ProducePay Provides Financing to Farmers for Fresh Produce
For produce farmers, the toughest row to hoe is securing a loan against their crops. Financial institutions find produce difficult to collateralize because it generally expires a month after harvest.
But one fintech platform is disrupting traditional finance rules in the farm-to-table process and has reaped millions in new funding by doing so.
ProducePay provides immediate access to financing for farmers and distributors in the United States, Mexico, Canada, Honduras, and Chile for fresh produce sold in the United States. Founded in 2015, ProducePay has financed over $850 million of produce in under four years. In 2017, the company financed $400 million of produce, up from $17 million in 2015.
The startup recently raised $14 million in Series B funding, led by the venture capital firm Anterra Capital, with participation from Rabo Frontier Ventures (a Rabobank venture investment fund), CoVenture, Social Leverage, FJ Labs, Greenhouse Capital, Moonshots Capital, and Tribeca Angels.
“Most of the banks are able to lend against hard assets: the tractor, your property. What they can’t and haven’t been able to do is provide financing to the most valuable asset, which is the crop itself,” said Brian Harwitt, vice president at CoVenture. “The technology has enabled the perishable produce to be a financeable asset.”