Debt Facility Will Allow Fintech Startup to Finance $4 Billion in Produce Annually, Equivalent to the Largest Produce Provider in the U.S.
ProducePay, a four-year old alternative financing, data and marketplace company serving the $300 billion fresh-produce market, today announced that it has secured a $205 million debt facility from Coventure and TCM Capital. The news follows ProducePay’s $14 million 2018 Series B equity funding round, which was led by Anterra Capital.
The global market for fresh produce is a difficult one for farmers and distributors to manage:
- For farmers, especially those in Latin America, securing funds to pay operational expenses is expensive and time-consuming and often exposes them to abusive and exploitational financing terms.
- For farmers and distributors, the fresh produce supply chain has many non-value additive intermediaries who benefit from market opacity, vast geographical distances between farmer and consumer, and the lack of a central mercantile exchange, which is common in non-perishable commodity markets.
- For distributors, it is an incredibly fragmented market, with 140,000 growers in the U.S. alone, making it difficult to identify predictable and high quality growers.
ProducePay, which already works with hundreds of farmers and distributors across 13 countries, addresses these problems by providing:
- Fast and flexible financing for farmers’ pre-season and in-season operations through advance payments when the company pre-purchases product.
- Since its founding in 2015, ProducePay has sold for farmers more than $1.5 billion in produce, and $750 million in 2019 alone.
- ProducePay Insights, business intelligence data that farmers and distributors need to make the right business decisions before, during and after the growing seasons.
- In under one year, ProducePay’s data insights platform has already achieved ten percent market penetration, with a Net Promoter Score of 80.
- A centralized online marketplace where farmers can obtain higher pricing and certain payment from top tier distributors, as well as favorable pricing for critical supplies and services, such as seeds, equipment and logistics.
- Since its launch in October 2019, the marketplace has already seen $100M in contracted purchases.
Company and Investor Comments
“In just four years, ProducePay has had a transformative effect on the financial health and success of scores of farmers and value-additive distributors in Latin America and the U.S.,” said ProducePay Founder and CEO Pablo Borquez Schwarzbeck. “This new debt facility will accelerate ProducePay’s impact, empowering more farmers and distributors to run their businesses more profitably, making high quality and affordable fresh produce available throughout the U.S.”
“Because the fresh produce market is incredibly fragmented, and because traditional financing is costly and time-consuming, it has been difficult for farmers to make the investments required to grow,” said Ali Hamed, Founder at CoVenture. “But ProducePay, which was co-founded by a family member of a leading Mexican produce farmer, has proven that when you combine a deep understanding of the market, a meaningful connection to growers, and significant investment in data and technology, big change is possible.”
“What we’re offering is not a loan, it’s a payment in advance for produce that may not even be harvested yet,” said ProducePay co-founder and CFO Ben Dusastre. “It’s our commitment and investment in that grower.”
ProducePay’s mission is to help farmers feed the world in a sustainable way. We’re working to empower the people that grow, handle, and transport our food by providing them with financial resources, data insights, and technology.
ProducePay’s solutions provide produce growers, distributors, shippers and marketers with new ways to access cash flow and increase sales. Our tools for online trading and insights allow produce buyers and sellers to find new business connections and access real-time pricing and market conditions.
ProducePay investors including Coventure, Anterra Capital, , Rabo Frontier Ventures, Greenhouse Capital, Social Leverage, FJ Labs, Moonshots Capital Tribeca Angels and Arena Ventures.
CoVenture is an investor in early-stage technology companies. CoVenture invests out of a venture capital fund that backs early stage technology startups and manages a special opportunities credit fund that finds novel assets that have never been financed before.
About Thiele Capital Management LLC
Founded by Alex Thiele in 2016, Thiele Capital Management LLC is a Minneapolis-based private-fund advisor that focuses on niche lending strategies by partnering with leading fintechs and non-bank lenders.