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ProducePay secures $205M, looks to finance $4 billion in produce annually

ProducePay, a four-year-old alternative financing, data and marketplace company serving the $300 billion fresh-produce market, 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.Copy-of-Pablo B-0016Pablo Borquez Schwarzbeck

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 10 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 $100 million in contracted purchases.

“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.”