Water Stewardship Critical for Supply Chain Resilience

Q: How did Kilimo transition from selling a SaaS tool to farmers to selling a climate outcome to corporations, and why was this transition necessary?

A: We shifted our business model, but never our purpose. Kilimo was founded to transform the value of water, the most critical resource for life. Because water is underpriced, we are facing highly stressed basins and massive environmental challenges. To address this, our founders in Argentina started with agriculture — the world's largest water consumer — developing technology to improve irrigation efficiency. However, after four years of operations, we realized that while farmers wanted to adopt this technology, they lacked the right financial incentives.

To bridge this gap, we connected with corporations that were investing in water stewardship to protect their own operations from basin stress. We brought these two groups together through payments for ecosystem services. We now compensate farmers for the water efficiencies they generate, aligning corporate sustainability goals with agricultural practices.

Q: What is the current breakdown of Kilimo's business?

A: Our primary clients belong to two main sectors. First, technology companies investing in data centers recognized some time ago the necessity of becoming water-positive in the watersheds where they operate. As organizations striving to remain at the forefront of sustainability, they are among the largest investors in this space. Second, food and beverage companies view water as a fundamental operational asset at the core of their products; they understand that water scarcity in their operating basins directly threatens their revenue. Several corporations in these segments have a long history of investment; for example, Coca-Cola has engaged in water stewardship for 20 years.

While expanding our work with these major clients, we are also looking to unlock a second tier of international companies that recognize their operational vulnerabilities. We achieve this through collective action projects led by an anchor investor, such as Google, Amazon, or Coca-Cola, which allows subsequent participants to join with smaller investment commitments. Additionally, we serve clients in the mining and energy sectors. Although their capital allocation is not as substantial as that of the tech or beverage industries, these companies are increasingly aware of the financial risks associated with water availability.

Q: Kilimo leans heavily on AI and satellite data to measure water use. Why is this approach a competitive advantage when scaling across thousands of hectares of diverse geographies?

A: Our solutions are tailored to the local characteristics of each specific basin. One of these solutions is an AI platform, which combines satellite imagery, climate data, soil metrics, and information from the farmers themselves to generate precise irrigation recommendations. Kilimo developed this technology 11 years ago, but recent advances in AI have accelerated its capabilities, helping us effectively address the challenge of scalability.

We also deploy other high-impact implementations where the most significant water efficiencies are achieved. For example, we transition farmers from traditional flood irrigation to drip irrigation systems. We install the physical infrastructure in the field for a 10-year project duration, ensuring a radical, permanent transformation in how the farmer manages water even after Kilimo's direct involvement ends.

Additionally, we implement interventions tied to regenerative agriculture. When a corporate client approaches us, we evaluate the target watershed and deploy solutions based on its specific ecosystem needs. Because our primary models are highly scalable, we operate in more than seven countries and are on the verge of launching operations in an eighth.

Q: Kilimo seeks to bridge the gap between Big Tech and traditional agriculture. How do you translate Volumetric Water Benefit Accounting (VWBA) metrics used by data centers into a value proposition that a fifth-generation farmer in Mexico can actually trust?

A: Our core strengths are our ability to adapt to our stakeholders and our extensive on-the-ground experience. Having worked with farmers for 11 years, we understand exactly what motivates them. We do not speak to them about "water stewardship" or "water volumes." We speak about productivity. Farmers want to improve their yields and produce more with fewer resources, so we focus on making that happen. We would never ask a farmer to lose money or reduce production just to save water, because we understand their operational needs. Instead, our field agronomy team works closely alongside them to guide them and help increase their productivity.

We also speak the corporate language fluently. We understand that corporate clients are ultimately looking to protect the basin, build climate resilience, and verify impact. We align all these different actors. However, farmers are the heart of these initiatives, and it is vital to support them in achieving their own goals. Forcing them to adopt practices that do not align with their economic objectives would make these projects completely unsustainable.

Q: Mexico faces a critical water-stress inflectoin point in basins like the Lerma and Bravo. When Kilimo entered the Mexican market, what was the biggest cultural or regulatory barrier to convincing farmers to participate in a "water compensation" model?

A: The primary challenge is mistrust. Farmers exhibit a deep skepticism toward government entities, regardless of political affiliation, driven by frequent regulatory shifts that create constant tension. There is a secondary layer of skepticism regarding short-term interventions where an organization offers assistance for a single year and then disappears. The agricultural sector has been frequently let down by external initiatives that arrive with a savior complex, provide a year of support, and leave. It is vital to understand that you cannot rewrite 70 years of deeply ingrained agricultural practices in 12 months.

Kilimo’s initiatives are long-term commitments spanning a minimum of five to 10 years. Throughout this duration, we maintain signed contracts with the farmers based on mutual accountability. They commit to sharing operational data and adhering to specific best practices, while we commit to providing ongoing agronomic guidance and necessary technical training.

This is how we have systematically built trust: by staying present and deeply engaged in their day-to-day operations. We always maintain that technology is merely a vehicle to achieve an end, not an end in itself. Handing a digital tool to a farmer and walking away achieves nothing; the real impact comes from the continuous human support that ensures true operational adoption.

Q: How does Kilimo prioritize which Mexican basins to work in?

A: For us to operate, what we call a "perfect triangle" must align: companies willing to invest, agricultural acreage where we can drive an impact, and a level of water stress within the basin that naturally motivates both farmers and corporations to take action for water security.

With that in mind, we can work practically anywhere in Mexico, particularly from the central region northward. Agriculture spans almost the entire country, and the water crisis is widespread, with practically 70% of the nation's basins facing a deficit.

Mexico also hosts numerous multinational corporations, largely due to its proximity to the United States and the tendency for regional corporate headquarters to be located here. Thus, Mexico is a vital market for us because of the sheer number of highly stressed basins where we can deploy our model.

While we have the capacity to work across the country, we prioritize three specific basins: Bravo-San Juan around Monterrey, Moctezuma around Mexico City, and Lerma around Guadalajara. These are our three primary focuses, though we are already planning interventions in many other regions throughout Mexico.

Q: Beyond saving on electricity and pumping costs, how significant are the compensation payments from Kilimo's corporate partners to a farmer's annual bottom line?

A: On the farmer's side, it is not just a matter of willingness to adopt new technologies. First, we actively provide them with that technology. Second, we guarantee that through water efficiency, they will maintain or increase their yields using fewer resources. Third, we provide them with a payment for ecosystem services. If the farmer meets specific commitments by the end of the agricultural season, we deposit cash directly into their bank account to compensate them for generating these positive environmental externalities. This combination of maintaining productivity while getting paid to implement sustainable practices is what truly drives farmer commitment.

We have seen incredible efficiency gains. The level of technological adoption in Mexican agriculture was historically quite low, so the country heavily required this type of modernization. In some cases, we have seen water efficiency improvements of up to 85%.

We are finding that in Mexico, businesses are not just looking to invest in standalone water stewardship or replenishment projects; they want to optimize their actual supply chains. This is where we are growing significantly. We expect this momentum to continue because the supply chains of many global companies are anchored in Mexico, making the market opportunity absolutely massive.

Q: Offset markets such as the carbon market have been subject to immense volatility and skepticism in recent yeras. How is Kilimo ensuring that volumetric water benefits do not suffer the same price crashes or quality concerns that have plagued carbon?

A: We are highly meticulous with our use of technology and traceability. Everything we record in the field is automatically uploaded to the cloud, cannot be edited, and is delivered directly in a report. We have invested significant capital — following Kilimo's Series A funding round in 2024 — to ensure that our technological platform is robust and fully compliant with international regulations. Consequently, all our projects are fully traceable and automated.

Second, we remain strictly focused on our core strength, which is water. Our clients and the broader ecosystem frequently request additional environmental co-benefits. While we could try to deliver everything requested, measuring nature-based metrics is highly complex. Therefore, we clearly differentiate our primary expertise — generating verified volumetric water benefits — from other co-benefits, for which we often form strategic partnerships instead. We do not want to stretch ourselves too thin; we want to remain the most technical, precise, and rigorous operators in this space. Water is a human right, and we refuse to compromise or expose our clients or ourselves to reputational risk. Ultimately, our strategy relies on two pillars: intense focus and automated traceability.

Q: The rapid rise of AI-driven infrastructure is projected to consume 5 billion cubic meters of water annually by 2027. Given that a single AI data center can use millions of gallons of water daily for cooling, can these facilities ever truly be considered "sustainable?"

A: From our first-hand experience as a supplier to data centers, we see a clear effort and willingness from these companies to support their host communities with meaningful water projects. Working with data center operators across Brazil, Chile, Mexico, and the United States, we observe a genuine commitment to understanding local realities and finding common ground with these populations. The farmers we partner with are direct neighbors to these data centers.

Therefore, this corporate intent is backed by action; they are deploying substantial and highly significant investments. Based on my experience, there is genuine proactivity and a strong community focus centered on becoming water-positive and actively supporting local neighborhoods in these water-stressed regions.

Q: What are your near and long-term goals for expansion within Mexico, and what obstacles will you face in achieving these goals?

A: We are placing a heavy focus on inviting more companies to join our collective action projects. Regardless of whether a company has a medium or small environmental footprint, the objective is for them to participate and recognize that investing in water security is essential to safeguard their own operations.

Furthermore, we are prioritizing the value chains of food and beverage companies. For any organization with supply chains in Mexico interested in strengthening their water resilience, that is where we are directing our strategic focus and where we anticipate substantial growth over at least the next five years.

Q: How do you envision the continued evolution of Kilimo as a company, looking towards 2030 and beyond?

A: First, we will continue scaling our water stewardship product, where we see ongoing opportunities. We are exploring expansion into Asia, driven by existing clients who are requesting projects there. Beyond that, we see high potential to generate significant value by unlocking financing for irrigation equipment for smallholder farmers. We believe this is a critical pain point because corporate value chains are heavily populated by small-scale farmers who lack the capital to modernize their operations and face severe water shortages that limit production. 

On the other side of the equation, large corporate buyers need to build more resilient supply chains. If we fail to secure this financing, corporations will not achieve supply chain resilience, and farmers will not become resilient themselves. Therefore, we are actively developing a solution in this area, which will be a core focus of our future scaling.

Without water, there is no life, no production, and no development. Corporate leaders can be overwhelmed by the sheer volume of metrics and topics emerging around sustainability. However, if they do not prioritize water on their agendas, the development of the country, the viability of their own companies, and their very lives are at risk.