en.Wedoany.com Reported - Brazilian agriculture parametric insurance startup Trag has raised 2.5 million reais in a funding round led by investment management firm DOMO.VC. The funds will be primarily used to develop AI models for analyzing agricultural climate risks and improve user experience tools.
This funding is an extension of the 2 million reais investment Trag received in 2024, bringing the two-year-old startup's total cumulative funding to 4.5 million reais. The capital not only supplements cash flow but also marks a significant strategic upgrade for the company.
Trag already has a platform that cross-analyzes multidimensional data including soil, plants, and atmosphere, aggregating agronomic information from planting dates, plant structure, and seed types to historical series of precipitation and temperature indicators. The company plans to improve this technology through AI, enabling models to understand climate risks more personally and provide more effective insurance recommendations and underwriting for specific products. Leonardo Maia, CEO and co-founder of Trag, explained in an interview that the team has begun extensively applying AI in the technology so that models can better understand climate risks.
After a year of intensive operations, Trag's founders discovered that the main challenge in agriculture lies not only in the lack of access to agricultural insurance but also in the difficulty of understanding, measuring, and managing climate risks. The company decided to expand its business from a pure parametric insurance structurer to a climate-smart platform, providing risk indicators and decision-making bases for climate events to producers, cooperatives, distributors, insurance companies, and industry financiers. Luís Ricci Maia, co-founder and COO of Trag, stated that the market needs some infrastructure to provide this agricultural climate risk intelligence, offering quantification and assessment of such risks.
In the second half of the year, Trag expects to launch new products for clients, monetizing climate-smart attributes separately. The company utilizes global satellite data from NASA, combined with proprietary AI models, to measure climate risks and structure parametric insurance. Unlike traditional agricultural insurance that requires on-site inspections, parametric models automatically trigger payouts when specific climate indicators reach preset contract levels, reducing operational costs and expanding insurable scope. For example, the insurance can operate on beef cattle farms, triggering payouts based on rainfall occurrence and specific forecasted precipitation amounts.
Currently, Trag's operations cover eight Brazilian states and eight agricultural crops, with clients including GDM, Culttivo, Aegro, CrediSIS, A2G Seguros, and Geagro. The insured value has increased from 55 million reais to 81 million reais, a 47% growth; the insured area is approximately 20,000 hectares, with the platform analyzing over 300,000 hectares. The founders stated that experience from the first cycle helped strategic evolution, where educating clients about climate risks is as important as providing a sound insurance structure.
Last year, Trag's founding team visited Silicon Valley and, after exchanges with global innovation platform Plug and Play, solidified the direction of AI application in the business. In addition to DOMO.VC, investors in this round include Ventiur, Anjos do Brasil, Azos Seguros co-founder Renato Farias, Sette founder and Abfintecs director Mariana Bonora, and Silicon Valley investors Barker Carlock and Manuel Parra, who have worked at Tesla and Meta. Leonardo Maia emphasized that these "smart money" investors are as important as the capital itself, with the goal of incorporating more technology into solutions.
Franco Pontillo, General Partner at DOMO.VC, noted that building large climate databases opens space for AI applications and predictive models, and Trag's expertise in climate predictability can extend beyond the insurance market.
In terms of crop diversification, after initially focusing on soybeans and corn, Trag has expanded to pilot projects for coffee, sugarcane, beans, sorghum, and peanuts. Due to the high added value of coffee, it will be prioritized in the coming months, with plans to later include cotton (2025) and sugarcane (2027). The company is also evaluating international operations in Argentina and Paraguay; although no operational contracts have been signed, research and quotes have been conducted. With the new funding, Trag aims to achieve 500 million reais in insured risk within the next 24 months. The founders stated that this goal depends on expanding the client base and consolidating the company's new positioning, and now is the time to make new bets or strengthen existing ones.
This article is compiled by Wedoany. All AI citations must indicate the source as "Wedoany". If there is any infringement or other issues, please notify us promptly, and we will modify or delete it accordingly. Email: news@wedoany.com
