Ag fintech in Latin America got a boost recently when US- and Brazil-based Traive, a technology platform that helps farmers access capital, announced its $17 million Series A fundraise. Traive says this is one of the largest-ever fundings closed in Brazil for ag-related fintech.
The round was led by SP Ventures — which also led Traive’s 2020 pre-series A round — and Astella. Tiger Global Management, Bread and Butter Ventures, Minerva VC, Syngenta Group Ventures, Serasa Experian VC, YellowRockets.vc, and CSN Inova Ventures also participated.
Founded in 2018 as a research project out of the Massachusetts Institute of Technology, Traive wants to close the informational gap between farmers trying to access capital and the lenders supplying it. Through the company’s platform, ag supply chain businesses can access financial products and services to provide farmers with working capital loans. In addition to centralizing all the steps of a farmer’s credit journey in one digital location, Traive also uses algorithms and data to offer a layer of real-time risk assessment.
“A lot of our technology is about putting together all the value proposition of the credit journey in one single place,” CEO Fabricio Pezente tells AFN. He adds that one way to provide faster and more precise risk assessment for farmers is to “put in their hands some sort of technology that allows them to communicate with the lenders on the other side.” To that end, potential lenders can receive a credit application, collect documents and data, analyze risk assessment, approve or reject the loan, and even pay it through Traive’s online platform.
Pezente calls this a “B2B2C” model. Traive’s direct clients are the lenders, not the farmers. The reason for this, according to Pezente, is “because lenders already have historical data,” making things like real-time risk assessment easier. Ultimately, giving the lenders faster access to information helps the farmers in their pursuit of capital.
Small- to medium-sized farmers form a major part of the backbone of the Brazilian economy, Pezente says. His company specifically targets those whose needs are too significant to be appropriate for microfinance or small loans, but too small for traditional banks.
“Anything lower than the top of the pyramid is our objective here,” he says of Traive’s potential farmer base. “The ‘smaller farm’ is not by ticket or by land size. This is about capital access.”
The $17 million Series A funding will be used to build out further products and services for the platform. This will include hiring more data scientists, enabling more data collection, and eventually developing a digital wallet. Pezente says Traive is going to become “a digital bank” in the ag fintech space, and is currently waiting on approval from the Brazilian central bank and working through regulatory steps.
The company also plans to branch out from lenders at some point and reach the farmers themselves, he adds. “Part of our product now is to extend [to] the farmer, meaning that the farmer can have access to a product that communicates with the lenders on the other side, giving information about how the crop season is going, taking pictures of the crops.”
In a statement, Francisco Jardim, partner at SP Ventures, said: “In the same way we created some of the best challenger banks, Brazil is constructing the world’s most advanced financial services industry for rural producers – and Traive is leading this new type of business.”
The startup is currently based in the US and Brazil, though its platform largely serves farmers in the latter. Expanding to other markets is a possibility for the future, Pezente says, though bringing the product to the US will be the first order of business. The company’s goal is to do this next year.