee drinkers between the ages of 25 and 49, 81% are willing to pay 10% more for single-origin coffees, incurring financial rewards for the many smallholder farmers who provide 80% of the world’s coffee beans.

The rising amount of cafés offering alternative brew methods has influenced the current interest in single-origin coffee. Single-origins are particularly popular because of their traceability. The impact of single-origins affects farming methods, and specialty farmers are developing and improving high-quality crops in response to demand. Some farms and processing plants experiment with their varietals or cultivars selection, control over the growth stage, harvesting time and technique, and the milling and processing method.

Outlook for Single-Origin Coffee Moving Forward

This report outlined what specialty single-origin coffee is and what specifics categorize a coffee as such. The difference in atmosphere and preferred processing methods within regions produce many flavors, making single-origin coffees a niche market for coffee connoisseurs. Blends are a mixture of various single-origin coffees that are indistinct from a specific region’s flavor profile. The rising sales and marketing trends for specialty coffees boosted the market for single-origins by 4% in 2020. J&A expects this trend to maintain as the coffee industry raises awareness for farm owners and consciousness towards processing methods.

Source: Counter Culture Coffee, MyRecipes, Perfect Daily Grind, Tripe Pundit, and Forbes

Jahani and Associates Industry Report: Specialty Coffee Testing

Jahani and Associates Industry Report: Specialty Coffee Testing

The global specialty coffee market grew by 11.8% in 2020 despite drastic contractions in the restaurant and hospitality sector1

The market is set to expand with a compound annual growth rate of 13% between 2021 and 2024. Specialty coffee is an artisan industry with unique scoring methods and flavor profiling designed to test the quality of each cup. This article will provide insights into the industry-standard coffee testing process and the rules and regulations regarding specialty coffee.

Coffee Testing: The Official Process

The Speciality Coffee Association2 has set specific guidelines for coffee sampling to ensure uniformity in testing standards. Beans are roasted, sampled, and then assigned a grade (out of 100) based on numerous characteristics and criteria.

Samples are roasted for between eight and 12 minutes and allowed to rest for at least eight hours2. The beans must be consumed within 24 hours of roasting. The Speciality Coffee Association makes recommendations for the size of the cup, the pouring method, and the measurements used when testing beans. At least five cups of coffee are prepared from the samples to evaluate the beans’ flavor profile and unique qualities.

Sample Testing Criteria

Scoring is based on 10 defined categories2. The fragrance of the beans when pouring, roasting, and tasting is the first noted quality. The sweetness, body, balance, acidity, and the beans’ flavor profile contribute to the majority of the total score.

Homogeneity of the coffee cups, a lack of defects, and the brightness of the coffee are the remaining categories. The overall perception of samples is what grants additional points.

The points in each category are assigned as follows: six points for satisfactory, seven for very good, eight for excellent, nine for outstanding, and 10, being the top score, for perfect.

To be classified as specialty coffee, coffee beans must score 80 or higher 2. Beans with a score of 80 – 84.99 are considered very good; between 85 – 89.99 are considered excellent. The top 1% of all specialty coffee beans hold outstanding scores of 90 or above.

Coffee Testing: Flavor Profile

Coffee sampling and tasting notes are subjective, but the coffee tasters’ flavor wheel denotes the standard categories of flavors commonly experienced by coffee drinkers.

The coffee tasters flavor wheel was designed by World Coffee Research in 1995.

Simplified Coffee Tasters’ Flavor Wheel

The wheel outlines nine flavor categories with numerous sub-categories. Desired flavor profiles include fruity, sweet, nutty, and cocoa, and various spices. Unwanted flavors such as chemical or sour notes will lead to lower testing scores. Coffee flavors are uniquely perceived, and individuals with different tasting pallets may pick up specific notes over others. Generally, specialty coffee is roasted in a manner to highlight the natural flavor profile of the beans.

For the accurate comparison of beans, the testing of specialty coffee is a standardized and repeatable system.The quality of specialty-grade coffee beans is verified to ensure consumer confidence. The rise of specialty coffee will continue as global coffee drinkers gain access to new varieties, regions, and flavor profiles.


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