Natural capital could give Latin American startups a competitive advantage

By Elton Alisson  |  FAPESP Innovative R&D – Latin American science-based startups, known as “deep techs,” should avoid competing in high-cost, highly competitive global fields, such as artificial intelligence, and instead focus on developing unique solutions that leverage regional assets, such as biodiversity and critical minerals.

This recommendation comes from the authors of the report Deep Tech Radar Latam 2026, which was released by the consulting firm Emerge in partnership with Cubo Itaú – the innovation hub of Brazil’s largest private bank – during the third edition of the Deep Tech Summit, held August 10–12 in São Paulo, Brazil, at the Inova USP Complex.

The survey identified 1,746 deep techs across 12 countries in the region: Brazil, Argentina, Chile, Colombia, Mexico, Uruguay, Panama, Peru, Costa Rica, Ecuador, Puerto Rico, and Paraguay. Brazil accounts for 72.7% of this total (1,269 companies), primarily operating in agribusiness and food (427) and health and wellness (407).

According to the authors of the report, the concentration of Brazilian startups in these two sectors suggests that the region is beginning to convert natural advantages into technological capabilities and new knowledge-intensive value chains. However, the region still needs to make further progress in this area.

“We believe that focusing on those regionally-sourced assets can be a key differentiator for Latin American deep techs to gain a competitive advantage over the rest of the world,” said Lucas Delgado, director of Emerge and one of the authors of the report.

For example, in the healthcare sector, the biological diversity and genetic resources of Brazil’s biomes favor the development of new drugs, bio-inputs, functional ingredients, biotechnologies, and precision medicine solutions. The authors note that the scale of tropical agricultural production, combined with the availability of biomass, water resources, and unique environmental conditions, makes Latin America an ideal environment for developing and validating technologies focused on agribusiness, the bioeconomy, and sustainable production.

They assess that the smaller-scale activities of Brazilian startups in sectors such as energy and climate, industry and manufacturing, urban infrastructure, mining, and underground resources also point to the potential for leveraging strategic regional assets, such as the renewable energy mix, critical minerals, abundant freshwater, and forest cover, to develop global solutions.

Unexplored markets

Of the 713 deep techs analyzed, nearly 50% are concentrated in two of the region’s strategic assets: the tropical agroecosystem and biological diversity. Four other assets – renewable energy and biomass, critical minerals and underground resources, freshwater and water systems, and land area and forest cover – remain untapped or lack the necessary conditions to generate a high density of science-based startups in the region.

Although commercial operations involving these four assets already exist in the region, they have not driven the creation of deep techs due to a lack of a local scientific base or initial clients or buyers willing to test validated technologies, according to the authors.

“There are large global companies that work with assets such as critical minerals and underground resources that could test technologies under development, but they’re sourcing them from outside Latin America because the solutions aren’t produced here,” said Delgado.

Combined conditions

In addition to the first customer, who is willing to take on the risk of testing a technology that has not yet been proven on a large scale, another fundamental condition for developing competitive Latin American deep techs based on regional assets is significant productive activity in the region that exposes the local ecosystem to frontier challenges.

Another condition is scientific capacity, supported by the availability of highly qualified human resources, continuous basic research and publication, and the ability to translate scientific theory into practical, intellectual property-protected applications.

Delgado points out that when the scientific foundation, large-scale operations, and the first customer come together simultaneously, startups can drastically reduce their technological and market risks. This makes them capable of raising private capital to scale globally.

“We need research and development centers and companies willing to test technologies generated by deep techs and contribute to their development. And that needs to happen simultaneously,” he emphasized.

Accumulation of scientific capacity

The partnership with leading research centers and science and technology institutions (STIs) in Brazil was fundamental for Nintx, a Brazilian deep tech supported by FAPESP’s Innovative Research in Small Businesses Program (PIPE). This partnership advanced the development of innovative therapies based on modulating the human gut microbiome using bioactive compounds from Brazilian flora (read more at pesquisaparainovacao.fapesp.br/2714).

Nintx established a partnership with the Brazilian Biosciences Laboratory (LNBio), which is part of the Brazilian Center for Research in Energy and Materials (CNPEM) in Campinas. This partnership provided Nintx with access to a bank of extracts from multiple Brazilian biomes, as well as to Sirius, the state-of-the-art synchrotron light particle accelerator. With this access, Nintx was able to identify and map, with atomic precision, how natural molecules bind to therapeutic targets of interest.

To mitigate initial technological risks, the company made extensive use of non-repayable grants. It secured BRL 30 million in incentives from the Brazilian Funding Authority for Studies and Projects (FINEP), which is affiliated with the Ministry of Science, Technology, and Innovation, ongoing funding from PIPE-FAPESP for preclinical phases, and BRL 10 million for projects from the Brazilian Company for Research and Industrial Innovation (EMBRAPII), which financially supports partnerships with STIs without requiring equity participation.

“For a startup, having public support is vital. It’s extremely important for our development,” said Cristiano Guimarães, one of the company’s founders.

According to the executive, this substantial public grant funding was essential in providing the startup with technical robustness and reducing risk for private investors. This enabled the company to secure substantial subsequent equity funding rounds with the Pitanga Redux fund and impact funds, such as Ecoa and Move Investimentos. These funds were attracted by the company’s commitment to biodiversity conservation and sharing its value.

“Drug development requires substantial investment and patience,” emphasized Gabriel Perez, director of the Pitanga Redux fund. “Governments need to actively participate in that initial financing. By using public grants, we’re simply aligning ourselves with what the world’s most advanced markets, such as the United States and Europe, already routinely practice.”

Perez said that Nintx’s proposal to develop new molecules and treatments based on Brazilian biodiversity was one of the decisive factors in their decision to invest in the company.

In July, the Pitanga Redux fund announced a second investment of BRL 18 million in Terra Genomics, a company in the agricultural biotechnology sector. This investment also includes participation from Bold.t Capital and aims to finance the development of a new generation of agricultural biodefensives and biofertilizers based on metabolic engineering and powered by artificial intelligence. “We’re looking for other investment opportunities,” said Perez.